TODAY’S FAYRE

TODAY’S FAYRE – Thursday, 27th November 2014

 

You whom I loved like an unnamed flower,

plucked too soon, I will tell them of

you as Iseek your shifting image and again

remember,beautiful companion of the irrepressible cry.

I see first the dancer, checked by lingering fate

,as though her youth were being cast in bronze;mourning

and listening till in celestial response music poured

through her heart’s transmuted gate.

Illness drew nearer. Already in the shadow’s clasp

,her darkening blood, unconvinced, yet broke the grasp

to pulse forth once more the familiar spring fervor.

From dark and relapse, it often

 

surged rebounding,mortal and bright, till at last,

with a fearful pounding,it flowed

through the hopelessly open door.”  

 

Rainer Maria Rilke – poet – 1875-1926

 

Right across the world everyone’s heart goes out to Philip Hughes’s family and his host of friends, who will be grieving at his loss at the tender age of 25 – 26 on Sunday. This talented batsman was at the pinnacle of his career. Middlesex supporters like me remember him for his great, though short term contribution, in 2009, when he averaged 150! Spare thoughts also for Sean Abbott – NOT his fault! Imagine how he feels. RIP

 

“They say there are two sides to everything. But there is only one side to the stock market; and it is not the bull side or the bear side, but the right side. It took me longer to get that general principle fixed firmly in my mind than it did most of the more technical phases of the game of stock speculation.”Jesse Livermore – Wall Street trading titan – 1877-1940

 

 

His Holiness Pope Francis, when addressing the European Parliament in Strasbourg on Tuesday warmed the cockles of my heart in comparing the EU to an old grandmother – ‘somewhat elderly and haggard’ and suffering from weariness and ageing! His Holiness went on to say – “The great ideas which once inspired Europe seem to have lost their attractiveness, only to be replaced by the bureaucratic technicalities of its institutions”. Not many of us would argue with his assessment.

 

I started to listen yesterday to the gospel according to St J-C Juncker as his dreams and aspirations for putting life in to the moribund EU economy by injecting E300 billion in to infrastructure projects over the next five years.  However anyone wants to dress up this ideology, its plain vanilla ‘Federalism’ and frankly I am just not up for that.  Apparently, the EU’s budget may have a shortfall of £259 billion. ‘Old Blighty’s’ share could be as much as £33.7billion.  You can imagine that Nigel Farage will be having a field day if that figure turns out to be true. I doubt PM Cameron will be that pleased either! – As the old expression goes – “Nearer and nearer draws the time – the time that surely be, when the earth shall be filled with the Glory of God as the waters cover the sea!”

 

The economic data in the US was mixed yesterday, but not dispiriting.  Consumer spending climbed in October, though slightly disappointingly. Initial Jobless claims rose more than many had hoped for – to 313,000. Also new homes sold at a slower pace in October.  However it will be the outcome of today’s OPEC meeting in Vienna that will be weighing heavily on traders’ minds, particularly as there was no guidance as to whether some OPEC countries such as Saudi Arabia, Mexico and Russia had come to any agreement as to whether supplies would be reduced. Brent oil dropped to $78 a barrel. The Dollar was a little weaker against Sterling, the Euro and the Yen. Markets were not active as there was always going to be a rush to the door to get home to the Hamptons to enjoy Thanksgiving – plenty of turkey cranberry sauce followed by pumpkin pie washed down with buckets of Chardonnay. Then tomorrow – Black Friday – this is the biggest shopping day of the year on the US calendar.  Retail is so important, accounting for 70% of US GDP. It has recently been superseded by China’s ‘Singles’ day – not surprisingly considering there are 1.4 billion in China!

There was satisfactory news for UK GDP. In the 3rd quarter it rose by 0.7% down from 0.9% in the 2nd quarter. The annualised rate was 3%. Investment fell quite sharply which is worrying, but with such political uncertainty and also concerns for global growth, this reaction cannot be that much of a surprise. Consumer spending was encouraging.

 

Greene/Green is the colour and the name; both had bad days at the office yesterday. In the case of Moya Greene, I thought Vince Cable was mealy-mouthed – nothing new there – about her concerns that suppliers were cherry picking Royal Mail’s orders. I don’t think that is fair as she warned about the likelihood at the time of last October’s IPO. As for Harriet Green; I doubt chairman Frank Meysman and new CEO Peter Frankhauser could have done a worse PR exercise on how to replace her, if they had tried. To just say her work is done and Peter Frankhauser is better placed to take the business forward, when shovelling Green out on to the street just does not wash. Thos Cook, under her guidance saw the share price rally from 14p to a high of 190p. Yesterday the shares on the news of her indecently hasty departure were larruped – down by 17%. There must have been acrimony for this severance to have manifested itself without explanation. What rubbish interpersonal skills.

 

It was rather a listless session yesterday in London, with the FTSE 100 closing down by just one point. There were decent numbers from Wolseley, Compass and DMGT, yet it was insufficient to give markets any momentum. There was much gossip about Aviva having been in conversation with Phoenix about a number of closed book businesses of which Friends was just one. Though there are people not keen on an Aviva/Friends deal, it is too early to say it is dead. BT’s Gavin Patterson was given a headache, when it was rumoured that the likes of Vodafone would moan to the competition authorities if BT were to acquire EE or o2. A deal of that nature could trigger an enforced split. I think it is fair to say that an objection would be taken as read. Its dog eat dog out there in the telecoms game. If Telefonica sell o2, would that make Telefonica vulnerable to take over? This morning Poundland posted encouraging results. Stagecoach and Virgin won the East Coast franchise for 8 years at a cost of £3.3 billion. Stagecoach added 9% in value and sadly First Group were left rather exposed and lost a further 4% on top of 10% earlier in the week.

 

Yesterday New York saw the DOW add 0.07%, the S&P 0.28% and the NASDAQ 0.67%. Apple and Hewlett Packard made good progress. The Strong Yen and global growth concerns took Asian markets lower, though Samsung announcing a $2 billion buy back saw shares rally by 6%, having been down 10% on the year. Diahatsu recalled 20k vehicles and Toyota felt obliged to recall 50k cars.

 

David Buik

Market Commentator

 

+44 (0)20 7886 2775

Panmure Gordon & Co  One New Change | London | EC4M 9AF | United Kingdom  www.panmure.com

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