TODAY’S FAYRE – Thursday, 15th October 2015


Alas, poor Yorick! I knew him, Horatio:

a fellow of infinite jest, of most excellent fancy:

he hath borne me on his back a thousand times;

and now, how abhorred in my imagination it is!

My gorge rims at it. Here hung those lips that I have kissed

I know not how oft.

Where be your gibes now? your gambols? your songs?

your flashes of merriment, that were wont to set the table on a roar?

Not one now, to mock your own grinning? quite chap-fallen?

Now get you to my lady’s chamber,

and tell her, let her paint an inch thick, to this favour she must come;

make her laugh at that.”


 “Hamlet, Prince of Denmark”


 William Shakespeare – poet & playwright – 1564-1616


 Off to the cinema tonight to see the RSC’S much coveted production of ‘Hamlet’ with Benedict Cumberbatch in the lead role. Expectations are very high, though I understand most of the spear-carrying roles are way short of the standard Mr Cumberbatch has set.


However I wish Mr Cumberbatch would stay out of front line politics.  A meeting with Home Secretary Theresa May over immigration is not going to solve anything; much in the same way that Hugh Grant brought very little to the party at the Leveson ‘hacking’ hearing. Hacking is unacceptable but Mr Grant really did lead with his chin, courting publicity associated with an unorthodox private life!


Yesterday could only be described as another ‘left-field’ effort. Though markets are not hysterical, they are in disarray with continued levels of unhealthy volatility, unless one is a day trader or a hedge fund operator with hob-nailed boots! The daily turmoil of range trading seems to know bounds. The FTSE 100 is down 4.5% on the year to date. It feels like it has been up 10% and down 15%, virtually on a weekly basis. Eventually there is a price to pay for uncertainty. Conditions to me do not feel comfortable for consolidation, but what do I know? The US and UK economies seem to be on the rise, BUT they keep being hit with average economic data. Last night the content of the Beige Book was marginally dispiriting for both investors and the FED. Wage inflation was said to be moderate and retail sales in September rather disappointing. So Mme Yellen, a rise in interest rates before 2016 seems unlikely. In essence news of that nature should have been good for equities, but the Street of Dreams was preoccupied with the earnings season and a profits warning from Walmart of some magnitude. However Asia this morning did pick up the cudgel. At the time of writing the ASX closed +0.63%, Nikkei closed +01.01% and Shanghai was +1.74% and Hang Seng +1.93% at 7.25am. Further stimulus packages are expected to be introduced next week accompanying GDP and retail data.


The main US indices closed down last night – DOW -0.92%, S&P 500 -0.47% and the NASDAQ -0.29%. Investors were in the process of getting over their disappointment in JP Morgan’s results; so were partly cheered by decent efforts from Bank of America Merrill and Wells Fargo. BOA posted a profit of $4.51 billion on revenues of $20.91 – eps 37 cents – shares up 0.77%. Wells Fargo’s profit was $5.8 billion on revenue of $21.9bn – eps $1.5 – shares down 0.69%. Both banks beat expectations, but they were not ‘blockbustering’ efforts. Netflix disappointed. These shares have gone up 125% this year; so expectations were high! The net profit was $29 million (down 50.9% on last year) on revenues of $1.58 billion (down 29.3% on last year). There were 880k new subscribers – the market was underwhelmed – shares down 7%. Twitter made a shrewd appointment with an executive with a decent track record at Google – Omid Kordestani – he will take some heat out of Jack Dorsey’s kitchen.


Yesterday’s session in London was infinitely forgettable – FTSE 100 down 70 odd points at 6269. The mood was dull. Adverse Chinese inflation data and some profit taking on house builders, triggered by concern that the MPC will start hiking rates sooner rather than later – I can’t have that with inflation still temporarily in negative territory and business margins so tight! Mining and oil sectors were also ‘pony!’ Hargreaves Lansdown’s results were the only bright star on yesterday’s horizon. Even the UK’s positive employment data of 79,000 people being taken off the dole leaving the unemployed at 1.77 million – 5.4%, failed to make a positive impact.


This morning traders seem ‘bright eyed and bushy tailed’ thanks to a slew of decent earnings, apart from Burberry. Burberry’s Chris Bailey posted a 2% increase in sales in the last trading period – nothing like enough on that share valuation, where one virtually expects double-digit increases. China is clearly withering as a user of luxury goods – shares down 11% at 8.30am. There were stellar efforts from Unilever (+4%) and Man Group (+2.5%), as perfectly adequate efforts from Booker (-0.5%), WH Smith (+0.5%), Rank (+1%) and Virgin Money (+3%). After this week’s successful Worldpay IPO, McCarthy & Stone is going to have another bight at the cherry after a 9 year absence when HBOS originally brought the retirement home house-builder to the market and Equiniti will chance its arm on 27th October, subject to market conditions remaining positive. The issue price range was agreed at 165-200p.


I really do not understand the outrage and furor over the possible appointment of Jes Staley as CEO of Barclays. Whatever happened to free enterprise? We are told by the BOE and government that no bank is too big to fail. Yes, Barclays did avail itself of the BOE facilities but was NEVER bailed out. UK banks, with the exception of Barclays and HSBC in the Far East, have been lousy at investment banking. We need a firm imprint in London, rather than letting Germany, the US and Switzerland run amok in our back garden. John McFarlane, thanks goodness, gets it! The time to have a ‘pop’ at Barclays, McFarlane and Staley, is when they corporately get it wrong! – Until then, pipe down and let Barclays charge what the traffic will bear! George Orwell will be laughing at this underneath the daisies! The UK is hopefully not a police state!


Panmure’s Keiron Hodgson, Paul Modlock and David McCreadie seem to have, justifiably, with others a little penchant for gold, whilst other markets are in turmoil. $1200 an ounce may well not be pie-in-the-sky!





 ECONOMIC DATA – Wednesday – EU Industrial Production, US Beige Book, UK Employment data, Thursday – US CPI  and Initial Jobless Claims, Friday – US Industrial Production.


 David Buik – market commentator


Panmure Gordon & Co


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