TODAY’S FAYRE – Thursday, 3rd December 2015
“Let me take this other glove off
As the vox humana swells,
And the beauteous fields of Eden
Bask beneath the Abbey bells.
Here, where England’s statesmen lie,
Listen to a lady’s cry.
Gracious Lord, oh bomb the Germans,
Spare their women for
Thy Sake, And if that is not too easy
We will pardon Thy Mistake.
But, gracious Lord, whate’er shall be,
Don’t let anyone bomb me.
Keep our Empire undismembered
Guide our Forces by Thy Hand,
Gallant blacks from far Jamaica, Honduras and Togoland;
Protect them Lord in all their fights,
And, even more, protect the whites.
Think of what our Nation stands for,
Books from Boots’ and country lanes,
Free speech, free passes, class distinction,
Democracy and proper drains. Lord, put beneath
Thy special care
One-eighty-nine Cadogan Square.”
John Betjeman – poet laureate – 1906-1984
Regardless of political persuasion, it was a privilege to hear Shadow Foreign Secretary, Hilary Benn deliver such an eloquent and impassioned speech in the Commons in support of the Government’s motion to assist in the systematic bombing of ISIS in Syria. He is becoming every bit as loquacious and lucid as his distinguished father was, without the irrational firebrand image. There are two other observations I would make. Firstly both are/were courtesy personified. Secondly that speech has to be the most statesmanlike speech made by a Labour leader for a generation. The content was brilliant and it seemed utterly sincere.
Sadly the reaction to this appalling act of barbarism in San Bernardino in California, with 14 people gun downed indiscriminately, will be to buy more guns/ammo – urged on by the NRA, backed by gun/ammo manufacturers. When will they learn?
Ahead of OPEC’S meeting on Friday, Nymex crude dipped briefly below $40 a barrel until it was rumoured that Saudi Arabia may ask Iran and Iraq to curb the level of output. Whether that rumour has any substance to it remains to be seen. Anyway prior that that little nugget of uncertainty, weaker oil prices helped skim any remaining cream off the main US indices. The pull-back was also aided and abetted by FED chairman Janet Yellen’s comments that any resistance to cut interest rates on 16th December could undermine stability and possibly trigger the start of a possible flirtation with recession. So she all but told the markets, that unless we get horrible payroll data tomorrow, the FED will implement a symbolic 25 basis point increase. It could be the only one for a year, but the hike is unlikely to damage the US’s economy.
The main European bourses fell away yesterday – profit taking from the day before and also waiting for ECB President Mario Draghi to up his game at today’s meeting partly in response to disappointing inflation data – if one can call it that at 0.1%. 3 months ago the ECB forecasted that inflation in 2016 would be 1.1% and 1.7% in 2017. Yesterday’s number means the current Y/O/Y number will be no more than 0.9%. The ECB is expected to increase QE above the €1.1 trillion facility, by extending the facility beyond September 2016, as well as cutting the deposit rate by 15 basis points below the current -0.2%. The FTSE remained resilient adding 25 points at 6420, though the DAX and CAC went in to reverse. It was pharmaceuticals (+1.5-2.5%) that made their mark yesterday, having spent some weeks in the doldrums. Astra, GSK and Shire all put their best foot forward. We bade Morrison (-0.2% at 151p) farewell or au revoir from the FTSE as we did to G4S and Meggitt (-3%). In fairness to Morrison chairman and CEO Andy Higginson and Dave Potts; they have not had enough time to make their mark. History tells us that they will return. Greene King’s results were positive (+1.5%). Saga was a decliner – down 4.7%.
The Street of Dreams eased on Yellen comments and falling oil as mentioned earlier. The DOW lost 0.89%, the S&P -0.10% and the NASDAQ surrendered 0.64%. Resource and mining stocks bore the brunt of the downturn. Yahoo! responded to a possible sale of its internet business – +5%. Netflix also caught the eye – +2.8%. S&P downgraded certain US banks including Citibank, BOA and JP Morgan Chase
Ryanair posted impressive traffic figures for November +21% to 7.7 million. The load factor also improved from 88.93% to 91.9% last month and on a Y/O/Y basis it is up from 85.8% to 91.9% – this will be the driving number to any share price rally. The Shell/BG deal is all but set with Australia agreeing regulatory requirements with just China to fill the book. Barclays has agreed to sell its Italian interests to MediaBanca Group. . As rumoured over the weekend, AB InBev have agreed in principle to sell Peroni and Grolsch ahead of acquiring SAB Miller.
UK companies posting results – Thursday – GW PHARMACEUTICAL, DS SMITH, Friday – BERKELEY GROUP, EASYJET (TS) US companies posting interim results – Thursday – KROGER, DOLLAR GENERAL, BARNES & NOBLE, Friday – BIG LOTS
Economic – Thursday – ECB meeting, Friday – US balance of trade. Non-Farm Payrolls.
Market Commentator – Panmure Gordon & Co