TODAY’S FAYRE

 

TODAY’S FAYRE – Tuesday 5th May 2015

 

”In the licorice fields at Pontefract

My love and I did meet

And many a burdened licorice bush

Was blooming round our feet;

Red hair she had and golden skin,

Her sulky lips were shaped for sin,

Her sturdy legs were flannel-slack’d

The strongest legs in Pontefract.

The light and dangling licorice flowers

Gave off the sweetest smells;

From various black Victorian towers

The Sunday evening bells

Came pealing over dales and hills

And tanneries and silent mills

And lowly streets where country stops A

nd little shuttered corner shops.

She cast her blazing eyes on me A

nd plucked a licorice leaf; I was her captive slave and she

My red-haired robber chief.

Oh love! for love I could not speak, I

t left me winded, wilting, weak,

And held in brown arms strong and bare

And wound with flaming ropes of hair.”

 

 Sir John Betjeman – poet laureate – 1906-1984

 

 Those of us old enough to have seen the 1967 film adaptation of Thomas Hardy’s ‘Far from the Madding Crowd’, which starred Julie Christie, Alan Bates, Peter Finch and Terence Stamp, will remember it with great affection for its acting and artistic content. It was wonderful! Also 48 years on, it is crazy to compare apples with pears.  However Thomas Winterberg’s production was in its own way every bit as enthralling.

 

 Michael Sheen as William Boldwood, Matthias Schoenaerts as Gabriel Oak and Tom Sturridge as Sargent Troy put in very high class and sympathetic performances.  The cinematography in Dorset and Cornwall was of an exceptional calibre. The more I see of Carey Mulligan, the more I believe that she is an outstanding actress of her time. In so many ways she was the quintessential Bathsheba Everdene.  However I think Thomas Hardy might well have preferred her to have been rather less sophisticated and perhaps a little more earthy – more of a Dorset lass. Nonetheless what a memorable film!

 

England’s defeat at the hands of the West Indies in Bridgetown was by any standards an abject performance. Well though the West Indies bowled, with one or two exceptions, England were very average. Moeen Ali bowled badly on a dusty surface and frankly England did not make enough runs. If Andrew Strauss is appointed supremo, he needs to make wholesale changes throughout the side. Is Peter Moores the right coach? Few think so and should Alastair Cook remain as captain? Geoff Boycott expects no radical changes. I hope he is wrong!

 

London was closed yesterday for its May Day Bank Holiday, whereas the rest of Europe took its leave on Friday. There was some poor news posted on China’s PMI on Sunday, which fell below 50 to 48.9 last month. The Asian stock market’s reaction was one of ambivalence as many suspected that the Chinese authorities will just inject further stimulus packages. Yesterday the Street of Dreams posted marginally positive gains on the back of a steady flow of decent earnings and a strong performance from the banking sector. The DOW finished up +0.26%, with the S&P 500 adding 0.29% and the NASDAQ 0.23%. Cisco Systems and Comcast pleased their acolytes with their respective shares rallying by 0.4% and 0.6% respectively.

 

 

McDonald’s new CEO Steve Easterbrook has had the drains up over this underperforming fast food juggernaut, which has 36,000 outlets. News has filtered out that 3,500 outlets will be sold to franchises by 2018. ‘The Golden Arches’ intends to have 90% of its outlets franchised up from the current level of 81%. McDonald’s will be cutting $300 million administrative costs per annum going forward. Sales have been falling; so the kissing has to stop. The public are more sophisticated about their culinary requirements and Easterbook acknowledges that fact. S&P has downgraded the company’s credit rating. Wendy’s and Burger King have also been suffering, resulting in the sale of outlets. I was not wholly surprised to read in the FT that a record $100 billion had been spent on a variety of cancer treatments. This data was posted by the IMS Institute for Healthcare Informatics. The likes of Bristol Myers Squibb, Astra Zeneca, Merck and Roche have been in the vanguard in developing immunotherapy drugs.

 

Though Tokyo remains closed, Chinese markets have taken quite a spanking this morning. Investors have vented their spleen and have taken the Shanghai Composite down by 2.72% and the Hang Seng by 1.26% at the time of writing, in response to that poor manufacturing number posted on Sunday. It is interesting to note that in China since 1978, 278 million have moved from the country in to the cities. This movement has almost certainly brought about falling growth thanks to an ageing population. Reserve Bank of Australia eased interest rates officially down to 2%.

 

This morning I suspect that Sergio Ermotti will be preening himself like a ‘Cheshire Cat’, having announced an 81% increase in pre-tax profits of CHF 2.23 billion. Wealth Management attracted another CHF19 billion of funds to manage and Tier One Capital was a very impressive 13.7%. Spirent posted what amounted to a profits warning. Just Eat saw sales up 47% in the last quarter. Greene King’s sales were up 0.4%, but the market seemed happy with that outcome. We await HSBC’s numbers at 9.15am, which may show a 17% drop in profits, but any guidance on repatriation will be gratefully received. I doubt we shall glean much, but the more I think about it, the more sense it makes for HSBC to head back to HK and to IPO its domestic operation as Midland Bank.

 

UK companies posting results this week –  Wednesday – BOOHOO, GKN, CARILLION, L&G, DIRECT LINE, DAS SMITH, J SAINSBURY, NATIONAL EXPRESS, PRUDENTIAL ASSURANCE, GLAXO SMITHKLINE, Thursday – PROVIDENT FINANCIAL, TELECITY, eSURE GROUP, RSA, TRINITY MIRROR, IMI, BT GROUP, IMPS, WM MORRISON SUPERMARKETS, SAB MILLER Friday – BG GROUP, INTERCONTINENTAL HOTELS GROUP, MAN GROUP, NUMIS, PENDRAGON, ROLLS ROYCE.

 

US companies posting interim results this week – Monday – POEWS, COMCAST, MGM RESORTS, TENET HEALTH, FIDELITY, DENNYS, Tuesday – SPRINT, KELLOGG, WALT DISNEY, Wednesday – WENDY’S, COSTCO, TESLA, METLIFE, Thursday – FRED’S, REVLON, LIBERTY GLOBAL, ZYNGA, Friday – MCDONALD’S, AOL GROUP.

 

Economic data – Friday – US NON-FARM PAYROLLS

 

 

David Buik – market commentator

 

Panmure Gordon & Co

 

 

David Buik

Market Commentator

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