Аny hopes that we might have been hitting a low at the end of last week are likely to be tested in the early sessions this week.

The Far East has taken the weekend news particularly badly with the Nikkei falling almost 500 points, the Hang Seng 8.5 pct down and the Currencies lurching both East and West once again.

For those who like to claim that the UK is only suffering because of the Global Economy there is the uncomfortable fact that the pound is the pariah of the major currencies. The FTSE might have ‘only’ dropped 45 pct from the highs when other appear to have done worse but into this calculation must be added the fact that the pound has fallen hugely as well. On a global book any holding in sterling would have to add anything from 15 to 45 (vs the yen) pct to this number depending on your local currency.

Values for UK plc in USD terms are disastrous and do not reflect well on our ability to ‘grow’ out of the current malaise. Any impact from a Public Spending splurge to try to get the economy moving will be heavily discounted. Spending now by Gordon ‘Safehands’ Brown and Captain Darling will run the risk of just throwing huge sums of goodish money after bad. For all of the pain it might be advisable to cut rates to the bone first, wait a year for the unwinding to play out and then come in with a fiscal stimulus Even I can sympathise with politicians having to make such a difficult decision though. With every section of society screaming for help it takes real strength to ignore immediate unpopularity in return for longer term gain. Maggie managed it in the early Eighties but she had been put in on a platform of ‘Jam Tomorrow’, this administration has made its policy one of not just ‘Jam Today’ but ‘Cream Cake from the future’ as well.

The FTSE is being called down at 3720 which is around the low point of Friday, giving up some 160 points on the pre weekend close. Listening to commentators over the last few days there is some consensus from “the markets always right” section that the falls will continue until such time as the various Governments stop trying to bolster things. Creating artificial support in fundamentally fractured valuations will only prolong the pain. Better to get it all out of the way and then build from there. The problem with this rather simplistic view is that in the chaos major industries can go to the wall merely to prove a point when saving them now would be less costly than rebuilding them in a few years time. The trick is to identify which is worth saving and which is not. At the moment we still seem to be in a state of denial about the future with spending still quite robust on the high street in absolute terms.

This week sees a few corporates coming up to the plate but it is a moot point as to whether anyone will really be listening!

Tuesday will see Carpetright giving a trading update and in all honesty it is difficult to see how the company can be prospering in the current environment. Home sales (a common trigger to buy carpets) are in freefall and when times are tough it is easy to see households making do for another year. The stock is well off the highs and is trading down at around 460p, hopes for a buyout are probably the only thing holding it up but it has to be said that funding would probably be pretty tough to come by for such an adventure.

Arriva will also be popping up for a statement and the company is expected to follow recent results from competitors with an upbeat number. Train income is, by most standards, reasonably solid and with fuel cost falling by the minute forward revenue must be looking ever more rosy.

Aviva will presumably be attempting to soothe investors’ worried nerves after the stock has plummeted since the end of September. Insurance woes are creeping ever higher as more dodgy bond cover (of whatever type) and falling portfolio values creeps out of the woodwork. The stock has more than halved in just four weeks and the fear of comparison to the demise of various banks is now high on the radar. It is difficult to see what the board can say as anything other than outright denial of problems may create a further downward spiral of redemptions.

Wednesday

Cairn Energy will be reporting an update and the company will be informing us as to the implications of oil at the current levels. Expensively sourced finds across the planet will now have to be revalued for cost effectiveness. With pressure on economies across the globe hard won contract rights might not be as ‘stable’ as would be desired. The temptation for mineral ‘nationalisation’ in many nations will be a very enticing policy prospect.

At 09.30 we will get the Mortgage Lending numbers which are unlikely to make anything other than horrendous reading. Building stocks are likely to react to any perceived weakness or potential strength.

Thursday

Astra Zeneca (a rare gleam of light in the desert of the FTSE 100 this year) will hopefully be able to report solid Q3 numbers. The Pharma sector is almost ‘Utility like’ these days as Governments across the globe would rather beggar themselves than be forced to cut back on health expenditure. The UK is a good example where the NHS has become a ‘Holy Cow’ of a drain on resources but with no Political Party willing to grasp the nettle of inefficiencies and cost inflation.

WPP (a business for whom economic growth is truly paramount) should be suffering in the current state of the economy so it will come as no surprise if they tell us so. Fortunately much of their revenue is dollar based and the company is able to more easily cut its cloth to suit its pocket than many sectors. With the stock now some 60pc off the highs some value buyers have been sniffing but for many it might be to soon to be calling a turn.

Shell will be putting its head above the parapet and, no doubt, it will be shot off. Gordon Brown’s bleating about the profits made by the Oil companies and trying to force them to cut margins might make for better reading if we did not all know that more than 80 pct of the actual cost of petrol just goes straight into the government coffers and this for doing absolutely nothing at all. If he really wants the price at the pumps to fall he should reduce the obscene level of tax rake before blaming someone else. Still, the board will know that they are on a hiding to nothing this week to they will probably just grin an bear it.

Nationwides monthly house price survey will be out as well and (by the reductions I am seeing at the moment) the number might be quite bad.

Friday

BskyB continue into the doldrums as even the British public’s love affair with the TV seems to be coming under pressure. Pubs seem to have also started to rebel against the ridiculous charges being levied and it must be getting harder to justify the cost by the day. Sentanta must also be cutting into revenue as any choice must reduce overall take.

Blacks Leisure will be updating on the high street and the news is unlikely to be anything other than grim. If the retail sector is suffering this much already when the tough times have not really even started we must fear for what the landscape will look like in a years time.

* Simon Denham is COO of London Capital Group. The article was originally published on Tradefair, which does not endorse the information and analysis available in this comment and it is provided purely for information purposes only and is delivered as a personal view by the writer. Under no circumstances is the information in this comment to be used or considered as an offer to sell, or a solicitation of any offer to buy.