TODAY’S FAYRE – Wednesday 9th July 2014

TODAY’S FAYRE – Wednesday, 9th July 2014

“This is not Love, perhaps,
Love that lays down its life,
that many waters cannot quench,
nor the floods drown,
But something written in lighter ink,
said in a lower tone, something,
perhaps, especially our own.

A need, at times, to be together and talk,
And then the finding we can walk
More firmly through dark narrow places,
And meet more easily nightmare faces;
A need to reach out, sometimes, hand to hand,
And then find Earth less like an alien land;
A need for alliance to defeat
The whisperers at the corner of the street.

A need for inns on roads, islands in seas,
Halts for discoveries to be shared,
Maps checked, notes compared;
A need, at times, of each for each,
Direct as the need of throat and tongue for speech.”

ASJ Tessimond – poet – 1902-1962

I have been watching football for 60 years including 16 World Cups. Not since Noah left the Ark, has a side capitulated in the manner Brazil did in last night’s semi-final against Germany. It struck me that both Luiz and Marcello were playing this game in their dreams! They never turned up! How they missed Neymar and Tiago! In the first place Brazil never could afford to host this competition; let’s hope there is no civil unrest, when the curtain comes down on Sunday night.

I must say I thoroughly endorse Mark Field’s strongly felt views that the Chancellor should not attack tax sheltering retrospectively. If the UK’s tax system is so anachronistic, then change the laws. Let me remind the government that George Orwell died in 1950 – 1984 is dead! Long live 1984!

When I wrote my market update at 2.00pm yesterday, M&S’s trading statement and AbbVie’s reinvigorated overtures towards Shire dominated the headlines. However at that time the FTSE was very slowly easing back – down about 40 points but without the threat of venomous threats, which were starting to appear on the Street of Dreams, created by a compendium of reasons – rates, geopolitical issues and valuations. Investors vented their spleens on a few stocks, particularly social media – Twitter (P/E 150 x!!) -7%, Facebook -4.2% and Pandora -7.2%. Biotechs were also down 4.6% on aggregate. Banks such as JP Morgan and Goldman lost 1.6%. Concerns over valuations started to hit Wall Street hard. Could the S&P 500 sustain a 17.1 X P/E ratio? Maybe it can but risk was taken off the table in case 2nd quarter earnings do not pass muster. Market bears suggest that a 10% correction cannot be ruled out! Alcoa’s numbers beat the street – eps of 18 cents against 12 cents estimation, but they came too late to placate market bears!

Anyway these fears reverberated in London in the latter part of the afternoon leaving the FTSE 100 light of 85 points – down 1.25%, with the DAX easier by 1.35% and the CAC by 1.4%. On the back of a profits warning from Air France/KLM, IAG and easyJet were clattered – down about 6%. Consequently shareholders in Tui and Thomas Cook felt the wheels of pain across their backs as well – both down 5%. Airlines are suffering margins of profits as oil remains sky high and cargo demand drops off.

Enough has been written overnight on M&S and Shire to deal with unemployment in forestry. Suffice to say that the SHIRE tale will run and run, not doubt bringing other dramatis personae on stage such as Bristol Myers Squibb and Allergan, if the latter does not fall in to the hands of Ackman, Larient et all. Whilst on the subject of the cost of clothing and food, highlighted in an excellent article in the Telegraph by Gordon Rayner – In the past year items in shops have dropped 1.8% and clothes by 13.7% year on year. In the case of food, the 4 large supermarkets have cut prices by an average of 8.3% in the past year, ably driven by Lidl and Aldi.

The NIESR tells us that the UK economy is flying with 2nd quarter GDP coming in at +0.8% – aka 3.2% year on year – the best set of economic data for at least 6 years. What a pity that yesterday’s 1.3% drop in factory orders attempted to put a hole in that theory. Sterling came under a little pressure, but not for long – remaining above the $1.7140 level against the Greenback.

Having dealt ferociously with BNP with an $8.9 billion fine, the US regulatory authorities have now turned their attentions to Commerzbank and Deutsche Bank. In the case of the former a fine of a parsimonious $500 million for breaking sanctions for Iran and Sudan may be forthcoming. No doubt all will be revealed. Citigroup may also have to settle a $4 billion fine for mortgage miss-selling.

Delighted for Dr Cable that he has the support of ‘Labour Luvvie’ peer, Lord Hollick, over the threat of dangerous and deleterious breaking of pledges by international predators of companies on these shores! That’s very reassuring!

THORNTON’S, UK MAIL, BOOKER GROUP, JD WETHERSPOON, ALLIANCE PHARMA, INTERSERVE and 888 Holdings posted results and trading statements today. UK Results for the rest of the week include – Thursday – ASHMORE GROUP, BARRATT DEVELOPMENT, BURBERRY, SUPERGROUP, AB FOODS (TS), BLOOMSBURY (TS), HALFORDS (TS), HAYS (TS), PREMIER OIL (TS). Friday – EXPERIAN, MONEYSUPERMARKET.

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