TODAY’S FAYRE – Wednesday 16th July 2014

TODAY’S FAYRE – Wednesday, 16th July 2014

“”It is eighteen years ago, almost to the day –
A sunny day with leaves just turning,
The touch-lines new-ruled – since I watched you play
Your first game of football, then, like a satellite
Wrenched from its orbit, go drifting away

Behind a scatter of boys. I can see
You walking away from me towards the school
With the pathos of a half-fledged thing set free
Into a wilderness, the gait of one
Who finds no path where the path should be.

That hesitant figure, eddying away
Like a winged seed loosened from its parent stem,
Has something I never quite grasp to convey
About nature’s give-and-take – the small, the scorching
Ordeals which fire one’s irresolute clay.

I have had worse partings, but none that so
Gnaws at my mind still. Perhaps it is roughly
Saying what God alone could perfectly show –
How selfhood begins with a walking away,
And love is proved in the letting go.”

Cecil Day-Lewis – poet & writer – 1904-1972

I have never known a cabinet reshuffle grab so many headlines in the wake of the public’s declining interest in politics as Mr Cameron’s recent hatchet job, since the ‘night of the long-knives’, when Harold MacMillan decimated his government back in 1962, when I had just come out of short trousers and was forced by my father to read the political pages of the Daily Telegraph and the Daily Mirror, then edited by Cecil King! That’s all we had in those days – voracious reading of newspapers and a bit of TV every now and again – ‘The Brain’s Trust’, Sir Robin Day at his most cantankerous plus some delightful one- on-one interviews with Robert Harris.

In what was another frustratingly quiet trading market there was plenty of economic and deal news that affected share prices peripherally. The FED’s Janet Yellen’s geek talk is still hard for a layman like me to fathom out! Sometimes I think that she’s hawkish; then she turns dovish! On the first day of her 2-day testimony to Congress she expressed that there was still significant slack in the Labour market and remained non-committal about the rate of recovery. She was also concerned that small-cap operations were more vulnerable to interest rate fluctuations – dovish? Then she said she was concerned about the valuation of social media stocks – hawkish! Anyway markets seemed as confused as I was. So the Street of Dreams scratched the back of its head and closed in a rather muted manner – Dow +0.03%, S&P -0.19%, NASDAQ -0.54% (social media stocks mini sell-off).

Over this side of the Pond the news on UK inflation was worse than expected – 1.9% increase last month against expectations of 1.6%, which is now in excess of wages 1.7%. This news will not have escaped the BOE’s notice and those like Martin Weale baying for a rate rise will have been preening themselves like peacocks. As the expression goes – “Nearer and nearer draws the time…..” Last month there was no food or clothes inflation. This last month there was!

On the deal front the $27 billion deal involving Reynolds American and Lorillard as the matinee idols and BATS and IMPS as the spear carriers was confirmed. What caught my imagination even more was the arrangement made between Apple and IBM to develop phone apps for business customers. That way well put Blackberry’s nose out of joint!

The quality of 2nd quarter earnings yesterday, apart from a modest setback from Yahoo! was better than expected. JP Morgan beat expectations with a bit in hand and as for Goldman Sachs’s numbers, boosted by mega-deal income of almost indecent proportions, they veritably sprinkled Wall Street was largesse! Johnson & Johnson’s efforts were not exactly shabby. After hours Intel posted very encouraging sales.

In London yesterday the FTSE 100 eased out some value – mainly caused by inflationary issues. This index remains rudderless and needs some colour from the reporting season to galvanise itself out of the doldrums. This morning British Land posted a decent update. ICAP confirmed what we all expected – an erosion of their business due to tough regulatory constraints. Give Xavier Rolet his due – the LSE’s show is back on the road. Rio Tinto posted encouraging if not record mining production. Finally there was a small and potentially disturbing nugget of news from Royal Mail. Its French operation – GLS – is being investigated for ant-trust transgressions. If RMG is found guilty, a heavy fine could be imposed.

UK employment data due at 9.30am is expected to see unemployment continuing to fall.


During the rest of this week the following companies post numbers or trading statements –Thursday – MOTHERCARE, LAND SECURITIES, COMPUTERCENTER & SPORTS DIRECT.

These are David Buik personal views

Twitter – @truemagic68

David Buik

Market Commentator

D +44 (0)20 7886 2775
Panmure Gordon & Co
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