TODAY’S FAYRE – Wednesday 1st July 2015


 Good-night? ah! no; the hour is ill
Which severs those it should unite;
Let us remain together still,
Then it will be good night.

How can I call the lone night good,
Though thy sweet wishes wing its flight?
Be it not said, thought, understood —
Then it will be — good night.

To hearts which near each other move
From evening close to morning light,
The night is good; because, my love,
They never say good-night.                          


Percy Bysshe Shelley – poet – 1792-1822


It is good news that finally a decision has been made to expand one of the UK’s largest airports – HEATHROW was recommended by Sir Howard Davies’s Commission – which make sense because of ‘Crossrail.’ The Commission felt that the investment in the Heathrow project could contribute £147 billion to the economy by 2050 and create 70,000 jobs. However how appalling that London will have to wait 10-years before it is finally in use. In Germany it would have been finished 2 years ago. A sensible consultation period is surely the correct procedure. Then a decision must be made and we should get on with it, however painful it might be for some, who will get compensation for having to move. I live under the flight path. I hardly notice it now. In passing the Commission also said that Gatwick had merits.


So the deadline came and went as we all expected it would. Greece failed to step up to the plate and pay its dues – E1.6 billion to the IMF – and had the temerity to ask a for a 2 year extension on its bail-out facilities, which not surprisingly the EU flatly refused! There may be another offer on the table later today from the EU. In passing this failure by Greece to repay the IMF is the first technical default the IMF has experienced in its 71 year history.


Enter stage-left FITCH, the rating agency, almost on cue, as a reincarnated Uriah Heep from ‘David Copperfield’, ever so humbly downgrading Greece below junk status to default status. So here we are again in a right political and financial pickle. We await the outcome of Sunday’s referendum in Greece, which will almost certainly see the demise of Tsipras and Varoufakis, whatever the outcome and the probable election of a government of national unity to see them through the next crisis. Perhaps it is me, but though the Greek people should be accorded the greatest possible sympathy, the Greek PM seems to have behaved recklessly, if not naively in these sensitive negotiations. Anyway, I have been known to have a tilt at the ring; so if a push comes to a shove, a deal will be cobbled out, allowing Greece to reel to its next bail-out requirement. Nothing will fundamentally change. What should happen is GREXIT!


However I am now bored to tears and frustrated by these events. As a result of uncertainty and political incompetence the FTSE yielded 6.6% in June – the biggest monthly fall since May 2011 in terms of percentage and the largest point fall of 463 since pre crisis in 2008. It just goes to show how markets cannot deal with uncertainty. In fairness China’s equity pull-back and the threat of higher rates and frothy valuations in the US have exacerbated the situation. So, dear readers, I have the ‘raving ache’, as much of this turmoil could have been avoided with stronger leadership and greater political foresight.

Yesterday the FTSE lost 99.5 points to 6520. Trading conditions were painfully slow. Everyone enjoyed the debut of the UK’S largest tech IPO – Sophos. The fact that UK GDP in the first quarter was upgraded by 0.1% to 0.4% thanks to better construction activity than was originally thought almost went unnoticed. So did that fact that the UK economy is expected to grow by 2.5% this year and that disposable household income rose on a year-on-year basis by 4.5%. Over the years 1st July has always proved a great trading day. 81% of them have proved positive. The Street of Dreams girded up its loins and broke the recent negative trend with the 3 main indices ending the session just above the Plimsoll line. Shares in Twitter popped 6% towards the close as rumours abounded that Facebook might be running the ruler over its social media competitor to see what synergy an acquisition might bring. There were decent numbers from Greene King and an improved effort from Serco.  The BOE Financial stability Report will be posted by Mark Carney today. Also PMI data from France and Germany last month will be on view this morning. Hong Kong is shut today.  Japan’s Tankan report was better than expected; so the NIKKEI showed some signs of life – up 0.22%.  The Shanghai Composite was calm – down just 0.12% just before lunch.



UK companies posting results – Wednesday – ANITE, SERCO GROUP, GREENE KING, Thursday – PERSIMMON, TOPPS TILES (TS), TULLOW (TS),Friday – MARSHALLS, FERREXPO

US Company results – Wednesday -CONSTELLATION BRANDS, FORD MOTOR (sales), Thursday. – RITE AID CORPORATIONS.

Global economic diary – Wednesday – BOE Financial Stability report – Thursday -US NON-FARM PAYROLLS (+2015k) rate 5.5%, Friday -US INDEPENDENCE DAY NEW YORK markets closed.



David Buik – market commentator


Panmure Gordon & Co




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