TODAY’S FAYRE – Wednesday 1st April 2015

Now, youth, the hour of thy dread passion comes;

Thy lovely things must all be laid away;

And thou, as others, must face the riven day

Unstirred by rattle of the rolling drums Or bugles’ strident cry.


When mere noise numbs The sense of being, the sick soul doth sway,

Remember thy great craft’s honour, that they may say

Nothing in shame of poets.

Then the crumbs Of praise the little versemen joyed to take

Shall be forgotten; then they must know we are,


For all our skill in words, equal in might

And strong of mettle as those we honoured.

Make The name of poet terrible in just war,

And like a crown of honour upon the fight.”


Ivor Gurney – soldier & poet – 1890-1918


Few of you are old enough to remember the film ‘Inherit the Wind’ back in 1960, starring Spencer Tracy and Frederic March.  It tells the story of the celebrated defence lawyer Clarence Darrow in court defending an Afro-American man, charged with murder.  The adaptation of this extraordinary advocate, who prevented 102 people from being hanged, into a play – ‘Clarence Darrow’, with Darrow being portrayed by Spacey, is a work of art.


After 10 highly successful years as artistic director and lead actor at The Old Vic, what a production to end such a successful tenure! Spacey keeps you hooked throughout, and Darrow’s passion for justice tempered with mercy, and his sheer humanity, become increasingly moving as the show progresses. As well as the Scopes Monkey case, the play covers the “killing for kicks” trial of Leopold and Loeb, and the Ossian Sweet case in which Darrow persuaded an all-white jury not to convict a black man accused of killing whites. No doubt Spacey will return to Hollywood to fill up his depleted ‘coffers’ with largesse made from fantastic TV series such as ‘The House of Cards.’ This is an amazing virtuoso one man diatribe and it is utterly brilliant!


That was a very strong and powerful list of 100 business leaders in the papers this morning, expressing their fears and concerns at the prospect of a Labour Administration on 8th May – majority or minority. Without attempting to sound patronising, voters must understand that a strong incentivised business community and its employees pay a HUGE AMOUNT OF TAX and must continue to be encouraged to do so, to pay for our much needed public services – NHS, schools, police etc. Failure to understand this very simple fact will just exacerbate the acute need for funds. To those at the lower end of the earnings spectrum, they will be unsympathetic to these observations. Trust me, I may not be right about many issues, this one is a ‘nailed-on-certainty!’


Well we certainly had a really frenetic first quarter, with records on equities being nudged in the US, smashed in Europe and eclipsed in the UK. However markets did not go in a straight line from January 1st! – far from it – The graph movement seemed to illustrate a journey by a cork in a bath! Investors have had so much to contend with – oil, Putin, IS, China, earnings, the ‘whips and scorns of time’ within the EU and parochially an inconclusive General Election. So what of progress – The S&P added a parsimonious 0.4% in the last quarter, the FTSE 100 3.1%, Japan 9.6%, the Shanghai Composite 11.8%, India ‘Nifty 50’ 2.5% and European stocks an average 16%. It is those indices with QE poked sharply up their back sides that have made the most gains.


The fact that the UK is by a long chalk the most productive economy in Europe, endorsed by GDP for 2014 being raised from 2.6% to 2.8% was met more or less with the shrug of the shoulders – truly unrealistic. This country is attempting to recover strongly. What has happened in Swindon, courtesy of Honda, is truly great news. Yet, all we get is political claptrap from the prophets of doom! I keep coming back to Baroness Thatcher’s comments – my personal icon – to whom professionally, I owe everything – “The problem with socialism is that eventually you run out of other people’s money to spend.”


Yesterday despite signs of a consumer confidence renaissance in the US, the Street of Dreams was out of sorts with all three markets easing by an average of just over 1%. Energy and mining sectors were on the back foot, as they were in the UK, causing the FTSE 100 to lose 118 points yesterday to 6773. Also tobacco stocks lost an average of 3% thanks to the US regulators putting the kibosh on the merger between Reynolds American and Lorillard. Kingfisher acolytes saw some blood running down Threadneedle Street once Veronique Laury, the new CEO served notice to close 60 B&Q outlets – shares up 4.3%. Yesterday Shawbrook, another new challenger bank priced its initial public offering (IPO) at 290 pence per share to value the challenger bank at £725m. The price is near the top end of its 255 to 305 pence range and will raise £90m through the sale of 75m shares. Richard Pyman, chief executive, said he was “delighted” by the investor response. The shares opened very positively this morning reaching 303p at 9.15am. At 9.30am UK post some PMI data.


This morning the Hang Seng and the Shanghai Composite responded very strongly to intervention by Chinese regulators towards bank deposit insurance with some lending stimulation. The Hang Seng closed +0.73% and the Shanghai Composite +1.2%.


In closing I am not remotely surprised that Rory Cullinan, Head of investment banking at RBS, its eighth leader since the beginning of 2013 when John Hourican left post the LIBOR scandal, served notice to leave. Despite being congratulated by Ross McEwan on his achievements in cutting toxic debt by £37 billion, what is the point in staying when RBS has no appetite for investment banking? Employees will drop from 18k to 4k and capital employed down from £107 billion to £25 billion in 2017.


This week’s UK results – Thursday – M&S (TS), DUNELM, BOOKER GROUP, TATE & LYLE

ECONOMIC DATA – Thursday – Non-Farm Payrolls

US companies posting interim results – Friday – RITE AID, MICRON TECHNOLOGIES


David Buik – market commentator


Panmure Gordon & Co

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