2 May 2017 | Issue 14
Market corner

by Ghillie Little
Head of Corporate Consulting
Nasdaq surging to record highs
The Nasdaq hit record highs this past week, credited to a robust US earnings season that saw strong corporate earnings outweigh concerns over weak economic data. The S&P 500 technology index continues to outperform with big tech names leading the charge. Investors brace for another week of quarterly corporate results starting with Apple at close of business in NY today, then Facebook on Wednesday, followed by the release of the Federal Reserve policy statement, which is expected to provide clues on the future path of rate hikes in the US.

Cautiously optimistic
According to the latest PMI survey, which tracks the activity in the private sector of the economy, UK manufacturing has grown at its fastest rate for three years in March. This coincides with Friday's less-than-encouraging GDP figures that showed consumer-facing services taking a hit from the fall in the value of the pound. Although GDP growth is an important measure on how the economy is doing, it's worth noting that the private sectors of the economy show higher activity than anticipated and relatively strong expectations for the coming months.
Too much baggage
High-end US handbag and accessories company, Kate Spade & Company plunged 25.1% in April. The company has been exploring a sale, under pressure from an activist stakeholder.  As the company explores strategic options, its future remains uncertain.  The announcement of disappointing first quarter 2017 results further reduced the chances of the company getting an attractive deal from potential buyers. The road continues to look a bit rocky for Kate Spade.

A bonding strategy
The American streaming company Netflix, issued a new bond last week and raised over 1 billion euros. The money is to be used to cover the company’s upfront costs for the original content it produces. The idea being that it will make back more than its investment once the content is produced. The strategy seems to be shareholder approved with Netflix’s stock at an all-time high, even after some of its unreleased original content was leaked by hackers.

Heroes of the week

Strangers rescue in Texas
...good samaritans work together to save two trapped babies from overturned SUV.
View from Italy

by Catalina Chiavari Pazos

Happy Birthday Alitalia
Triste vedere una compagnia che compirà 70 anni il 5 maggio finire nel nulla. L'Alitalia, il miglior esempio del Caos all'Italiana (no, non è un piatto di alta ristorazione), sta per finire dalla padella alla brace; ovvero all'Amministrazione Straordinaria grazie ai dipendenti che hanno votato no al referendum per la ristrutturazione.

F*ck up of the week

Driver looks into fuel tank using a lighter - you'll never guess what happened next can't make this up.


by Ghillie Little
Head of Corporate Consulting
Float like a butterfly, sting like a bee
The gloves are off - Brussels makes a play for a share of the City of London’s euro-clearing market. The European Commission is preparing legislation to impose control on London’s euro-clearing market that would severely impact London’s role in the estimated €850bn a day business. The legislation is expected to increase European supervision, including access to data to monitor risk.

UK chancellor, Phillip Hammond, warned that such a move would be at a huge cost to the European economy, but this doesn’t seem to be convincing any EU officials who see moving operations to the EU as the option. Such a bold move doesn’t bode well for what is already a very complicated relationship.

Europe is in danger of cutting off its nose to spite its face. Here's hoping common sense will prevail.

SWIFT-ly avoiding obscurity
The inter-bank payment messaging system, SWIFT, owned by roughly 11,000 member banks, has finally decided to take a step towards embracing blockchain technology. Teaming up with several large banks to trial a "proof of concept", the payment system has seen minimal updates to its technology since the 1970s, when the message system was launched.

As an integral piece of the world's financial plumbing, it's a smart new move by SWIFT to look towards the future; those familiar with the topic previously noted SWIFT's until now dismissive attitude to blockchain, and refusal to even acknowledge that it could be a threat if successfully deployed by future competitors. If you can't beat them, join them.

Who's having a good week?

Anthony Joshua and Wladimir Klitschko

...a mesmeric fight by two world-class athletes

Corridors of power

by Louis Rynsard
Director, Reputation & Strategy
Golden Oldies
To paraphrase a famous saying, there is nothing as ‘ex’ than an ‘ex’ politician. In recent days, both former PM Tony Blair and former President Barack Obama have discovered this. Both have recently dipped their toes back into the political arena. And it’s going just great. Only yesterday, a senior Pro-EU Labour MP told the Sun that Blair should stand for election or “shut the f*ck up.” Over the pond, former Obama-bestie Elizabeth Warren called him out on “giant blind spots”.
So, after both achieving so much, why go through all this again? Well here’s one man’s opinion - they surveyed the state of politics, hoped for someone else to pick up the gauntlet and found everyone wanting. In Britain, the liberal centre is without a voice, faced with the choice of hard Brexit with May or lunacy with Corbyn. In America, the Democratic Party is still on its back after November. I do not think that either man wanted to spend their time “getting their hands dirty” again, but it looks to them like no one else would. Criticise them for coming back if you want, but first look at the state of centrist politicians today and it’s clear why they might think they must. Might be time to jump back into the pool fully boys.

Brussels gossip was not meant for our ears...or was it?
How very typically British to make it all about us! Over the long weekend, details of May’s dinner with Juncker leaked out. The dinner did not, er, go well.

Queue Leavers spinning the line of the UK alone against those evil Europeans, Remain supporters crowing ‘told you so’ and Downing Street going into full denial mode.
Except this leak wasn’t for us. This appeared in a German paper, was not online in English and was not briefed to UK media. This was all about the EU reaching Germany. Expect to see a lot more of this. By all reports, the Brussels machine is expecting Brexit to go wrong and they are preparing already for the full blame to be the UK’s. Our advice to HMG, get in the game.
And oh, as a side note, for once the EU is playing a communications blinder – get information out first, on your terms and you control the story. Be second and you are controlled by it.
Guess who's back, back again, Matteo's back, tell a friend!
In our very special Valentines SPIT I said it was all over between Matteo Renzi and I. Well, some people just do not take no for an answer. With a stunning 70% of the vote he has returned as Leader of the Italian Democratic Party. Bit keen Matteo, I get it you miss me! Too soon to say whether he will re-win my affections (and more importantly those of the Italian electorate) but if anyone can pull that off, it’s Renzi - so watch this space.

Notable headline

Ex-husband locked wife in bedroom so he could eat dinner in peace

...not the result he was anticipating.
Silicon passage

by Louis Rynsard
Director, Reputation & Strategy
Jack and the giant exaggeration
My name is Jack, CEO of CEOs, look on my works ye mighty and despair! – Jack Dorsey, CEO Twitter.

Ok, he didn’t quite say that but Jack did claim at New Fronts that Twitter will last at least 10,000 years (yes ten thousands years)! Quite a bold claim from a guy whose company struggles to turn a profit. But with 16 new streaming partnerships, does Jack have a point? Well no obviously, nothing lasts that long. But bringing content from major media and entertainment organisations including BuzzFeed, Viacom and Bloomberg as well as the WNBA, MLB and the PGA onto their platform is a smart move. Twitter has suffered of late by its inability (unlike fellow tech companies Google and Facebook) to monetise its offer. If it can pull off a transition where people come to its site not just to share hot takes and memes but to actually watch things, the ad money may start to roll and the profits begin…. Or it will kick off a bidding war with the other internet titans. Either way, fun for us. Someone get the popcorn.
Driverless cars hotting up
Apple, Alphabet-backed Waymo, Uber, Tesla, Ford, Mercedes and now Samsung.

Driverless cars really are shaping up to be one of the most crowded and most exciting tech spaces. With the majority of the major tech giants now on the field and the traditional car companies all developing automated vehicles, it is not a matter of if we see driverless cars bought to market, but when and who first? The race is on (pun intended and cringe-worthy).

Another question is what impact driverless cars will have on the economy, society and our lives. Difficult one that. If only there was a Department of Technology to work out the answer. Agree? – click here to sign our open letter.
Education, education, education
In a move totally not timed to steal some of Google’s thunder from last week, Microsoft has today unveiled a new edition of Windows, created specially for schools at their "Learn What’s Next” (see what you did there guys) event today in New York. Looking to claw back market share from Google, Microsoft’s new version of Windows 10 will run on cheap PCs, have better battery life, and enhanced virus protection (though why all of their offer doesn’t, is anyone’s guess). All looks like they are taking on Chromebook directly.
Pink Floyd may not have needed no education, but with US education institutions spending $6.6 billion a year on tech, Google and Microsoft do.

Who's having a rough week?

Fyre Festival faces $100m 'Lord of the Flies' lawsuit

...a bit of planning goes a long way.

C-suite steer

by Lief Anya Schneider
The most dangerous man or woman in the room comes with a smile
This week the leader of the free world stepped right in it again - appearing to demonstrate a belief that Andrew Jackson’s ghost may have had some strong opinions on how to avert the American Civil War. Or some-such. 
And we are seeing the bit-part return, to the joy of a braying, bloodthirsty crowd, of Fred Goodwin, who is to be a defendant in a blockbuster £700m High Court lawsuit brought by 27,000 retail investors and institutions. 
What do the two chaps have in common? A fair amount. Thing one, I daresay, is a penchant for sycophants, and a willingness to believe their honeyed lies. Because the question that lies over both of them, and hundreds of others of their ilk (as in, the media guns for them and they gain abject rejection from a big chunk of stakeholders) is “Didn’t they ever run anything by other people?” Answer: yes they did and do. The bigger question is: who did and do they carry out this exercise with? 
Machiavelli observed that there “is no other way of guarding oneself from flatterers except by letting men understand that you will not be offended if they tell you the truth.” Well, yes, Mr M. That’s true. But first you have to understand that there’s a need for such a thing. Robbie Burns hinted at human nature’s abhorrence for truthful critique when he said: “O wad some Power the giftie gie us. To see oursels as ithers see us!”
Well, who really wants that? I’d say we want it sometimes, and at others, not at all. Especially if how others are currently seeing us is not very nice. But the truth is, really great leaders, the ones that leave solid legacies behind, do take advice and do allow objective input – however unpleasant that exercise may be. And leaders who think they’re just great all the time (we shall call them Fred, Don, Dick and Phil – hope you can work the last two out), but ultimately miss the mark, are the ones who start off good then drink their own kool aid. And get other people to feed it back to them.
Trump’s factual errors of historical reference and so on are easily avoidable if he would use a comms advisor properly. One he allowed to give him feedback and brief him properly and who had the proverbial balls to stand up to him occasionally. External comms advisors are in the perfect position to point things out that others can’t. It is far better to rehearse with a discreet comms advisor, make a d**k of yourself, be told that you’re coming across a bit d**kish and then put things right before you step onto the global stage, than to play it all out the other way round. Wise leaders know this.
Those prone to receiving flattery (and have a bunch of yes-men as external alter-egos to their own egos) have largely themselves to blame. Because not all yes-men are such because they are natural flatterers. In fact, most are completely decent, intelligent people who simply would rather feed their families than lock horns and lose to a huge ego. But not all leaders are to blame for listening to yessers. They may not be aware that their “advisor” is not entirely telling the truth. Some flatterers are very good at it. They’ve been practicing a while – ever since they told the school bully he was spot-free and all the girls loved him. (It was that or be thrown out of the gang. Forever.)
Even Henry VIII had someone who was allowed to criticise him without fear of the usual scaffold. Will Somers, his trusty and highly intelligent Court Jester. If you don’t have a Will Somers, you’re ultimately doomed.

Poem of the week

Ozymandias by Percy Bysshe Shelley

Picked by Louis Rynsard

SBC London Reputation & Communications

Our experienced advisers offer face-to-face strategic corporate reputation advice, and public relations service delivery, tailored to meet your firm’s specific circumstances.

Based in the City of London, SBC London serves CEOs and other business leaders to develop better strategies for reputation. Please contact me today to set up a meeting:

The SPIT is produced weekly by SBC London.
SBC London is a corporate reputation and communications advisory firm based in the City of London. 
Call us today. We look forward to meeting you.

SBC London
80 Coleman Street London EC2R 5BJ
+44 (0)207 104 2214 |

the SPIT © 2017 SBC London, All rights reserved.
Subscribe here
Our mailing address is:
SBC London
217 Chester House
Fulham Green
London, SW6 3JA
United Kingdom

Add us to your address book

Want to change how you receive these emails?
You can update your preferences or unsubscribe from this list