TODAY’S FAYRE – Tuesday 25th August 2015
“To be, or not to be- that is the question:
Whether ’tis nobler in the mind to suffer
The slings and arrows of outrageous fortune
Or to take arms against a sea of troubles,
And by opposing end them.
To die- to sleep- No more; and by a sleep to say we end
The heartache, and the thousand natural shocks that flesh is heir to.
‘Tis a consummation Devoutly to be wish’d.
To die- to sleep. To sleep- perchance to dream: ay, there’s the rub!
For in that sleep of death what dreams may come
When we have shuffled off this mortal coil, Must give us pause.
There’s the respect That makes calamity of so long life.
For who would bear the whips and scorns of time,
Th’ oppressor’s wrong, the proud man’s contumely,
The pangs of despis’d love, the law’s delay,
The insolence of office, and the spurns
That patient merit of th’ unworthy takes,
When he himself might his quietus make
With a bare bodkin? Who would these fardels bear,
To grunt and sweat under a weary life,
But that the dread of something after death-
The undiscover’d country, from whose bourn
No traveller returns- puzzles the will,
And makes us rather bear those ills we have
Than fly to others that we know not of?
Thus conscience does make cowards of us all, A
nd thus the native hue of resolution
Is sicklied o’er with the pale cast of thought,
And enterprises of great pith and moment
With this regard their currents turn awry
And lose the name of action.- Soft you now! T
he fair Ophelia!- Nymph, in thy orisons
Be all my sins rememb’red.”
RS Thomas – vicar & poet – 1913-2000
How many times in the last 15 years have we been there before! – Never seen anything like it! Not until the next time!…And the next time was yesterday! The DOW falls 6% in the opening six minutes – 1000 points and the NASDAQ by 8% in the early part of the session! What on earth is going on? Then the DOW rallies to close down just 3.58%, which is still pretty horrific. That intraday move was the biggest in Wall Street’s history.
It’s funny how the market is always provided with interesting data after the horse has bolted. It appears that hedge funds have had ‘shorts’ on since July – never saw that! Funny how it always comes out after the event! Also in July apparently exchange traded funds and mutual took $78 billion out of the US market place. So the writing was on the wall, so I have been reliably informed. I was told by Panmure’s Simon French and BGC’S Mike Ingram, but never heard a peep out of Goldman, JPM etc or I missed it! My colleague Paul Modlock made the most telling comment of all yesterday, saying that he was confident that this seismic and vituperative ‘pull-back’ was an overdue, healthy necessary correction, based on the fact that in normal circumstances massive ‘sell-offs’ coincide with recession. There is not a whiff in either nostril. There never has been a recession started by falling oil prices, which is good for the consumer. With Russia and Iran pumping oil out of the ground for all they are worth oil prices could dip mildly lower unless Saudi/OPEC call a halt to their political machinations. Next week when the market deigns to return to work, perhaps we won’t be so reliant on technology, mathematical geeks, and algorithms and programme trading. The human touch could help good sense to prevail.
The stench of fear was rampant in beautiful downtown Manhattan at the opening yesterday; hence the unrealistic downturn, which shook the Street of Dreams to the rafters. Stocks like Netflix lost 6.8%, Facebook 4.6%, Yahoo! 4.9%, Twitter 8.9%, Google 4% and sad news – Alibaba fell below its issue price losing 3.5%. Big cap stocks like Chevron made severe losses – in its case 4.7%. It was a horrible session but it could have been a lot worse. As regards US share valuations the S&P 500 was heading towards 21x earnings – unrealistic in terms of growth and profit forecasts. The S&P closed down3.94% and the NASDAQ has 3.82% of value shaken from its branches.
Yesterday the FTSE lost 4.67% – 288 points down to 5898. Not a hint of blue anywhere. Mining and resources retreated by an average of 7% (Glencore -13% and Anglo American -9.9%), with oils surrendering 5-10% (BP -7%, Premier -14% and Tullow -10%). Banks took some real tap particularly Standard Chartered and HSBC. It felt very uncomfortable and the mood was dreary, hardly surprising after the vituperative treatment that was meted out.
Asia attempted to rally this morning and most bourses made a fair fist in their attempt, with the exception of the Shanghai Composite which fell another 7.06% thanks to deafening silence from the authorities as to stimulus packages. Bloomberg announced that it expected China’s GDP for July to come in at 6.6%. The FTSE is enjoying a tremendous bear squeeze rally this morning – up 2.75% – 162 points to 6061. The DAX similarly is up 2.6% and the CAC 2.9% at 9.30am. In London financials are up between 3.5% and 4.5%, mining between 4-6% and oils 2-3%. Wall Street is expected to rally by 2% plus! Allelujah!
UK companies posting results – Tuesday – BHP BILLITON, REGUS, ANTOFAGASTA, PETROFAC, JAMES FISHER, Wednesday – STAGECOACH, WPP, HSS HIRE, CARILLION, PADDY POWER, ARP ENERGY,, JOHN LAING, CRH, ALDERMORE GROUP Thursday – AMEC, STV GROUP, EVRAZ, PLAYTECH, Friday – RESTAURANT GROUP, 888 HOLDINGS, BWIN PARTY, COMPUTACENTER, MARSHALLS, CHESNARA KENMARE, SOCO INTERNATIONAL.
US companies posting interim results – Tuesday – BEST BUY, TOLL BROTHERS, Wednesday – CHICO’S FAS, BROWN-FORMAN, ABERCROMBIE & FITCH, WILLIAMS SONOMA, Thursday – FRED’S, DOLLAR GENERAL, AEROPOSTALE, SMITH & WESSON, Friday – BIG LOTS.
Economic data – Tuesday – US CONSUMER CONFIDENCE, US NEW HOME SALES, UK BBA MORTGAGE APPLICATIONS, Thursday – US GDP& JOBLESS CLAIMS
David Buik – market commentator
Panmure Gordon & Co