TODAY’S FAYRE – Wednesday 22nd April 2015
“Little did I dream, England, that you bore me Under the
Cotswold Rills beside the water meadows
To do you dreadful service, here, beyond your borders
And your enfolding seas. I was a dreamer ever, and bound to your dear service
Meditating deep, I thought on your secret beauty,
As through a child’s face one may see the clear spirit Miraculously shining.
Your hills not only hills, but friends of mine and kindly
Your tiny knolls and orchards hidden beside the river
Muddy and strongly flowing, with shy and tiny streamlets Safe in its bosom.
Now these are memories only, and your skies and rushy sky-pools F
ragile mirrors easily broken by moving airs;
But deep in my heart for ever goes on your daily being And uses consecrate.
Think on me too, O Mother, who wrest my soul to serve you
In strange and fearful ways beyond your encircling waters;
None but you can know my heart, its tears and sacrifice,
None, but you, repay.”
Ivor Gurney – soldier & poet – 1890-1977
“In general, the art of government consists of taking as much money as possible from one class of citizens to give to another.” – Voltaire – author & historian – 1694-1778
Looking at the way the FTSE has performed in the last few weeks, it looks as though an inconclusive result is already priced in. A Tory/Lib-Dem coalition could see markets crack on. An ineffective Labour/SNP coalition could be unattractive, dependent on how strong it was, as incentives for business could easily dissipate, which would severely damage growth prospects. However it should not be forgotten that 70% of earnings are Dollar related and the current value of most indices is down very largely to Central bank intervention.
From a business perspective it is so frustrating that the Government has failed to deal with social mobility, due to inaccessible house prices and also to incomes, which have had to be harnessed to improve employment levels. Employment in the UK is at its highest since 2007. In the 1980s Lady Thatcher had the ability to appeal to middle-class voters with cuts in income tax from 83% to 40%, before the property market went off the Richter scale. Those conditions don’t exist today. People seem to have stopped aspiring. They should try and be patient with government help. On achievement the Conservatives should have a 10% lead, but people have given up hope of getting on the “achievement ladder!” So the result of the General Election remains inexplicably to many in the balance. However if life is dreary and offers little hope, a guy like Miliband, whispering sweet nothings in your ear, Well to them it cannot be worse!
Today is all about Tesco! However there were three other nuggets of information worthy commenting about. As the hours and the days roll by, the crisis becomes more of nonsense – such embarrassing inertia to behold. Consequently Greek banks are almost without value – In the past year shares in National Bank of Greece and the Piraeus Bank have fallen from €4.50 and €1.85 respectively to €1.04 and €0.2 respectively yesterday. Both fell 9% in value. Russian GDP dropping by 2% in the first quarter comes as no surprise and frankly matters could get worse, unless Putin comes back on the bridle over Ukraine – Pigs have wings!
How about this comedian Mr Navinder Singh Sarao from Hounslow, having supposedly taken $40 million out of the ring between 2010 and 2014? He apparently had access to some very sophisticated heath-Robinson contraption software, obviously built to specification by some software company with the capability of infiltrating international futures markets and at the same time being able put trades on and withdraw them without being executed. This is some smart cookie. Apparently companies such as GE and Accenture in 2010 traded at just 1% of their real value during the flash crash. What I want to know is which took his orders in dealing through the CME? Was due diligence done in accepting this business. Mr Sarao response to enquiries from the CME was a little intemperate – “kiss my ass!” Presumably he will be extradited and perhaps an overnight bag will suffice, if he is found guilty! There will be plenty of orange jump suits available in the years to come!
Ladbrokes disappointed with their numbers; Reed Elsevier was in line and Travis Perkins pleased their acolytes.
“Dear Tesco, every Lidl helps. Aldi best.”
Well I’ve heard of ‘Kitchen-Sinking’ but Tesco’s CEO Dave Lewis presentation of last year’s results was the personification of this terminology. Open the cupboard empty all the skeletons out, by writing-off everything that looks bad; Cut the valuation of the property portfolio and start again. We knew a loss of £5 billion was on the cards but a LOSS of £6.38 billion and net £5.74 billion for the last year was a little richer than many had bargained for! Group trading profit was down from £3 billion to £1.39 billion. Sales fell by 1.3% using a constant exchange rate, but have improved in the past quarter. The Property portfolio valuation has fallen by £7.6 billion to £22.9 billion. What the market likes is Lewis’s transparency. He is trusted and confidence in the business is expected to slowly improve. The shares were down 0.5% at 233p at 10.00am having been u 1.5% at the opening.
In closing the NIKKEI closed above 20,000 for the first time in 15 years.
This week’s UK results – Thursday – ANGLO-AMERICAN (TS), WILLIAM HILL, TAYLOR WIMPEY (TS), MEGGITT (TS), Friday – ASTRA ZENECA, RECKITT BENCKISER.
US companies posting interim results – Tuesday – VERIZON, HARLEY-DAVIDON, BAKER HUGHES, LOCKHEED MARTIN, OMNICOM, KIMBERLEY CLARK, AMGEN, YAHOO!, YUM BRANDS!, Wednesday – CITIZENS BANK, COCA-COLA, MCDONALD’S, BOEING, TEXAS INSTRUMENTS, AT&T, FACEBOOK, Thursday GM, PROCTOR & GAMBLE, RAYTHEON, CATERPILLAR, HERSHEY, ABBVIE, NASDAQ, PULTE, PEPSICO, GOOGLE, CHUBB, AMAZON, MICROSOFT, NEWMONT MINING, FREEPORT MCMORAN, Friday – XEROX, AA,
David Buik – market commentator
Panmure Gordon & Co