TODAY’S FAYRE – Sunday, 11th January 2015


 Slowly, silently, now the moon

Walks the night in her silver shoon;

This way, and that, she peers, and sees S

ilver fruit upon silver trees;

One by one the casements catch

Her beams beneath the silvery thatch;

Couched in his kennel, like a log,

With paws of silver sleeps the dog;

From their shadowy cote the white breasts peep

Of doves in silver feathered sleep

A harvest mouse goes scampering by,

With silver claws, and silver eye;

And moveless fish in the water gleam,

By silver reeds in a silver stream.” 


Walter de la Mere –author & poet – 1907-1973



I decided to go racing at Huntingdon with a good mate on Friday! As you can imagine it was wall to wall coverage of the sieges in Paris – their ‘9/11’ – on BBC Radio 5-live during the journey there and back, with detailed and very professional input from Nicky Campbell, Rachel Burden, Peter Allen, Tony Livesey, Anna Foster with copious correspondents at various spots in Paris and Dammartin.

It was harrowing stuff, very hard to portray on Radio, but nonetheless descriptively well done. However I cannot help feeling that the media as a whole were building themselves into a crescendo of frenzied hysteria – not 5-live but generally. I suppose it is hardly surprising in response to this barbaric attack against humanity.

I take nothing away from the fact that the media showed bravery beyond the call of duty for being there. However perhaps the coverage was a tad too intrusive. I suppose that’s what the public demands these days. Needless to say I salute all those gathered in Paris this Sunday for the solidarity March. May these despots be condemned to eternal damnation!



Last week, in terms of market machinations, was the most illogical I can ever remember. What most people were saying at the start of the week was – where is the good news coming from? It was taken as read that the US economy offered hope, but remembering that the US is an isolationist economy, why would this fact help trigger such a sharp rally that equities experienced on Wednesday and Thursday? Until Wednesday, US equity markets and the FTSE 100 had surrendered about 4% since the start of the year. The negative sentiment was totally understandable. China was creaking and requiring more stimulus packages. The EU was flirting with deflation. The ECB was threatening to disappoint with inadequate QE contingencies. In fairness the ECB’s Mario Draghi was caught between ‘a rock and a hard place.’ Until he knows the outcome to the Greek election, how can the ECB plan, even though this Central bank, run by Chancellor Merkel, must go down as one of the most indecisive in ‘living memory?’



Oil continues to fall out of bed with Brent crude having briefly drifted below $50 a barrel. Few economists are convinced that cheap oil is brilliant for growth. The Dollar looks rampant, but has it come too far too quickly? I’ve nearly finished, but I must make reference to the geopolitical concerns expressed across the spectrum over Russia intransigence over Ukraine and the economic damage that will be inflicted by sanctions and reprisals. They hang over the EU like dark storm clouds.


Finally, no one is entirely sure how robust 4th quarter earnings which start in earnest next week, will be. Notwithstanding all those imponderables, suddenly the ‘charming Brooklyn Grannie’, who goes under the pseudonym of the FED chairman tells us on Wednesday that she is not too bothered about rates going up – certainly not before April and the earliest. That news together with veiled rumours that the ECB might actual do something positive in regards to QE, was enough to provide some momentum towards a very sharp rally. By last Thursday evening most of the year’s losses had been wiped out, as European and US bourses selected another gear!


Then on Friday despite certain aspects of the US employment data looking positive – Non-farm-payrolls +251k in December and unemployment dropping from 5.8% to 5.6% and from 10% in March 2009 – equities started to feel heavy. The fact that wage inflation had fallen in December by 0.2% to just 1.7% above last year’s number, will give the FED and market geeks cause for concern. If the truth be told, nothing had really changed from the start of the week in terms of fundamentals apart from a plethora of froth!


The price gyrations last week were violent; However by the end of the week the S&P 500 eased by -0.49%, the FTSE 100 by 0.7%, European bourses by an average of 1% and the NIKKEI by 1.45%. Energy stocks in New York had a roller-coaster ride, as they did in London. Retail was also out of sorts with Bed, Bath & Beyond easier by 7%, Macy’s by 2.7% and Starbucks by 4%.


Energy, oil and mining stocks were volatile, though analysts were beginning to see some value with Anglo-American being flagged up as a ‘BUY.’ The big supermarkets were in the frame. Tesco’s Dave Lewis made all the right noises, despite a 2.9% cut in like for like sales in the last quarter, by cutting the dividend, chopping 43 branches out, putting another 51 under review, ‘hosing’ Chris Bush out and wheeling Matt Davies in from Halfords. Threadneedle Street & Canary Wharf just love blood running in the gutter!


Tesco’s shares shot up a ridiculous 16% on Thursday, though on Friday they surrendered 2.4%, once it became clear that Tesco’s debt had been downgraded by S&P to junk status. Figures at Sainsbury were better – slightly – again Mike Coop, the CEO was making all the right ‘billing & cooing noises’ towards the media and analysts. Frankly the trading statement was bad but there were signs of improvement. What amused me was the fact there was no contrition from M&S at all. Their performance away from food was unacceptably bad. Much of the disappointment was down to on-line glitches in Leicestershire, but frankly the fashions are dowdy. I am glad for Marc Bolland that I am not an influential shareholder as he would be on his bike by now. Enough is enough! M&S’s shares are down 10% in the last month. IAG is expected to up its bid to £1.25 billion for Aer Lingus (Shares up 9.5%). House builders were under the cosh with Persimmon, Barratt and Taylor Wimpey all surrendering 5%. ITV was in demand as speculation grows that the likes of BT or other large predators may be mulling over a bid. With Standard Chartered’ share price having fallen by 30% in the last year, something had to give in terms of cutting costs and shoring up the damage. Peter Sands, the CEO hangs on tenuously, as 4000 staff may be made redundant globally as the Far-East based bank in terms of business cuts out its cash loss-making equity business. This business has brought nothing to the party for years. Wm Morrison is likely to post the worst numbers of all the major supermarkets when CEO Dalton Phillips is rumoured to be posting a 3.8% drop in like for like sales in the last quarter.



As for the UK’s economy, inflation figures on Tuesday may reveal that inflation in December fell below 1%, which may cause Governor Mark Barney to write to George Osborne as it falls below the 2% guideline. This will be the first time a letter of this nature has been written since the BOE’s independence in 1997. There have been many letters when inflation has exceeded 2%. The Chancellor may be forced to adjust North Sea oil revenue taxation.


Amongst companies posting results and trading statements this week include – TAYLOR WIMPEY, GREGGS, SIG, Wm MORRISON, DEBENHAMS, BURBERRY, FENNER, OCADO, PREMIER OIL, MOTHERCARE, AB FOODS, TULLOW & BOVIS.



Volatility may rule OK for some weeks to come!



David Buik

Market Commentator


+44 (0)20 7886 2775

Panmure Gordon & Co  One New Change | London | EC4M 9AF | United Kingdom


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