World Cup: German fans watching the Germany-Argentina match along Berlin's 'Fan Mile' on Saturday, July, 03, 2010. Germany play Spain this evening and the winner will play the Netherlands in the final on Sunday.

Global chip sales up 4.5% in May - - 47.6% in year: The Semiconductor Industry Association (SIA) reports that worldwide sales of semiconductors in May were $24.7bn, a sequential increase of 4.5% from April when sales were $23.6bn and a year-on-year increase of 47.6% from May 2009 when sales were $16.7bn. The year-on-year growth rate declined slightly from the 50.4% reported in April. All monthly sales numbers represent a three-month moving average.

“Global sales of semiconductors in May reached a new high and remain on pace to reach the SIA forecast of 28.4% to $290.5b in 2010,” said SIA president George Scalise. “Chip sales have been buoyed by strength in sales of personal computers, cell phones, corporate information technology, industrial applications, and autos. Unit sales of personal computers are now expected to grow by 20% this year and cell phone unit sales are predicted to be up 10 to 12% over 2009 levels.

“Emerging markets, including China and India, are fueling sales of computation and communications products,” Scalise continued. “The automotive market is also slowly recovering after several years of weak sales. Demand from the corporate information technology and industrial sectors that had pushed out replacement cycles during the global economic recession is beginning to come back.”

Aer Lingus:Aer Lingus’ total passenger numbers in June 2010 were 941,000, a decrease of 8.6% compared to June 2009. Short haul passengers were 849,000, a 7.8% decrease on June 2009 and long haul passengers were 92,000, a 15.6% decrease on June 2009.

Aer Lingus’ overall load factor in the month was 82.1%, an increase of 0.8 points compared to June 2009, with capacity decreasing by 12.8%. Short haul load factor was 79.7%, a decrease of 2.3 points on 2009, with capacity decreasing by 5.0%. Long haul load factor was 87.2%, an increase of 7.0 points on 2009, with capacity decreasing by 25.8%.

It is no surprise that growth continues to come from emerging markets, says Stephen Halmarick, head of investment market research, Colonial First State Global Asset Management. He shares his outlook for the global economy, with CNBC's Chloe Cho, Yousef Gamal El-Din and Anna Edwards:

Aer Lingus (BUY, Closing Price €0.83); EU court upholds decision to block merger with Ryanair: Goodbody analyst, Marina Devitt, comments - -- "The European Court of Justice ruled yesterday that the EU Commission’s decision to block Ryanair’s takeover of Aer Lingus on competition grounds. In a separate judgement, the court also refused Aer Lingus’ appeal seeking to force the sale of Ryanair’s shareholding in Aer Lingus. Both parties issued statements following the ruling, with Aer Lingus welcoming the first ruling and expressing disappointment at the second. Ryanair indicated that it was still 'studying the details' of the takeover judgement, but welcomed the ruling against a forced disposal of its 29.8% stake in Aer Lingus. In terms of the ruling on the 2006 offer for Aer Lingus, Ryanair commented that it 'will not prevent Ryanair making a future offer for Aer Lingus, but obviously any such offer will have to take account of the court's detailed ruling.' It went on to state that it had 'no immediate plans to make a third offer for Aer Lingus,' which in its view, would be unlikely to succeed unless the Irish Government were to sell its 25% stake. So we are back to where we started in essence, although we have some clarity on the fact that the ruling would not appear to prevent Ryanair from making another offer for Aer Lingus at some stage in the future.

Aer Lingus also released traffic figures this morning for the month of June. The declines in passengers on long haul have eased a little since declines of over 20% yoy kicked in from September 2009 and continued through until April this year (which saw a drop of 36% as a result of the volcano). However, we note the easing declines in long haul passengers from June – August last year could put pressure on yoy comps in the same months this year. However, the upward momentum on loads on the long haul side is a positive."

French President Nicolas Sarkozy denied allegations that he received illegal donations from France's richest woman Tuesday. Douglas Webber from INSEAD considers the situation:

Irish spreads beginning to tighten: Davy chief economist, Rossa White, comments  -- "It was a torrid month-and-a-half up to the end of the quarter for Irish bonds. But there has been a turnaround in the last week or so. Ten-year spreads over bunds widened by more than 130bps after the initial euphoria over the mammoth euro area bailout package dissipated. Fortunately, cash spreads have tightened by 25bps since June 29th, as sentiment towards the euro area gradually improves — reflected in the strengthening currency. Yet last week's GDP figures (released June 30th) may have provided further impetus for Ireland on a relative basis. The broader numbers will look better for Q2.

It was well reported internationally that Ireland emerged from recession in Q1, based on the international standard GDP. We will not rehash the caveats about the numbers in detail, but it was disappointing that the volume of GNP failed to grow (that will be rectified in the Q2 release), and there was a significant downward revision to the level of nominal GDP and GNP for 2009. Nonetheless, the export sector is starting to purr and it is already being helped by the lagged effect of the euro's depreciation until the last week.

That recent recovery in the euro currency is the other factor which has boosted the price of Irish bonds. The trade-weighted euro has appreciated by 2.4% since last Tuesday, as worries about bank funding rollovers receded with the results announced by the ECB. The surge against the dollar alone is marked, because it coincided with a run of soft US macro numbers. For Ireland of course a balance between the sentiment lift and the pinch to the real economy would be perfect. The one-eighth decline in the value of Ireland's trade-weighted euro since the end of last year is welcome, particularly as the internal (real) devaluation via relative wage and price declines is ongoing. So, it would be good to see the euro strengthen somewhat, if only to help provide a sentiment boost to Irish bonds. But there is a sweet spot for the euro where not too much of the competitive ground regained for the Irish economy would be forfeited."

The European bank stress tests are as much about delivering clear communication as they are the actual results of the test, Julian Callow from Barclays Capital told CNBC Tuesday:

Economic View: Weaker US data food for thought for the Fed; Goodbody economist, Deirdre Ryan, comments - - "Concerns over the growth outlook for the US have resurfaced and are unsurprising in light of the slew of weaker than expected data points of late. Yesterday, it was the turn of the ISM non manufacturing survey, where a reading of 53.8 was the first dip since last November and a four month low. Taken in tandem with its manufacturing counterpart, it suggest that; 1) following the ending of a number of incentives related to the housing and auto sectors, the underlying economic momentum is proving weaker than expected and 2) the moderation that has occurred in the manufacturing sectors is now spreading to services.

While both measures of activity remain above the 50 mark and thus continue to indicate expansion, the pace of growth has certainly eased. In particular the rate of new orders for both surveys registered a sharp drop in June, while the employment balances have also worsened. In particular, the employment balance of the non-manufacturing survey dipped back below 50 in June according to yesterday’s survey. By all accounts activity is entering Q3 on a weaker footing. GDP expanded 2.7% in Q1, with Q2 expectations for growth of close to 3%. With full year consensus forecasts still expecting growth of c.3.5%, the current moderating trends suggest the full year outlook may be erring on the optimistic side. With interest rates remaining at ultra low levels and little scope for further fiscal expansion, the Fed may find itself having to reopen its toolkit of extraordinary measures once again."

US markets

On Tuesday, the Dow rose 57 points or 0.59% to 9.744.

The S&P 500 gained 0.54% and the Nasdaq inched up 0.10%.

Asia

The MSCI Asia Pacific Index fell 0.7% Wednesday.

The Nikkei dipped 0.63%; China's Shanghai Composite has advanced 1.34%; Australia's S&P/ASX 200 Index slid 0.50% and India's Sensex Index slipped 0.60%.

Asia benchmarks

In Europe, the Dow Jones Stoxx 600 is down 0.85% Wednesday.

The ISEQ has slid 3.12% in Dublin.

CRH has tumbled 8.88%- - see link to trading statement in Box above; Aer Lingus is off 3.73%;  AIB has slid 5.85% and BoI has slipped 1.52%.

Goodbody's Robert Eason commented on CRH's trading statement which was issued this morning: "Overall, we view the update as disappointing and the momentum towards the end of the period is not as strong as we envisaged, especially in US Materials, a key pision for CRH now. Indeed, in the outlook, while management expect lfl trends to continue to improve, the “decline is now likely to be somewhat greater than previously anticipated”. Against this difficult backdrop, it is of note that cumulative cost savings have been increased by €60m to over €1.7bn. In summary, it is likely that we will be downgrading our forecasts of 104c."

Tullow Oil announced today that the Government of Uganda has approved the sale by Heritage Oil & Gas Limited of its 50% interest in Blocks 1 and 3A in Uganda to Tullow’s subsidiary, Tullow Uganda Limited, subject to conditions. Separately, Tullow Uganda has also received approval from the Government for its farmdown to CNOOC and Total, subject to certain routine conditions that Tullow intends to discuss with the Government in due course.

European Benchmarks

Irish Financials: NAMA revised business plan suggests no change to haircuts; Goodbody's Ken Darmody comments  - -"In a revised business plan, published yesterday, NAMA used a haircut of 50% for projections going forward, which is the same average haircut as tranche 1. While a lot of the commentary around the business plan will focus on the change since October’s plan it is more important to focus on any changes since tranche 1. Comments within the plan make reference to 'the advance preparations made for the imminent acquisition of €13bn of loans in tranche 2.' This suggests that we should not expect material differences in the next haircut due soon. Elsewhere the report covers three potential outcomes for NAMA, one of which is a loss of €800m. It is early days for the agency and the final outcome will take many years to be known, however, comments from the Minister of Finance reminded the financial institutions that they will be on the hook for any shortfall. The first tranche haircut for AIB and BOI was 42% and 35% respectively with higher haircuts at Anglo and Irish Nationwide pushing the average to 50%."