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Daily View - 15th April...

The doom-mongers were out in force yesterday with Goldman Sachs and Wells Fargo to the fore using unusually strong language in describing investor expectations for the remainder of 2008. 'Delusional' is not typically the kind of language that an analyst will employ to describe what is after all, his customer base, but it is easy to see how this could be deemed to be necessary if your prognosis is as bearish as theirs appear to be. There is no doubt that there is a sense of trying to see the uplands at the end of the current weakness but at the moment, when the 'R' word has hardly even pushed its way into our consciousness, this does seem rather premature and investors do appear to be very sanguine as to any potential adverse valuations in their portfolios, especially in the US.

In the UK, with just about every indicator you care to mention moving into the red warning zone, the equity markets look to be defying gravity.

Tesco's bottom line numbers announced this morning were better than expected and this will bolster investor hopes for the new business in the States. 'Fresh and Easy' has been curtailed for the time being but Tesco are big enough to plan long-term for such an enterprise and the temporary slow-down in the US makes it prudent to put expansion on hold for the time being.

The FTSE is opening around 50 points up on...well, nothing very much - just the normal mining and oil rallies! The Far East managed to stop yesterday's rot, but the Hang Seng and Nikkei did not exactly roar away this morning with both indices recording small gains.

On the currency front the Pound is suffering badly with the crosses falling against all the majors (even the Dollar). We are now at yet another all time low vs the Euro (I should know as I have just returned from Spain and the prices are eye-watering). The chart is frankly appalling and whilst I am not exactly a sterling bull, this level of devaluation appears well overdone.

For many nations within the Euro bloc the high levels of their currency will be spelling DOOM in very big letters. The ECB will almost certainly come under very strong pressure to cut rates and now that Berlusconi has been re-elected the doves may gain a very powerful (if at time incoherent) ally.