TODAY’S FAYRE – Thursday 9th July 2015


Lo! I must tell a tale of chivalry;

For large white plumes are dancing in mine eye.

Not like the formal crest of latter days:

But bending in a thousand graceful ways;

So graceful, that it seems no mortal hand,

Oe’en the touch of Archimago’s wand,

Could charm them into such an attitude.

We must think rather, that in playful mood,

Some mountain breeze had turned its chief delight,

To show this wonder of its gentle might.

Lo! I must tell a tale of chivalry;

For while I muse, the lance points slantingly

Athwart the morning air: some lady sweet,

Who cannot feel for cold her tender feet,

From the worn top of some old battlement

Hails it with tears, her stout defender sent:

And from her own pure self no joy dissembling,

Wraps round her ample robe with happy trembling.

Sometimes, when the good Knight his rest would take,

It is reflected, clearly, in a lake,

With the young ashen boughs, ’gainst which it rests,

And th’ half seen mossiness of linnets’ nests.”


John Keats – poet – 1795-1821


The Budget preoccupied most of yesterday; so I had to rely on highlights programme for first day of the Cardiff test match. ROOOOOOT! Brilliant! What struck me most was the fact that Mitchell Johnson is nothing like the ‘tour de force’ he is on a rock hard surface, when bowling on a relatively slow pitch with little bounce. Great recovery by England’s batting, after a disastrous start. Ian Bell looking very short of confidence. He needs a ‘biggy’ in the second innings as Bairstow and Taylor wait in the wings!


Once the shackles of a coalition government were shaken off, Chancellor George Osborne presented the first Tory Budget for 19 years with verve, gusto and confidence. It was a really powerful performance and I thought it a decent budget on the whole – better for business than the CBI’s John Cridland did. Improved personal tax allowances, investment of £200k per annum with tax efficiencies, Corporation tax eventually falling to 18%. An increased apprenticeship scheme as well as improved university loans.


I greatly enjoyed the Northern Power initiative under the stewardship of Lord Jim O’Neill. I am hopefully that it won’t be a toothless tiger with hollow rhetoric – full of sound and fury signifying nothing! I have every confidence that Lord O’Neill will be an inspiration.


Few will be sure how positive the living wage improvement will be against cuts in Welfare and tax credits. In passing IDS and Frank Field spent years having the drains up over welfare. Both are very decent people, but the necessary changes have been poorly articulated to date, suggesting that the vulnerable are being clobbered! This is not the case! Also the mortgage relief tax cut for buy to let houses may hurt a few people. We had to look in to the small print for asset sales – the plans there were for the sale of the balance of Lloyds and a chunk (79%) of RBS as well as the Royal Mail and the toxic assets of Bradford & Bingley and Northern Rock. I had also hoped that MOD land would be up for sale to stimulate house building. I was glad that the bank levy was only going to be calculated on UK business and that it would eventually be replaced with an 8% surcharge on profits. Increasing tax insurance premiums by 9% I thought was harsh. There is also little doubt that the minimum wage could damage supermarkets and retailers.



Greece has asked for a three year loan agreement. Tsipras attended a session of the EU Parliament yesterday. I think he will have been left in no doubt how irritated members were by Greece’s intransigent stance to negotiations, apart from Nigel Farage, who was at full throttle, goading Tsipras to give up the unequal struggle and GREXIT much to the chagrin of Donald Tusk and the former Belgian PM, whom I have never heard off treating the UKIP leader and his so called ‘RIGHT WING’ followers with contempt. Greece has until Sunday to submit an acceptable plan or it is the road to GREXIT on Monday morning. I am of the opinion that GREXIT is what Tsipras wants despite violent official protestations to the contrary. It really is crunch time for the EU. Spain’s Rajoy will almost certainly lose the Spanish election in November. Spain has had enough austerity! Contagion for the region is a real possibility – tin hats to the fore!


I was pleasantly surprised how kind the press were to ‘Saint Antony Jenkins’ as Standard’s Nick Goodway referred to him as. Yes, Barclays’ share price had recovered substantially since his appointment in 2012, but from a very trashed position caused by BOE/FSA/Government insisting on the ‘hosing’ of Bob Diamond as CEO – the man who controversially had made most of the profits for the Bald Eagle for the past decade. Ironic that Exec-Chairman John McFarlane should in ‘open forum’ state that he was unimpressed by the 350 odd committees and the general management style with little appetite for investment banking, which the former ANZ chief is a fan of! McFarlane will assume CEO status until a successor is found. When he is identified will McFarlane be prepared to be chairman rather than meddle in to day to day affairs? The problem with Mr Jenkins and part of the cause of his demise is that he did not appear to have friends in high places.


New York had a bad session exasperated by a tech glitch, which closed the NYSE for 3 hours. The DOW’s colours were lowered by 1.47%, the S&P 500 by 1.61% and the NASDAQ by 1.75%. Sentiment was poor due to Greece, China stock market meltdown and a feeling the growth in the US may not be sustainable. Japan’s NIKKEI closed down 1% today and towards the close Shanghai Composite was up close to 5%, obviously responding to the Chinese Banking Regulators supporting the stability of Capital markets, despite rules implemented preventing 5%+ stakeholders in companies from selling! – Rather a retrograde step, I felt.


There were good performances from AB Foods (+1.25%0, Dunelm (+1%), SuperGroup (+5%), Premier Oil (+3%) and Barratt Development (+2.2%) today and a profits warning from Balfour Beatty down 7.8%.


US companies posting results – Thursday – GAP, FRED’S, WALGREEN BOOTS ALLIANCE, PEPSICO and PRICESMART.



Economics – Thursday – MPC MEETING



David Buik – market commentator


Panmure Gordon & Co


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