TODAY’S FAYRE

TODAY’S FAYRE – Monday 17th August 2015

 

“It seems wrong that out of this bird,

Black, bold, a suggestion of dark

Places about it, there yet should come

Such rich music, as though the notes’

Ore were changed to a rare metal

At one touch of that bright bill.

 

You have heard it often, alone at your desk

In a green April, your mind drawn

Away from its work by sweet disturbance

Of the mild evening outside your room.

 

A slow singer, but loading each phrase

With history’s overtones, love, joy

And grief learned by his dark tribe

In other orchards and passed on

Instinctively as they are now,

But fresh always with new tears.”

 

RS Thomas – vicar & poet – 1913-2000

 

When one considers the billions of Pounds consumers shell out to mobile operators annually, you’d think these companies might respond by improving their service in the sticks with a few masts and boosters. It’s astonishing that in the outlying countryside huge areas have appalling reception if any at all – Wales, East Midlands, Wiltshire, Gloucestershire, Devon and Cornwall for openers! This is the 21st century and the variable service must severely damage, business and education! Sharpen up!

 

What’s happened to Labour in recent weeks only goes to show what a disorganised eclectic party it is! Their total inability to communicate with society across the spectrum for the past 6 years has triggered a dichotomy of fragmented support, which could destroy its election prospects for 20 years. On a personal basis politically I am delighted. But for the country to have a weak opposition is not good news for democracy. The Lib-Dems, were they not led by Tim Farron would have had a great chance of recovery.

 

If Jeremy Corbyn was to win the leadership contest, could we witness the establishment of a new ‘Social-Democrat’ party such as Messrs Jenkins, Owen, Williams and Rodgers established in 1981? It appears that there is little common ground for Cooper, Kendall and Burnham to stand united with Jeremy Corbyn. Gordon Brown came to the rescue yesterday with a fifty minute diatribe, following Blair, Mandelson and Johnson exhortations, imploring party members to think again. I suspect these cries from the wilderness fell on deaf ears. Will Corbyn be elected by disenchanted young intellects or is this just a nightmare or temporary aberration, before Labour wakes up and smells the coffee? Whatever happens, Labour will be forced to lean ‘left.’

 

The tube was empty this morning, allowing me to get a seat at 7.00am (late) – unheard of in my living memory. I accept the need for family holidays, but sometimes I feel business is too chilled out, with technology be accepted a suitable alternative to eye-ball to eye-ball contact!

 

As the earning season starts to draw to a close, many investors will be concerning themselves with UK inflation data, due out tomorrow and the content of the FED’s minutes on Wednesday, not for one moment forgetting the cumuli-clouds which hang over the respective economies of China and Japan. UK Inflation is likely to come in at zero. The fall in commodity prices and oil plus the strength of Sterling may force the BOE to come back on the bridle before officially signalling any rate rise. Jan/Feb 2016 is the best guess. Refer to Panmure’s chief economist, Simon French for his illuminating comments, which he has updated today and will comment on tomorrow’s postings for a grown-up appraisal.

 

So far so good with the Greek ‘bail-out.’ Through the Greek parliament, through in Brussels and Merkel should get the ‘bail-out’ through on Wednesday in Berlin, unless the issues with Lagarde and the IMF are not satisfactorily addressed and resolved. I have no idea how Lagarde backs down from the IMF’s insistence on ‘hair-cuts’ being obligatory, but Merkel seems confident. Watch this space.

 

Equity markets feel anaemic this morning in Europe. There is real worry about China and Japan for differing reasons. With China many investors are confident that the Chinese authorities are NOT on top of their game. Throwing the kitchen sink at the problem is one thing, but when China is almost certainly being economical with the truth over growth, confidence tends to understandably dissipate. The hereto positive economic cycle feels as if it could come off the rails. As for Japan, markets seemed somewhat chilled out to the fact that GDP fell by 0.4% in the last quarter and on annualised basis by 1.6% rather than 1.8%. In terms of the 1st quarter on an annualised basis it was adjusted from +3.9% to +4.5%. However Japan has had QE in place for 2 years and the government is a million miles away from posting 2% inflation. I have said a hundred times and I’ll say it again. 125 million live on the South and East coast of Japan in tiny dwellings (80% of Japan is mountainous); so there is a limit as to how much consumer spending on a domestic basis the Japanese people can realistically spend. With respect I think ‘Abenomics’ is gobbledygook! Others are beginning to think the same!

 

At 9.30am the FTSE 100 is down 21 points at 6541, when a bright opening was expected. There is no appetite for risk – China, falling oil and commodity prices rule OK! In Asia the NIKKEI closed up 0.29%, but China’s Shanghai Composite and the Hang Seng were below the Plimsoll line by 0.6% and 0.7% respectively towards the close.

 

UK company posting results – Monday – BOVIS HOMES, CLARKSON, Tuesday – CAIRN ENERGY, PERSIMMON, JOHN WOOD GROUP,H&T GROUP, Wednesday – HIKMA, ADMIRAL, GLENCORE, IMPS (TS),  Thursday – WH SMITH, RANK, PREMIER OIL, KAZ MINERALS

U.S. Companies posting interim results this week – Monday – URBAN OUTFITTERS, Tuesday – DICK’S SPORTING GOODS, TJX, WAL-MART, Wednesday – TARGET, Thursday – SEARS HOLDINGS, GAP, HEWLETT-PACKARD, ROSS STORES

 

Economic data – Monday – EU BALANCE OF TRADE, Tuesday – UK PPI & CPI, HOUSING STARTS, Wednesday – US CPI & PPI, US MBA MORTGAGE APPLICATIONS, FED MINUTES, Thursday – UK RETAIL SALES CBI INDUSTRIAL TRENDS, US INITIAL JOBLESS CLAIMS, Friday – UK PUBLIC SECTOR FINANCES.

 

 

David Buik – market commentator

 

Panmure Gordon & Co

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