TODAY’S FAYRE – Monday, 13th October 2014

“I dreaded that first Robin, so,
But He is mastered, now,
I’m some accustomed to Him grown,
He hurts a little, though—

I thought if I could only live
Till that first Shout got by—
Not all Pianos in the Woods
Had power to mangle me—

I dared not meet the Daffodils—
For fear their Yellow Gown
Would pierce me with a fashion
So foreign to my own—

I wished the Grass would hurry—
So—when ’twas time to see—
He’d be too tall, the tallest one
Could stretch—to look at me—

I could not bear the Bees should come,
I wished they’d stay away
In those dim countries where they go,
What word had they, for me?

They’re here, though; not a creature failed—
No Blossom stayed away
In gentle deference to me—
The Queen of Calvary—

Each one salutes me, as he goes,
And I, my childish Plumes,
Lift, in bereaved acknowledgement
Of their unthinking Drums—“

Emily Dickinson – poet –1830-1886

In isolation one cannot help but admire the fashion sense, posture and the glorious femininity of IMF CEO. Mme Christine Lagarde. Over the weekend she could have been at Longchamps presenting the prize to the owner of the winner of the ‘Arc’ rather than addressing delegates in Washington on global growth! However all that wonderful French charm does not wash with me, and more to the point, it does not ‘cut the cookie’ with investors at large! It’s just rhetoric. She needs to get hold of Chancellor Merkel and give her a good metaphorical slapping for being so insufferably selfish. We understand her stance towards financial disciplines and austerity, but something needs to be done; otherwise this EU economy is going to collapse like a pack of cards and fall in to a vortex of recession!

Give the ECB’s Mario Draghi his head and the authority to introduce QE. Let infrastructure projects be introduced! Capital projects are great. Excess borrowing is unacceptable; so is Germany’s trade surplus, particularly if Merkel believes in Federalism and there is no reason to suppose that she has changed her mind! The fall in the value of the Euro may help Germany’s flagging exports temporarily, but few others will benefit in this current climate. The EU’s political inertia has led to a moribund attitude, resulting in the stench of fear permeating all over Europe. I, also, am insufferably selfish and I dislike the idea of the EU’s economic incompetence damaging the UK’s recovery process. And just whilst I am at it, Hollande’s government is an absolute disgrace! It will take years for France to recover its poise.

Let’s be pragmatic and look at the performance of some of these European bourses since the start of the year – FTSE 100 -6.6%, DAX -8.7%, CAC -5.7%, MIB (Italy) -23.6% & IBEX (Spain) +2.1%. Apart from Spain, which is recovering from rock-bottom levels the rest of it looks ‘pony’ to me! – Absolutely unacceptable. Unfortunately most bourses don’t perform in isolation; hence sentiment has turned 180 degrees in 6 weeks.

Today news of China’s improved import and export data saw miners rally to the cause – the sector up 1.5%. Though Royal Dutch Shell is down 0.5%, BP is up 0.25%. The mid-cap oil stocks look soggy! Having been down 1.5% post Jeffries’s upgrade, Astra Zeneca is now unchanged. ITV continues its run on the rails – up 0.75%. BskyB, after a strong performance recently has paused for reflection today ahead of numbers later in the week – down 0.5%. Airlines are slightly better after last week’s larruping – IAG and easyJet both up 0.25%. At 9.14am the FTSE 100 was down just 20 points at 6320. The futures ahead of Chinese trade news felt that the market could open up down 80!

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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