TODAY’S FAYRE – Thursday 4th September 2014

TODAY’S FAYRE – Thursday, 4th September 2014

“Scarlet coats, and crash o’ the band,
The grey of a pauper’s gown,
A soldier’s grave in Zululand,
And a woman in Brecon Town.

My little lad for a soldier boy,
(Mothers o’ Brecon Town!)
My eyes for tears and his for joy
When he went from Brecon Town,
His for the flags and the gallant sights
His for the medals and his for the fights,
And mine for the dreary, rainy nights
At home in Brecon Town.

They say he’s laid beneath a tree,
(Come back to Brecon Town!)
Shouldn’t I know? — I was there to see:
(It’s far to Brecon Town!)
It’s me that keeps it trim and drest
With a briar there and a rose by his breast —
The English flowers he likes the best
That I bring from Brecon Town.

And I sit beside him — him and me,
(We’re back to Brecon Town.)
To talk of the things that used to be
(Grey ghosts of Brecon Town);
I know the look o’ the land and sky,
And the bird that builds in the tree nearby,
And times I hear the jackals cry,
And me in Brecon Town.

Golden grey on miles of sand
The dawn comes creeping down;
It’s day in far off Zululand
And night in Brecon Town.”

John McCrae – Canadian soldier & poet – 1872-1918

It is hardly surprising that Francois Hollande’s Presidency of France 5th Republic has been so controversial and fractious, having incurred the wrath and indignation of voters for the poor performance of the French economy. Also the slew of personal dirty laundry he has been seen to hang out recently concerning his love life in recent years has been prolific in the extreme and anything but boring – Segolene Royale, Valerie Trierweiler and Julie Gayet have all enjoyed a 6-cylinder driven emotional and steamy relationship with the French President in recent years. President Hollande’s appetite for amorous challenges seems to know no bounds!

I am told there were only about 40,000 fans at Wembley last night to watch a boring 1-0 win against Norway. The average gate since 2007 has been 79,000. That just about says it all – that was the response to England’s pitiful performance in Brazil, resulting in the fans protesting by staying away in their droves.

Initially equity markets across the spectrum chose to put their best foot forward on news that Ukraine may have settled its difficulties with Russia. Then confusion reigned, as both parties begged to differ; so some gains were given back though the DAX gained 1.2%, the CAC 0.99% with the FTSE 100, clearly less volatile and vulnerable to Russian antics gaining a mere 0.6% or 44 points at 6873. Insurance and banking sectors were strong. Punters are enjoying a current flirt with BP – +1.7% and some still believe that Softbank still has amorous feelings towards Vodafone – +0.7%. Hargreaves Lansdown posted effective growth, but the shares fell 5% over concerns on commission rates. Otherwise it was pleasing to see Ashtead Group post a 12% increase in sales – +3%. Volumes remained dispiriting – indecently comfortable, whilst markets are underpinned by QE or colloquially as ‘funny money!’

The Street of Dreams remained quite flat apart from the NASDAQ, which eased by 0.58%, mainly triggered by activity in Apple shares, which saw huge turnover in losing 4,2% for two reasons – concern about hacking which exposed interesting pictures of celebrities and also news that Samsung would attempt to take the wind out of Apple’s forthcoming presentation of iPhone6, by announcing three new additions to their hardware portfolio, which they duly did in Germany yesterday – Galaxy 4, note edge and gear VR. In fairness Apple’s shares have increased in value by 9.3% since 7th August 2014. Car Sales in the US in August could only be described as ebullient with a total of 17.53 million likely to be reached this year – the highest level since 2007. An improvement in consumer confidence and breathtakingly cheap financing facilities have contributed to the euphoria. Chrysler sales rose by 19%, Nissan by 11.5%, Toyota by 6.3%. Only Ford disappointed – down 4% on extended closures of their factories.

All the headlines will be grabbed by Central banks today. The FED announced yesterday that the US economy was growing moderately and modestly in 10-12 regions – no talk of higher rates. This is still unlikely until February 2015. The Bank of Japan had no changes to make to its monetary policy. Many believe that the Japanese authorities are still too optimistic about growth in the months to come. As for the Bank of England’s MPC meeting. We expect the base rate to remain at 0.5% where it has been since March 2009 with the QE facility at £375 billion. Talk of higher rates in my opinion is precipitous. Why? No wage inflation. The EU’s economy is in rags and we do 40% of our trade with the EU. Though the service sector is ebullient, manufacturing and exporting have been below par. Finally the property sector prices seem to have come off the boil. Despite the fact that Weale & McCafferty will vote for a hike, next week’s minutes should show a comfortable majority of 7-2 in favour of the status quo! As for the ECB, it is unlikely that QE will be introduced today, even though deflation and zero growth stare the region in the face – inflation just 0.3%. Mario Draghi, ECB President is likely to introduce a facility for buying asset backed securities pro-tem. I suspect it won’t be enough. However with Merkel and Schauble dead against QE, Draghi will have his work cut out in the months to come.

This morning Direct Line and Dixons Carphone confirmed as going into FTSE 100 100 whilst Barratt Development and Rexam drop out. Standard Life has sold their entire Canadian business for £2.2bn in cash and are returning 73p to shareholders. That news will be well received – shares expected to be up 5%. Good traffic stats from easy jet – Up 1%. Balfour Beatty also returning 200 mill to shareholders after selling Parsons Bickerhoff. Finally there were good numbers from Betfair.

These are David Buik personal views

Twitter – @truemagic68

David Buik

Market Commentator

D +44 (0)20 7886 2775
Panmure Gordon & Co
One New Change | London | EC4M 9AF | United Kingdom
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