TODAY’S FAYRE

TODAY’S FAYRE – Tuesday 17th March 2015

 

“Once on a time, the ancient legends tell,

Truth, rising from the bottom of her well,

Looked on the world, but, hearing how it lied,

Returned to her seclusion horrified.

There she abode, so conscious of her worth,

Not even Pilate’s Question called her forth,

Nor Galileo, kneeling to deny

The Laws that hold our Planet ‘neath the sky.

Meantime, her kindlier sister, whom men call

Fiction, did all her work and more than all,

With so much zeal, devotion, tact, and care,

That no one noticed Truth was otherwhere.

Then came a War when, bombed and gassed and mined,

Truth rose once more, perforce, to meet mankind,

And through the dust and glare and wreck of things,

Beheld a phantom on unbalanced wings,

Reeling and groping, dazed, dishevelled, dumb,

But semaphoring direr deeds to come.

Truth hailed and bade her stand; the quavering shade

Clung to her knees and babbled,

“Sister, aid! I am–I was–thy Deputy, and men

Besought me for my useful tongue or pen

To gloss their gentle deeds, and I complied,

And they, and thy demands, were satisfied.

But this–” she pointed o’er the blistered plain,

Where men as Gods and devils wrought amain–

“This is beyond me! Take thy work again.”

 

Rudyard Kipling – poet – 1865-1936

 

Having just about digested the fairy tale Gold Cup win by ‘Coneygree’, next year’s race is as about as mouth-watering as one could get. In hindsight the Bradstocks were so right to run ‘Coneygree’, despite the fact he was a novice, as there are only two certs in life – rent day and death! Also they knew the Oaksey-bred gelding was better and more mature as an 8-year old, than many of us did! The Bradstocks were not discouraged by the fact that ‘Coneygree’ had only come under orders in a chase four times. Look at the pretenders to the crown next year – ‘Don Poli’, ‘Vautour’ ‘Djakadam’ and ‘Road to Riches’ to name but a few! It’s a brave man that can pick next year’s winner.

 

I must confess that if logic ever played a leading role in trading equities, who knows how markets would behave. From where I sit the outlook for the EU’s economy looks decidedly wonky, yet last week’s introduction of QE by the ECB’S Mario Draghi has set a fuse under many indices, with yesterday the DAX adding over 2%, the CAC 1%+ and the FTSE 100 0.9%. I suppose it is imperative to remember that 30 and 40 stocks in the DAX and CAC are not barometers of the EU’S economy. There are many international stocks in those indices and with a falling Euro and zero interest rates guaranteed for an indeterminate length of time – so provided the US continues to perform and Asia plays its role, it could be money for old rope!

 

Factory orders for February in US posted yesterday left a little bit to be desired. However the stock market’s reaction was positive, as there was a feeling that June’s forecasted hike in rates may be premature. We shall no more about how Janet Yellen’s committee feels at the end of this week’s two day meeting! The Street of Dreams purred like a Cheshire Cat with the DOW ending the session +1.29%, with the S&P 500 grabbing 1.35% and the NASDAQ 1.19%. There were gains across the board. It was interesting to see another health titan looking to break up its portfolio. Proctor & Gamble may look to hive off Beauty Brands.

 

As for Greece, you’d cry if the situation wasn’t laughable. Greece is like a wasp caught by a tiresome child in a jam-jar unable to access bailout funding and locked out of capital markets. Tsipras is off ‘hot-foot’ to see Merkel soon, hoping to outline his government’s emergency plans to increase funding. Payments are due March 20 and they include interest on a swap originally arranged by Goldman Sachs Group Inc. It looks as though Greece will, for the time being have to rob some of its departments for whatever spare cash might be lying around to meet some payment dates. Frankly if the EU wants Greece to remain a member, it must just swallow, as Greece cannot either repay debt in a meaningful way or service it. What do people expect from a country of 11 million people with little industry and commerce? Blood! It is rumoured that Italy will help them negotiate terms with the EU and IMF. It won’t make a scrap of difference.

 

I will leave the Budget until tomorrow. Suffice to say that shares in BP and Shell have rallied measurably this morning. I have no idea if the market is expecting a bonanza in terms of tax relief for oil companies, with revenues having dropped from £10.8 billion 3 years ago to £4.8 billion last year. Capital expenditure is parsimonious and with oil at less than $50 a barrel, expecting oil companies to increase its commitment may be folly.

 

Asia had a mixed trading session with Japan dining out on stimulus packages – closed +0.99%. The hang Seng was down 0.2% at lunctime.

 

There were a slew of earnings this morning with Sainsbury’s trading statement grabbing most of the interest. Sales for the 4th quarter – down 1.9% less fuel were slightly less awful than expected. CEO Mike Coupe seems up for the challenge having spearheaded over 1100 price cuts. The market was quite impressed and shares, after a strong rally yesterday, cracked on by another 1.3%. Antofagasta’ copper output problems going forward saw its shares lighten up by 2%. French Connection posted another dire set of numbers – revenues down 8.9% with sales down 6% – shares down 9.8% at the opening. Just Eat saw revenues up 62% with over 8 million customers connected to its service which has access to 45000 takeaway restaurants.

 

UK companies posting results today – J SAINSBURY, FRENCH CONNECTION, ANTOFAGASTA, GEM DIAMOINDS, REGENERSIS, JUST EAT, IG, WANDisco 

 US companies posting interim results – ORACLE & ADOBE SYSTEMS

 

David Buik – market commentator

 

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

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

 

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