TODAY’S FAYRE – Wednesday 11th March 2015


You like safe sounds:

the dogs lapping at their bowls;

the pop of a cork on a bottle of plonk

as your mother cooks;

the Match of the Day theme tune

and Doctor Who-oo-oo.


Safe sounds:

your name called, two happy syllables

from the bottom to the top of the house;

your daft ring tone; the low gargle

of hot water in bubbles. Half asleep

in the drifting boat of your bed,

you like to hear the big trees

sound like the sea instead.


Carol Ann Duffy – poet laureate – 1955-


When it comes to punting at the races, sometime logic and good sense desert you when desperately looking for winners in the most competitive of racing festivals. Such was the case yesterday. It all looked too easy as well as too difficult. So like many other mugs I availed myself of the ‘Four’ Willie Mullins/Ruby Walsh ‘hotpots’ at 14/1. As you probably saw the first three won as they liked, virtually with their ‘heads in their chest pulling a train!’ Just Annie Power to go in the mares’ hurdle – an absolute certainty, looking every bit the part – a very skinny 4/7 ‘jolly.’ Coming to the last ‘Annie Power’ was 4-5 lengths clear virtually ‘pulling double’ and she inexplicably took a liberty with one of Cheltenham’s unforgiving hurdles and took a crashing all – not injured thank God! However I did my dough! It was yet another salutary lesson. Horses are not machines and on reflection it was a really stupid bet!


Rona Fairhead really is and understandably under the cosh. I must be very naïve in my thinking to believe that, however clever you are, so much money could be earned from such a compendium of jobs by a single individual – BBC Trust, HSBC and PepsiCo. That strikes me as too many for even a very senior executive to stay right on top on them all. Blimey! £334k for non-exec director of HSBC North America strikes me as very grown up pay! Something has to give, surely? A leave of absence from HSBC and BBC Trust strikes me as a very sensible course of action.

How wonderful it would be for ‘Sprinter Sacre’ to dash up the hill at Cheltenham to regain the Queen Mother Chase crown, having been off for a year! Nick Henderson’s charge is certainly the best two-mile chaser I have even seen. In the event of that happening the roof would come off the gandstand and there would not be a dry eye in the house!


Ever since the S&P, the DOW and the FTSE 100 broke record ground a couple of weeks ago, equities geeks have lacked conviction to trigger another quantum leap forward. The same geopolitical problems remain unsolved – Ukraine, IS and for the purposes of the UK the uncertainty surrounding May’s General Election.

Today global equity markets are threatened by a very strong Dollar, and an inevitable hike in US interest rates in the fall (if Mrs Yellen’s tea leaves have been interpreted correctly), exacerbated by wage inflation. However most important of all suspect corporate earnings for the second half of the year have taken their toll. Add declining growth in China plus lower commodity and oil prices and a challenging cocktail of uncertainty suddenly appears over the horizon.  This morning we received news from China that retail sales only grew 10.7% in February, when nearer 15% was expected. Factory production rose only 6.8 percent in the two-month period from a year earlier, the National Bureau of Statistics said in Beijing compared with the median projection for 7.7 percent in a Bloomberg survey. And then of course there is the EU – What a hopeless mess! The negotiations with Greece can only be described as a ‘Fred Karno’ production – a music hall production with custard pies thrown in for good measure!

The net result yesterday to all these imponderables saw traders and market makers put equities to the sword figuratively speaking. The fall in many stock prices was visceral. There is little point in going through the litany of stocks and sectors that suffered. Needless to say the 3.5% fall in crude oil damaged BP, Shell and BG, but it was Tullow that suffered the largest percentage fall of 7%. Life may not improve today with another dry well being identified. There was also news of an Indian tax finding against Cairn Energy, which may see its shares fall very sharply.

As for mining it was Antofagasta that won the ‘yellow jersey’ for the day – down 10%! Even banks were friendless in the ring as were supermarkets, despite improved sales at Tesco – up 1.1% for the first 3 months of Tesco’s calendar year. After an initial 2% rally, Tesco’s guns were spiked by falling sentiment. It was good to see encouraging numbers from G4S and Ocado – the share prices for both remaining above the Plimsoll line yesterday. The FTSE ended the session down 2.53% – down 173 points at 6702 – 274 points from its recent record.

In fairness the FTSE and other European markets took their lead from the Street of Dreams. US futures turned their back on the three main markets, indicating an initial fall of 150 points on the DOW. That proved to be very conservative. It ended up as a mini blood bath on the Street of Dreams with financials and tech stocks suffering the most. The DOW lost 1.85%, the S&P 500 1.70% and the NASDAQ 1.67%. Even Apple fell 2.07% despite the qualified enthusiasm over the introduction of its ‘all singing and dancing’ watch!

BOE Governor Carney is giving due to CUTTING interest rates, there being every sign that inflation will go to zero. This will make him very popular with the electorate, but it will be that much more difficult weaning people back in to commercial reality. After all the furore over PPI Lloyds Banking Group having paid back £11.5 billion to customers there is STILL evidence of aggressive selling by staff, encouraged by some management. The Black Horse is struggling to get back on to the straight and narrow with its customers, though Lloyds is being very transparent about the issue.

Finally good news for George Osborne ahead of next week’s budget – the British Chamber of Commerce has raised its growth target for 2015 from 2.6% to 2.7%. This is interesting as the rest of Europe looks to be in less robust health and concerns about corporate earnings is gathering momentum. At least the FTSE 100 companies will benefit from a strong Dollar with 60% of earnings emanating from the greenback. It also appears that UK borrowing may fall according to PWC.


In closing I have to say this pull back does not yet feel like a genuine bear market, but I could be oh so wrong!


UK companies posting results this week – Wednesday – MICHAEL PAGE, HIKMA PHARMACEUTICALS, FOXTON’S, Thursday – WM MORRISON, CINEWORLD



   US companies posting interim results – Wednesday – KRISPY KREME, ZOE’S KITCHEN, Thursday – MEN’S WEARHOUSE, REVLON, AEROPOSTALE


David Buik – market commentator


Panmure Gordon & Co


+44 (0)20 7886 2775 – mobile – 07788 144 877

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


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