Morning business news - August 6Wednesday 06 August 2014 10.47
Historically stock markets tend not to be blithely indifferent to geopolitical tension. The Dow and the S&P 500 both fell late in the trading day yesterday on Wall Street and Asia followed suit this morning apparently in response to a warning from Poland's foreign minister about a build-up of Russian troops along the Ukrainian border.
But Paul Sommerville, founder of Sommerville Advisory Markets, says he does not believe that investors are paying much attention to geopolitical risks, adding that if they were oil prices would be rising instead of falling. Mr Sommerville says that the policies of central banks, including the US Federal Reserve, are currently driving the direction on world markets. Describing what is happening on the markets as a "giant game of pass the parcel", the analyst says that big traders are petrified that central banks will turn off their economic support of recent months. As the world's big economies report better than expected economic figures, he says that central banks will start to cut back on their stimulus programmes. On the euro, Mr Sommerville says that the weakening currency is good news for Ireland and Irish exporters. He says he believes the ECB will do more to further weaken the euro in the coming weeks.
MORNING BRIEFS - Good weather, which has boosted tourism, helped the Irish services sector to a 24th consecutive month of growth during July. The expansion in activity across the tourism and leisure, business services and financial services sectors was marginally below the record level in June according to the Investec services PMI - a monthly measure of conditions in those industries. There was a sharp increase in staffing levels during the month, according to the sample of 450 businesses surveyed for the PMI report.
*** Technology companies Apple and Samsung have agreed to stop suing each other, at least outside the US. The two companies have called a truce and will drop a series of lawsuits across a number of jurisdictions through which each company has been accusing the other of copying its designs. The two will continue to litigate in the US where Apple was recently awarded $120m in damages Samsung, though that was reduced from an original amount of almost $2 billion.
*** Disney made a quarterly net profit of $2.25 billion for the three months to the end of June. Hit films such as Captain America: Winter Soldier and Malificent helped the entertainment company beat analysts' forecasts. Disney owns television stations including sports network ESPN - which benefited from a surge in World Cup audience and related advertising. It also has its theme park business but the film division proved its star performer during the recent quarter. It doubled operating profit compared to the same quarter last year.
*** UPC had 6,700 fewer Irish customers at the end of June than it did at the end of the previous quarter in March. Figures published by the cable television, broadband and telecoms company show it added 4,000 internet subscribers and 11,000 telephone customers during the second quarter. But it lost almost 8,000 television subscribers. UPC now has just under 524,000 "customer relationships", down from 535,700 in June of last year. It plans to boost those figures when it enters the mobile market in 2015.