TODAY’S FAYRE – Wednesday, 23rd September 2015
“In autumn moonlight, when the white air wan
Is fragrant in the wake of summer hence,
‘Tis sweet to sit entranced, and muse thereon
In melancholy and godlike indolence:
When the proud spirit, lull’d by mortal prime
To fond pretence of immortality,
Vieweth all moments from the birth of time,
All things whate’er have been or yet shall be.
And like the garden, where the year is spent,
The ruin of old life is full of yearning,
Mingling poetic rapture of lament
With flowers and sunshine of spring’s sure returning;
Only in visions of the white air wan
By godlike fancy seized and dwelt upon.”
Robert Bridges – poet laureate – 1844-1930
They say that revenge is a dish best served up cold! Many a true word spoken in jest, but the rather grubby and caustic revelations published in the Ashcroft and Oakeshott book ‘Call Me Dave” is a classic example of how not to ‘cross’ an influential person unless you have every angle covered. Frankly the idea – true or false – of a tax exile over many years, holding high office in the UK, is at best remote. It looks as though the PM will rue the day he and Lord Hague ever accepted donations totalling £8 million for the Conservative party. This is a ghastly, trite, nasty and contemptable book, which I won’t be reading and normally I am a mug for political books. However I am sure the rejuvenated young members of the Labour party will have an insatiable appetite for its content.
There was plenty of comment from BT’s Gavin Patterson on the company’s plans for improving broadband in the future in the hope of escaping from the pressures to break up the company. Considering the amount on money consumers pay for mobile and internet reception, may I be bold enough to say that, outside metropolitan areas, the reception and service is pretty poor. All telecom operators need to sharpen up. These facilities are essential for the furtherance of business and education. Maybe the government is preventing booster masts from being introduced to improve the overall quality of service. All I know is that the service is patchy at best. This is 2015 and not 1950!
Yesterday equity markets felt like the aftermath of a mediaeval battle – total carnage. Though Asia, excluding Japan, which continues to be closed for public holidays, in isolation did not suffer too badly, investors in London vented their spleen on both FTSE 100 and 250, thanks to issues highlighted by BHP’s future requirements, the price of copper falling (20% in recent weeks) and UBS downgrading the mining sector. Consequently the mining sector was put to the sword, yet again, with drugs and oil companies also licking their wounds for most of the session.
Confidence in equities is non-existent and sentiment is at rock bottom levels. The FTSE 100 lost 172 points down to 5835. The DAX and CAC suffered even more with losses of 3.8% and 3.4% respectively on the day. Needless to say the parlous state of VW put the auto sector under the cosh, which exacerbated the pressure markets came under. These emission issues are likely to have ramifications with other car manufacturers. Having lost 19% on Monday, VW lost a similar amount of value yesterday – close to £15 billion in overall value. 11 million VW cars are potentially under scrutiny and so far 50 class action lawsuits have been drawn up in the US against VW. Volumes were slightly above average yesterday, though large amounts of mining stocks were sold off. Glencore were taken down nearly 10% to 106p, having sunk as low as 99.9p at about 1.25pm BST.
The atmosphere on the Street of Dreams was even worse. The DOW lost 1.09%, the S&P 500 1.23% and the NASDAQ 1.50%. Energy and resource stocks were hit hard, as the FED’s Lockhart and Bullard continued to argue the case for higher US interest rates. On the tech front, Yahoo!, Google, Twitter, Apple and IBM all lost around 2% during the session.
This morning HSBC’s PMI readings and factory gauge data made dispiriting reading – down at their lowest level for 6.5 years. Not surprisingly Asian markets were underwhelmed with the news! The ASX closed down 1.97%, with the Hang Seng easier by 2.9% close to lunch and the Shanghai Composite down 1.67%. Again there has been some tiny relief in the last hour. Japan’s Nikkei remains closed. European markets are expected to open just in negative territory this morning. Diageo, down 5.3% this year, posted an encouraging trading statement. Not so Smiths Industries with their outlook looking a little discouraging. There was also news that their highly regarded CEO Philip Bowman will be retiring. He was previously highly influential at Allied Domecq, before the drinks titan was sold to Pernod Ricard and Fortune Brands, and Scottish Power.
So far this year it is interesting to note that the main global indices have performed at follows since the start of the year – It feels much worse than that because of the rally up until May!
DOW -9.2%, S&P 500 -6.5%, NASDAQ -0.4%
FTSE – -9.6% – down 16.4% since May 2015
SHANGHAI COMPOSITE -6.9%
UK companies posting results – Wednesday – SMITHS GROUP, UNITED UTILITIES, Thursday – THOS COOK, EUROMONEY, SVG CAPITAL, DMGT, WS ATKINS, Friday – MJ GLEESON
US companies – Thursday – JABIL CIRCUITS, NIKE
Economic data –Wednesday – BBA MORTGAGE LENDING, Thursday – GERMANY Gfk CONSUMER CONFIDENCE, US INITIAL JOBLESS CLAIMS Friday – US GDP
David Buik – market commentator
Panmure Gordon & Co