TODAY’S FAYRE – Friday, 16th January 2015


 Bright star, would I were steadfast as thou art! –

Not in lone splendour hung aloft the night,

And watching, with eternal lids apart,

Like Nature’s patient sleepless Eremite,

The moving waters at their priestlike task

Of pure ablution round earth’s human shores,

Or gazing on the new soft fallen mask

Of snow upon the mountains and the moors –

No -yet still steadfast, still unchangeable,

Pillowed upon my fair love’s ripening breast,

To feel for ever its soft fall and swell,

Awake for ever in a sweet unrest,

Still, still to hear her tender-taken breath,

And so live ever -or else swoon to death.” 


John Keats – poet – 1995-1821  


Remember – Howard Hughes is legendary for his success as an industrialist, aviator, engineer, film producer, director and philanthropist. For much of his lifetime he was the richest man in the USA. He is also remembered for his eccentric behaviour & reclusive lifestyle in later life, caused in part by a worsening obsessive-compulsive disorder. His desire for privacy so fierce and his isolation so complete, that even 25 years after his death, inaccurate stories continue be circulated and published as fact. – 1905-1976  



Eoin Morgan’s captaincy of England’s ODI team feels like a breath of spring air to me. I know that England was only playing a President’s X1 on Wednesday, but it was a decent one. To rack up 391 runs in 50 overs with Ian Bell smashing 185, would be no mean achievement against the ‘blind club.’ However in this class of cricket, it was no mean achievement. In my humble opinion Morgan has told his troops to play with gay abandon. It is better to have a go and die in the attempt than play in a negative manner to the total dissatisfaction of players and fans alike!   


Considering the world is not yet in total economic meltdown, the persistent level of volatility that markets have experienced in the last few weeks is really off the Richter scale. Yesterday’s pre-emptive strike by the Swiss National Bank withdrawing its foreign exchange cap, sent foreign exchange, equity and to a lesser degree bond markets in to turmoil. One can only surmise that this act of financial aggression was to counteract the introduction of massive QE by the ECB in the coming weeks, presumably post the Greek General Election. Assuming Syriza from the ‘left’ is the largest party, there will no doubt be some horse trading with the Troikas to prevent talk of Greek exit from the EU.   


I don’t think markets have ever been the recipient of such gross discourtesy by a Central Bank. A calculated move of this nature seemed to catch the FED, BOE, BOJ and the ECB on the hop! Even the IMF’s Mme Lagarde seemed to know nothing about it. Traders certainly vented their spleen in taking full retribution against the unexpected decision. Initially the CHF rallied 16% against the Euro, but as the evening lengthened it was nearer 30%. The Swiss Stock market fell by 8.7% yesterday. The fact that the CHF has lost its safe haven is probably no bad thing, it was just the manner it was conducted by the authorities left a great deal to be desired. All of a sudden Swiss Exports look very expensive – 40% of Swiss exports got to Europe. Not surprisingly some traders were hurt. Even the excellent IG Group would appear to have dropped £30 million, which took its shares down by 5% on the day. My colleague and friend, Simon French at Panmure Gordon made a very succinct remark – “The error investors and market observers made was believing in a peg. The USD rally is laying waste and I suspect Janet Yellen will take no action, nor should she!  There is also some concern that a ‘Swiss Franc Mortgage Panic’ could manifest itself in 2015. Countless homeowners outside of Switzerland have been sold mortgages in Swiss francs. They will now see their monthly repayments skyrocket by 30% thanks to the Swiss abandoning the peg.  


Putting aside the carnage which resulted from the SNB’s decision, other European stock markets took hold of the bit, aided and abetted by many protagonists, including Goldman Sachs, who were determined that the introduction of QE by the ECB was just around the corner. Consequently the FTSE, DAX, CAC and other European equity bourses just erupted. Investors bought most things that moved. The DAX added 2.2%, the CAC 2.37% and the FTSE 110 points to 6498 – up 1.7%. The FTSE’s rally was never going to be as spectacular as its other European peers, because of the weighting of oil, energy and mining stocks. Anyway even miners and oil regrouped somewhat yesterday and there was some serious ‘light-footed’ remedial action taken by the market makers, all wearing their new Christmas Adidas pumps! For day traders who never have their iPads off, these market conditions are ‘manna from heaven!’ But for investors and ‘trend players’, who have had to pay huge margin calls, it’s been ‘tin-hat’ conditions – awful! Even decent results from AB Foods, H&M, Experian and lesser efforts by Home Retail virtually went unnoticed yesterday, though the last mentioned failed to pass muster and the shares eased by nearly 6%.  


On the Street of Dreams yesterday, indifferent results from Bank of America, Citigroup and Best Buy were short of expectation and the ‘gilt was immediately taken off the ginger bread!’ At the end of the session the DOW was down 0.61%, the S&P 500 by 0.92% and the NASDAQ by 1.48%. The Asian session today was influenced by New York’s negative machinations. The ASX closed down 0.6%, the Shanghai Composite was up 1.38% at lunchtime, though the Hang Seng was light by 0.7%. The NIKKEI was down 1.4% towards the close.  Though the SNB’s ‘exocet missile’ has certainly muddied the waters of the investment world, concern is also building that growth throughout the globe is falling. Also the US earnings season to date has been less than impressive. Perhaps Goldman will send us off for a decent weekend, when it has posted its numbers at lunchtime.  


In closing I thought I would make a comment on JP Morgan Chase’s Jamie Dimon’s blast at the US regulators, which have cost this Wall Street mogul $25 billion in fines in the last 5 years – a year’s profit!  In 2008 Mr Dimon was the ‘darling’ of the banking market, having answered Hank Paulson, the US Treasury Secretary’s call to pick up and garage Bear Stearns at the time and pinnacle of the credit crisis. Dimon and JPM had a great crisis and came out smelling of violets. However since then, management complacency has crept in. Fraud and misdemeanours including recent FX manipulations has tarnished this bank’s reputation. Mr Dimon is complaining that banks are answerable to five or six regulators and the negative effect it is having on the business. On Wednesday JPM disappointed with only a 10% return on capital, which just about pays for that capital. Shares were down 4%. Nonetheless great bonuses were paid! Here in Old Blighty our banks need to remember that our regulation, as a broad generalisation, is nothing like as tortuous as dealing with the US’S SEC and all its alumni!   



David Buik

Market Commentator


+44 (0)20 7886 2775

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


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