TODAY’S FAYRE

TODAY’S FAYRE – Sunday, 18th January 2015

 

 Unwinding in a cavernous bodega he suddenly Burst out:–

Barman, these tumblers empty themselves

And yet I persist; I am wedged in the giant eye Of an invisible needle.

Walking through doors Or into them, listening to anecdotes or myself spinning

A yarn, I realize my doom is never to forget My lost bearings.

In medias res we begin And end:

I was born, and then my body unfurled

As if to illustrate a few tiny but effective words–

But–oh my oh my–avaunt.

I peered Forth, stupefied, from the bushes as the sun set Behind distant hills.

A pair of hungry owls Saluted the arrival of webby darkness; the dew

Descended upon the creeping ferns.

At first My sticky blood refused to flow, gathering instead

In wax-like drops and pools; mixed with water and a dram

Of colourless alcohol it thinned and reluctantly Ebbed away.

I lay emptied as a fallen Leaf until startled awake by a blinding flash

Of dry lightning, and the onset of this terrible thirst.” 

 

Mark Ford – poet – 1962 

  

“Wealth – any income that is at least one hundred dollars more a year than the income of one’s wife’s sister’s husband.”H.L. Mencken – columnist, satirist & editor -1880-1956

 

 ‘Sprinter Sacre’ is by some margin the best two mile chaser I have ever seen and I have witnessed the deeds of a few in the past 25 years – ‘Pearlyman’, ‘Moscow Flyer’, ‘Viking Flagship’, ‘Deep Sensation’, ‘Kauto Star’, ‘Edredon Bleu’ ‘Flagship Uberalles’ and ‘Sire de Grugy’ to name but a few! His reappearance on Saturday, after a year off, was not a disaster by any means, but in years gone by he would have carried his opponents round on his back and won by 10 lengths. Hopefully he will come on for the run and maybe better ground at the Cheltenham Festival will help his cause! However a return to yesteryear’s halcyon days is far from guaranteed!  

 

Last week global indices finished as follow – S&P 500 eased by 2%, the FTSE 100 gained a net 0.76% with European bourses adding 4.3% and the NIKKEI losing 1.9%. So what, you might say? – Another week at the office ticked off on the calendar. However, it was anything but! It was another highly volatile tortuous week, with a breath-taking level of news flow. Dealers and investors alike were totally mesmerised and dumbfounded by seismic waves of volatility. Not surprisingly volumes were not great. Fortunes could easily have been lost by trading too much.   

 

Top of the agenda was the Swiss National Bank’s decision to deliver an ‘exocet’ missile on the unsuspecting market place, in the form of unpegging the Swiss Franc against the Euro, without any notice being served to any Central bank, government or the IMF. Though the Swiss government was well within its rights, it is possible that pockets of economic war will declared in places. There are bound to be reprisals for gross discourtesy and ‘Maverick’ behaviour. The Swiss Franc gained about 30% against the Euro at the end of the week. This makes holidaying (skiing) heinously expensive in the Swiss Alps, throwing the doors of France, Austria, Italy and Scandinavia wide open for fresh and expanded business. The Swiss Stock market was trolleyed on Thursday, shedding 8.7% with the likes of UBS, Credit Suisse, Nestle, Roche, Novartis and Swiss Re losing measurable value. It is just as well that Switzerland has only 8 million people to cater for, rather than 60! The Swiss Franc can surely no longer be considered a safe haven. Since the banking crisis the Swiss authorities seem immensely happy and cooperative to ‘snitch’ on bank depositors, when a decade ago it would be have been considered sacrilege. Now the removal of the peg; hence game, set and match to the CHF!   

 

As if the SNB intervention wasn’t sufficient as a disturbance for one week! Well it clearly wasn’t. We had the oil price issue to try to comprehend. It started the week falling, but rallied on Friday to circa $48 a barrel. Commodity prices bobbed around like a cork in a bath, seriously testing the resolve of mining stock geeks with the likes of Anglo American, Rio, BHP and Glencore losing significant value, let alone Vedanta, Kaz and Antofagasta which were trashed by double digit percentages. There seemed to be some good news for BP shareholders with an announcement that the fine for their Gulf misdemeanour may be capped at $18 billion. However the market chatterboxes seem determined to bed BP down with Exxon. Surely there is no chance at a price BP shareholders would be prepared to see at, despite the fact BP has a substantial business in the US. Off set against this slightly more encouraging news is BP’S tenuous stake in Rosneft, which is unlikely to bring much to the party for the foreseeable future.  

 

The UK’S inflation fell to 0.5% thanks to the fall in oil, rapacious cost cutting by supermarkets around Christmas and a drop in transport costs overall. Many expect inflation to fall to 0.2% in February and any idea of contemplating a rate increase is now on hold until 2016. Retail results were mixed last week with Burberry excelling. However Home Retail disappointed with the outlook for Argos and Home Base disappointing. This week shareholders are expected to approve Aviva’s £5.6 billion takeover of Friends Financial. This week many expect Hutchison Lampoa, spearheaded by the wealth of Li Ka-Shing to make a £10 billion+ bid for Telefonica’s o2.  Also this week will be a key one for the EU. A definitive decision on full-blown QE is unlikely until coiffing champagne in Davos has finished for another year and the result of the Greek General Election on 25th January is known, but hopefully the markets will have a fair idea of what is in store. But for major differences of opinion between Germany and the ECB on the implementation of a £475 billion bond buying programme, the whole deal should have been announced on Thursday. On the same day figures on UK bank lending will be released by the BOE. US earnings will be under a wet sail and their quality will be closely scrutinised.   Certainly last week results posted by JP Morgan, Citibank, BOA and Goldman were on the disappointing side. Regulation and the cost of capital and dangerously volatile markets have stunted growth.  

 

There is good news from the EY Item club to the effect that UK Growth is likely to come in at 2.9% and income inflation should increase by 3.7% in 2015.   

 

UK companies posting results this week – Monday – GREENE KING, RIO TINTO, ALLIANCE PHARMA, THORNTONS, Tuesday – UNILEVER, IG GROUP, WILLIAM HILL, BHP BILITON, Wednesday – PEARSON, PETS-AT-HOME, DIXONS CARPHONE, JD WETHERSPOON, SAB MILLER, GENEL, FIRST GROUP, POUNDLAND, COMPUTACENTER, HALFORDS, WH SMITH, Thursday – CARD FACTORY, ST JAMES’S PLACE, CHEMRING, EMIS, COUNTRYWIDE, PARAGON, ROYAL MAIL, Friday – PREMIER FOODS, CLOSE BROTHERS 

 

US companies posting interim results – Tuesday – DELTA, BAKER HUGHES, HALLIBURTON, MORGAN STANLEY, JOHNSON & JOHNSON, IBM, NETFLIX, Wednesday – AMERICAN EXPRESS, US BANCORP, eBAY, UNITEDHEALTH, Thursday – TRAVELERS, STARBUCKS, Friday – BANK OF NEW YORK MELLON, HONEYWELL, MCDONALD’S, STATE STREET. Next week, APPLE, GOOGLE & MICROSOFT post their interim results  

 

 

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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