TODAY’S FAYRE – Tuesday 21st April 2015

Such, such is Death: no triumph: no defeat:

Only an empty pail, a slate rubbed clean,

A merciful putting away of what has been.

And this we know: Death is not Life, effete,

Life crushed, the broken pail.

We who have seen

So marvellous things know well the end not yet.

Victor and vanquished are a-one in death:

Coward and brave: friend, foe. Ghosts do not say,

“Come, what was your record when you drew breath?”

But a big blot has hid each yesterday

So poor, so manifestly incomplete.

And your bright Promise, withered long and sped,

Is touched, stirs, rises, opens and grows sweet

And blossoms and is you, when you are dead.”


Charles Sorley – soldier & poet – 1895-1915


Gallipoli – 25th April 1915 – ANZAC DAY – RIP


If there is a happier way of spending an evening than watching a production of the Royal Ballet’s ‘La Fille Mal Gardee’, which hasn’t changed one iota since Sir Frederic Ashton used to perform the comical part of the mother fifty years, I have yet to witness it! It is full of innocence, humour, beauty, charm and grace with stunning music composed by Ferdinand Herold. So when it was posted that Carlos Acosta and Marianela Nunez were the principal dancers, any prevarication as whether this ballet should be seen dissipated. Attendees were enraptured! Enchanting!


The country continues to grind its way through this torrid, repetitive and acrid General Election campaign, which is becoming more toxic by the day. Perhaps it is not surprising with so much at stake. Aside from these parochial issues other global market land marks have been reached in recent days – not all of them records, but certainly worthy of note. Firstly after 15 years the NASDAQ has finally eradicated all those horrific losses which were incurred at the turn of the century, when the tech bubble finally burst. The demise of names such as Worldcom, with Bernie Ebbers ending up in the slammer for 25 years and Enron, with Kenneth Lay committing suicide, wiped billion off shareholder value. Tyco’s Dennis Kozlowski also ended up ‘doing bird.’ and its merger with Time Warner cost billions. AT&T, Verizon, Intel and Cisco Systems saw their share prices beaten up. It was one hell of a shake out!’ Well yesterday for many it was a forgotten nightmare. Since the lows of 2000, Amazon, as an example, despite rarely if ever making a profit, has seen its shares rally from $50 to circa $390! Hope springs eternal. The NASDAQ hit a low of 1335 in 2002 and closed at 5056 last night. The opening looks bright today with good results from Amazon (+6.7%), Microsoft (+3.37%) and Google (+3.11%) all ‘popping’ after hours. These followed in the wake of stellar numbers on Wednesday evening from eBay and a questionable effort from Facebook. The NASDAQ is up 22% in the last year and 6.7% since January 2015. It would also be churlish not to say thank you APPLE for its contribution!


The Street of Dreams enjoyed a decent session, buoyed by existing home sales on Wednesday (slightly disappointing effort from New Home sales in March) and a slew of acceptable earnings – P&G, Caterpillar and DOW Chemicals. CAT however was quite negative about the future thanks to a very strong Dollar and large footprints overseas. The regulators put their size 12 hob-nailed boots in the way of a merger between Comcast and Time Warner Cable. This deal looks dead in the water. At the close the DOW was up 0.11%, the S&P 500 by 0.24% and the NASDAQ by 0.41%.


Asian markets have been on fire in recent weeks, with the NIKKEI breaching the 20k threshold for the first time in 15 years. However Chinese stocks have really cracked on, courtesy of stimulus packages – up 36% so far this year and 53% in 2014. Today there was some profit taking with the Shanghai Composite easier by 1.7%.


I understand that there are signs of rapprochement between the EU and Greece. Greek 3 year bond yields fell from 30.5% to 24.87% – whoopee! Call me cynic but I don’t believe a word of it! Greece is bankrupt! Period! Surely ‘hell has a better chance of freezing over’ than Greece complying with the EU and IMF over its debt crisis in Riga at the ECONFIN meeting? Yesterday the FTSE 100 added 25 points at 7053. Tesco recovered a little poise after Wednesday’s clattering. Wm Hill’s results disappointed, but the mitigating circumstances re-tax and some adverse football results in January was a reasonable explanation. In line with Tesco’s cutting staff, Sainsbury find themselves under pressure on costs and served notice to cut 800 jobs. Sir Martin Sorrell was in sparkling form delivering WPP’s trading update, but he stood firmly and diplomatically on the fence over which party he supported at the General Election. I suspect no prizes for guessing!


The BOE minutes surprised many of us in suggesting a rate rise may not be a million miles away. Mind you, the MPC has wound us up before! What a great appointment for Rolls Royce – former ARM CEO Warren East. The market thought it inspirational with shares rallying 3% on Wednesday. Deutsche Bank was duly fined $2.5 billion for Libor manipulation. The bank did not come out of it to well, appearing to have procrastinated in helping the regulators.


The FT’s Jonathan Guthrie’s Lombard column brought a wry smile to my face in mischievously explaining that John McFarlane, the new chairman of Barclays, has written to shareholders setting out his priorities. Let’s call him the new ‘Mac the knife!’ Certainly the current management have been put on notice to deliver or else!


Out of interest, HMT’s shareholding in Lloyds Banking Group has been reduced by another 1%, and is now down to 20.95%. That is now a 4% reduction in the last couple of months via the Trading Plan.


Results will be posted today from ASTRA ZENECA, RECKITT BENCKISER.


US companies posting interim results – Friday – XEROX, AA,


David Buik – market commentator


Panmure Gordon & Co



David Buik

Market Commentator


+44 (0)20 7886 2775

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


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