TODAY’S FAYRE – BOOKIES ARE RARELY THAT WRONG!

TODAY’S FAYRE – Thursday, 18th September 2014

“Once more unto the breach, dear friends, once more;
Or close the wall up with our English dead.
In peace there’s nothing so becomes a man
As modest stillness and humility:
But when the blast of war blows in our ears,
Then imitate the action of the tiger;
Stiffen the sinews, summon up the blood,
Disguise fair nature with hard-favour’d rage;
Then lend the eye a terrible aspect;
Let pry through the portage of the head
Like the brass cannon; let the brow o’erwhelm it
As fearfully as doth a galled rock
O’erhang and jutty his confounded base,
Swill’d with the wild and wasteful ocean.”

William Shakespeare – playwright & poet – 1564-1616

I have been following politics avidly and passionately for over 50 years. I admit I have never had a love affair with Labour politics, being a good old fashioned middle class boy, brought up on aspirations gained from hard work and the free enterprise system. I also can never remember paying any compliment to Gordon Brown. I was never totally convinced that independence for the Bank of England’s MPC was the right course of action. I thought it was a total abrogation of responsibility – in other words passing the buck. However let me doff my ‘titfer’ to the great man from Kirkcaldy and Cowdenbeath. His efforts for the ‘NO!’ campaign have been from the heart and laudable, even though Westminster has gone way over the top in promising the world to Salmond, the SNP and the ‘YES!’ campaign. Inevitably there will be repercussions.

I shall be brevity personified today. I keep looking at the bookies’ odds and they give me small and cold comfort as they are rarely wrong over fundamental issues. On average they offer an average very skinny parsimonious 1/5 on a ‘NO!’ campaign victory and something close to generous odds of 7/2 about a Salmond driven ‘YES!’ campaign. However the political, financial and economic ramifications for such a close vote could be huge! My greatest concern is the damage that could be done to business confidence – not so much from our perspective but from the outside world towards the UK! There are other countries to choose from to do business with.

FED chairman Janet Yellen slightly caught the Street of Dreams and other global investors off guard, by announcing that the FED was in no hurry to hike rates, thanks in the main to poor wage growth and long-term unemployment issues. The FED, however did taper QE by another $10 billion, leaving just $15 billion in place. That balance is likely to be terminated in October. The FED led the market to believe that the FED rate could reach 1.375% by the end of 2015. The FOMC was 8-2 in favour of the motion. Equities took a little heart from Yellen’s comments allowing the main US indices to close just above the Plimsoll line last night, aided and abetted by decent NAHB housing data – the highest since September 2005 and CPI remaining unchanged.

The book for Alibaba’s IPO closed yesterday. The grey market dealings in Alibaba venture to suggest that early trade could see the share price bounce to $81 against an issue range of $66-68. In London yesterday SKY Deutschland rejected BskyB’s €6.75 a share offer as inadequate. As News Corpn own 57% of the German TV operator, I find it hard to think that a price adjustment will be an insurmountable problem. UK unemployment fell to its lowest level since 2005 to 6.2% with employment jumping by 774k to 30.61 million. Low inflation of 1.5% and poor wage rises put any hike in rates by the MPC on the back burner. M&S served notice to open in Scandinavia with 15 franchises in Norway and Finland. Barclays are under the cosh again fighting off ‘dark pool allegations’ levelled by NY attorney-general Eric Schneiderman, who generally takes no prisoners.

This morning Just Retirement, easyJet and Merlin Entertainment posted decent updates. The effort by Booker Group was rather neutral. At 10.20am the FTSE 100 was up 30 points at 6810.

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
http://www.panmure.com – The information in this e-mail and any attachments is confidential and may be legally privileged. It is intended solely for the addressee(s). If you are not an intended recipient, please delete the message and any attachments and notify the sender of miss-delivery: any use or disclosure of the contents of either is unauthorised and may be unlawful.

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: