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Lists are fun. In this business, the most common lists are performance tables. There may be other sorts of tables but with performance you can see how much money you might have made if your predictive qualities were well honed.

Looking at the performance leagues for European shares over the year to the end of June, I had to confess I would have been hard pushed to pick the winners this time last year.

In the UK, it was Powergen which delivered the best return, doubling investors&#39 money, while Next, Royal Bank of Scotland and Safeway were the other UK top 10 members. The best-performing share was a Portuguese cement company, which says a great deal for where the winners have been since technology bombed. It is encouraging to see that the UK is the only country with more than one entry in the top 10.

Look at the five-year picture and it is very different. Despite all the upsets of the past year, Nokia is comfortably the bestperforming share, multiplying investors&#39 money 16 times. Remarkably, three of the top five performers are Italian companies. The UK scrapes in at number seven with fund manager Amvescap while Vodafone succeeds in just making the top 10, which makes you realise how well the shares performed ahead of the Mannesman acquisition.

Last week was largely devoid of major company news. The Microsoft court decision livened things up at the end of the week while the Fed&#39s decision to change gear and reduce interest rates by only 25 basis points caused a few raised eyebrows. In the case of Microsoft, Bill Gates&#39 decision to tough it out and not reach an accommodation with President Clinton now seems to have been vindicated although it is by no means all good news for the software giant. However, the possibility of a break-up of the company has receded into the far distance. The Nasdaq index took heart at the announcement and there were certainly those who felt this to be something of a turning point for the technology sector.

I remain more sceptical. For a start, what is good for Microsoft is not necessarily good for other technology companies. Moreover, while turning points often come as a consequence of significant corporate news, my experience suggests that it is the unexpected bad event which normally turns a falling market around. Even so, Microsoft must be mightily pleased with the result. Of course, much will depend upon the outcome of any negotiations held with the Bush administration but there are signs that the new president will be rather more business-friendly than his predecessor. Gates remains the world&#39s richest man. His wealth is hardly likely to be damaged by this victory.

It will be damaged, of course, if the US economy continues to falter. There is no doubt that opinion is divided on whether the Fed should be cutting rates more aggressively or leaving them where they are. The signs are mixed. Jobless figures last week were better than expected and house prices are holding up well. The manufacturing industry, on the other hand, is having a tough time and the overcapacity built up during the boom years is still a long way from being removed. There are those who are fearful that inflation will start to resurge, bringing rate-cutting to an end.

Popular wisdom has it that interest rate cuts take six to nine months to percolate through to the economy. If this is true, this quarter could be seeing some of the benefits of action taken at the start of the year. Meanwhile, the second-quarter reporting season is unlikely to deliver surprises on the upside. The lists of these companies are likely to be developed around which disappoints most. Still, summer seems to have arrived, so perhaps taking a holiday is the best advice.

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