TODAY’S FAYRE – Monday 10th March 2014
“The fountains mingle with the river,
And the rivers with the ocean;
The winds of heaven mix forever,
With a sweet emotion;
Nothing in the world is single;
All things by a law divine
In one another’s being mingle;–
Why not I with thine?
See the mountains kiss high heaven,
And the waves clasp one another;
No sister flower would be forgiven,
If it disdain’d its brother;
And the sunlight clasps the earth,
And the moonbeams kiss the sea;–
What are all these kissings worth,
If thou kiss not me?”
Percy Bysshe Shelley – poet –1792-1822
What a glorious day in the history of England’s rugby Sunday proved to be! It all went to plan putting the Welsh dragon to the sword! The England team played brilliantly, masterminded by Stuart Lancaster and it deserves all the accolades thrown at it. “God cry Harry for England and St George!
So much for Abenomics! The Japanese current deficit for February was truly awful, with exports up 16%, BUT imports up a disproportionate level at 30%. In the same breath China posted a trade deficit for February with exports down 18%. The situation may have been exacerbated by Chinese New Year data or lack of it? Maybe this distortion should be given the benefit of the doubt, as the Chinese authorities have been known to be economical with the truth in presenting data, when it suits.
Then of course the bellicose rhetoric towards Russia is now rather high octane with the EU determined to increase sanctions against the ‘Hugging Bear’ starting with visa restrictions. So all in all markets have quite a toxic cocktail to disseminate in the next few weeks. Even the sweet-talking Chancellor Merkel’s overtures towards Putin seem to have fallen on deaf ears. In Asia Japan’s and China’s news sent markets in to reverse with the ASX losing 0.9%. The Shanghai Composite was down 2%, the Hang Seng was easier by 1.7% towards lunchtime and the NIKKEI by 1% as it headed towards the close. The fact that US non-Farm payrolls created 175k jobs in February cut little ice with investors, though the unemployment rate rose a tick to 6.7%.
In Europe this week there will be further deliberations on bank stability and who decides when the party is over for those that don’t comply. Forgive me for being cynical, but one suspects issues will be fudged, regardless of IMF intervention. Greek banks looks as though they could get way with daylight robbery in terms of compliance and capital requirements. Many though these banks would need another E10 billion capital injection
Talking of banks the fact that there is some competition waiting in the wings here in Old Blighty, desperate to cut in to the big fours’ vice like grip of consumer banking – Metro Bank, Paragon, Aldermore, OneSaving and Shawbrook being amongst supposedly 22 banks looking for licenses, I doubt they will do much damage to Lloyds, RBS, Barclays and HSBC. Though Dr Cable will be salivating at the prospect of more competition, I fear that only Williams & Glyns, TSB and maybe Tesco will provide any really worthwhile competition. The cost of setting up a bank is prohibitive.
It will be a tough week for equity markets with uncertainty playing more than a spear-carrying role. Also the FED’s attitude towards tapering will be eagerly watched. Is the US economy really going to start selecting another gear when the merry month of May sees the sun high on the yardarm? Or will M/S Yellen have to do a ‘U’ turn in the summer, if the recovery starts to falter! Also will the 1st quarter earnings be significantly better!
UK COMPANIES POSTING RESULTS THIS WEEK – Monday – CLARKSONS, Tuesday – ANTOFAGASTA, COMPUTERCENTER, FOXTONS, INCHCAPE, TYMAN, Wednesday – FRENCH CONNECTION, G4S, PRUDENTIAL, Thursday – Wm MORRISON, SALAMANDER ENERGY, SIG, TRINITY MIRROR,
These are David Buik personal views
Twitter – @truemagic68
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