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Friday, 12th April 2024
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Predicting the economy Back  
We caught up with Colin Hunt, head of research at Goodbody Stockbrokers, just before the UK elections to follow his day from writing economic briefings, keeping abreast of the global market moves and dealing with a mound of paper.
6.15am: Here we go again. The weekday battle to beat the traffic starts with a long shower, a cup of coffee, 5 minutes of Sky News and a quick flick of the finance pages on the Teletext. The drive to work at this ungodly hour takes about 15 minutes. An hour later and I would spend about 70 minutes sitting in traffic. There are some, albeit limited compensations for the early start to the day.

7.00am: I reach the office and scan an eclectic mix of newspapers including the Financial Times for international business stories, the Irish Times for domestic as well as economic news and the Guardian for British political gossip. 10 minutes at the Bloomberg and a quick chat with the International Bonds team completes the morning ritual.

7.45am: The institutional research and sales morning meeting kicks off with the latest economic news and views of my colleague Don Walshe. Fundamental disagreements within the economics team, though rare, tend to come to the surface at this point. A brief discussion ensues on the dire near-term prospects for the beleaguered euro. Then it’s on to pure equities with the 14 strong team of analysts reporting breaking news, outlining changes of views and generally keeping everyone abreast of both company-specific and industry developments. This morning, Liam Igoe, our food sector analyst, is waxing lyrical about Greencore’s interims and the medium-term upside potential offered by Hazlewood Foods. After doing a global round-trip in 15 minutes, we troop out. I sit down to edit the meeting’s discussion and send our Morning Call out to clients.

8.30am: After a quick cup of coffee and a few slices of brown bread, it’s off to our Private Client Department where we have a distilled version of the morning meeting with the retail broking team. Spirits seem high this morning with equity markets adopting something of a firmer tone after the panic of March and April. The ISEQ has hit a fresh high and seems to be eyeing 6,400 which is 100 points above our year-end target level. Where to next? Liam Igoe and I have a quick meeting to discuss the outlook for the ISEQ and conclude that a period of consolidation lies ahead. After the volatility of recent months, the coming weeks shouldn’t offer any drama be it of a positive or negative nature. We’ll keep the year-end target at 6,300 for the moment but an end-Summer upwards revision is looking increasingly likely. I head out to the bond and equity desks for a brief take on the market’s opening form.

9.00am: The frenetic pace of morning meetings gives way to some quiet research time. We are scheduled to release our Summer Economic Quarterly in the next few days but it is someway short of completion. We haven’t had any reason to revisit our forecasts for Ireland since the outbreak of foot and mouth disease and it is shaping up to be a ‘steady as she goes’ piece. I take the time to run some scenarios through our Exchequer model and come up with some disturbing results. While Ireland is still going to return a comfortable surplus, a combination of higher expenditure and slight revenue disappointment should leave the government ?800 million short of its budget target at the end of the year. Looking further ahead, it’s clear that the government, contrary to popular opinion, does not have limitless resources at its disposal. A continuation of current expenditure growth patterns would be likely to turn surplus into deficit within 3 years.

11am: Irish trade data are released to the world via the wonders of the internet and contain some pleasant surprises with the value of exports increasing by 27 per cent in the first quarter of the year. This evidence runs counter to the view that export growth would dim because of the global economic slowdown. It appears that the competitiveness and profitability of the Irish economy at a time of global margin pressures are encouraging companies to make maximum use of Ireland’s low-tax export base.
Interestingly, two of the world’s economic trouble spots, Germany and the US, are reporting increases of some 60 per cent in demand for Irish exports with the most pronounced buoyancy being enjoyed by organic chemicals and electrical machinery.

11.30am: A chance presents itself to catch up with a few Dublin clients, chew the cud about the economy and discuss near-term prospects for the market. The export numbers are good enough to prompt an upward revision to our growth forecasts for 2001 of about 1 per cent. While the domestic demand outlook is unchanged, the buoyancy of exports should be mildly positive for confidence levels and should somewhat reduce concerns about the outlook for employment levels in multinational Ireland.

12.30pm: In-house results presentation to clients and staff by John Nagle, ceo of what used to be known as ITG but now goes under the name Alphyra. After an enthusiastic and well-received presentation, we settle into an excellent buffet lunch. I find this type of session to be particularly worthwhile with the informality of the occasion lending itself to open and frank exchanges of views between investors and company management.

2.00pm: Back to the Irish Economic Quarterly and a rewrite of the forecasts section. The document is beginning to take final shape now and looks likely to hit the presses tomorrow morning. Doubtless, the desk-top publishing team will uncover an array of faults with the lay-out of my graphs and there is bound to be lots of little typing errors which a keen proofing eye should highlight. The final draft is read again and gets the nod. Now that I’ve knocked one large item off my to do list, it’s time to see how the rest of the analysts are getting on.

3.00pm: Review the upcoming research schedule with some of the analysts ahead of next week’s planning meeting. We have a pretty ambitious publication schedule with interims, full service company reports and some thematic pieces vying for attention and resources. Trying to stick to a strict timetable for publications in a dynamic marketplace is not as easy as it may seem. A provisional schedule is agreed and should keep us very busy over the coming months.

5.00pm: Chat to a few London contacts about the conduct of the general election campaign and the likely size of the Labour majority. Minds are beginning to turn to the prospects for British membership of the euro. Having put the pound at the centre of his electoral campaign, William Hague is handing Prime Minister Blair the perfect opportunity to go for an early referendum. If the Tories lose badly, as seems likely, the temptation to consult the electorate within the next 18 months should increase dramatically.

5.30pm: Worst part of the job - administration work. Setting aside a few minutes each day is the optimal way to approach this unpleasant task. Despite the best of intentions, it tends to accumulate over a few days on my desk. When the pile begins to invade my workspace, it’s time to do something about it. Roll on the paperless office.

6.30pm: Retire to Mary Macs for a debriefing session on the day’s events with some of my equity department colleagues. Spending an hour discussing the outlook for the market, catching up on industry gossip and listening to an over-hyping of Leeds’ prospects for the Premiership next year tends, given the individuals involved, to be a highly entertaining way to end your working day.

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