TODAY’S FAYRE – Tuesday, 8th December 2015
“I must down to the seas again, to the lonely sea and the sky,
And all I ask is a tall ship and a star to steer her by,
And the wheel’s kick and the wind’s song and the white sail’s shaking,
And a grey mist on the sea’s face, and a grey dawn breaking.
I must down to the seas again, for the call of the running tide
Is a wild call and a clear call that may not be denied;
And all I ask is a windy day with the white clouds flying,
And the flung spray and the blown spume, and the sea-gulls crying.
I must down to the seas again, to the vagrant gypsy life,
To the gull’s way and the whale’s way where the wind’s like a whetted knife;
And all I ask is a merry yarn from a laughing fellow-rover
And quiet sleep and a sweet dream when the long trick’s over.”
John Masefield – poet laureate – 1878-1967
The 4th test match between India and South Africa in Delhi was remarkable for a number of reasons. Firstly South Africa was world No1 and ended the series being trounced 3-0 by a very good improving Indian side, under the enthusiastic and youthful leadership of Virat Kohli. In the final innings South Africa took 143.1 overs to be bowled out for 143 to lose the game by 327 runs. Secondly 22 runs, which were scored in the first session before lunch, was the lowest run making session in a 2-hour test match session in history. India have some great batsmen in all conditions and the talents of Kohli, Vijay, Sharma, Rahane and Pujara should serve them well in the years to come, though history tells us India find it difficult to win away from home. South Africa was humbled in India. Let’s hope England can take advantage from this poor vein of form, though Steyn and Philander may well be back to lead their attack.
Heathrow/Gatwick/Estuary airport – Had this been Germany a new runway would have been up and running for about 2 years. By all means consult with business, airlines and most important of all, the environment and those who live in the area. But then it has to be decision time!! That is why we elect governments – to make decisions. So do us all a favour, Mr Cameron and make one. Through an unacceptable level of prevarication, the UK and London in particular is losing business. As the crow flies I live 8 miles from Heathrow, if it has to be there – so be it! I have lived in the flight path of London Airport for 21 years – makes no difference to me!
Market activity yesterday reflected my mood and the weather – dull, dank and uninspiring. German Industrial production for October failed to ignite any smouldering embers of hope. It expanded by just 0.2% for October – very disappointing as against estimates of +0.7%. Europe gave equities its best shot with the DAX adding 1.25% and the CAC +0.88%. However the FTSE 100 made a rather pathetic effort to lift itself from Friday’s doldrums. On the Street of Dreams the DOW eased by 0.66%, the S&P down by 0.70% and the NASDAQ by 0.79%. Airlines did well on cheap oil. Chevron and Exxon Mobil received some visceral treatment, but nothing as violent to that meted out to Office Depot – down 15% and Staples down 13%.
Though the US markets accepted that the Farm Payroll data was likely to signal a 25 basis point hike on 15/16 December, there was less enthusiasm for it here in Europe, with many also being concerned about emerging countries and how their respective economies would react. The FTSE closed down 0.24% to 6223, thanks in the main to poor performances from BP, Shell and BG Group – down between 3-4.5%. Oil prices fell to a 7-year low to $37 a barrel, triggered by a lack of agreement to cut production at Thursday’s OPEC meeting at Saudi Arabia’s instigation. Russia and Iran decline the invitation to cut production – Quelle surprise! Below $40 a barrel, Russia’s economy is in the ‘cack’, exacerbated by tough sanctions being imposed the West – hence Putin being very happy to court Iran and Iraq, whilst attempting to tie up all traffic from these countries through Syria, in attempt to neutralize Saudi Arabia. Saudi Arabia has a growing budget deficit – not good news when all they have is oil, defense and construction.
This morning Asian stocks may have wanted to put their best foot forward but slightly disappointing Chinese trade data – a little better than awful – took the rug from under the market’s feet. Exports were -6.8% in November (-5% in Oct) & imports were -8.7% in November (-12.6% in Oct). Not surprisingly there was no appetite for risk in the Far East. At the close the ASX was down 0.91% and the NIKKEI by 1.04%, despite a revision in GDP suggesting that growth would be 1% above the Plimsoll line for 2015. Just after lunch the Shanghai Composite was down 1.89% and the Hang Seng was easier by 1.55%.
Retail sales in the UK were a bit of a mixed bag. Like for like sales were down 0.4%. The previous year they had increased by 0.9%. However ‘on-line’ were up by 11.8% (£1.1 billion) against 12% in the corresponding period to November 2014. Like many others I am becoming very nervous about Greece’s finances – not for the first time. Greece needs another €1 billion to boost its finances but has yet to implement an austerity programme required; hence the yield on Greek 10-year bonds is up nearly 1% from a month ago to 8.33%! Greece has a week to deliver! Did you see that pink elephant flying across the window? Serco disappointed due to lack of new contracts after General Election – down 4.5%. NAB is considering an IPO for Clydesdale Bank. Tesco had more bad news as Jill Easterbrook served notice to leave after 15 years’ service. Tesco shares fell 3%.
This morning it was the mining sector and Rolls Royce that dominated the FTSE 100 opening. Anglo American at its investor meeting announced dividend cuts which has sent the stock in to free fall – down 6.5% at 9.06am. Rio and BHP are both down 5% in sympathy. Rolls Royce after a downgrade is 2% light and the FTSE 100 s down 14 points at 6209.
UK companies posting results this week – Tuesday – Hornby, Wednesday – Stagecoach, Focusrite, Ashtead, Carillion, Thursday – Sports Direct, Micro-Focus, John Wood Group, Centrica, Photo-Me, Marshalls, Darty, Whitbread (TS), Ocado (TS), Go-Ahead (TS), Tui Travel (TS), Friday – Bellway (TS), MJ Gleeson (TS).
US companies posting interim results – Tuesday – Autozone, Toll Brothers, Costco, Krispy Kreme, Wednesday – Korn/Ferry, Men’s Wearhouse
Economic Data – Tuesday – EU GDP, UK Industrial production and manufacturing output, BRC sales, Thursday – BOE MPC meeting UK trade Data
Market Commentator – Panmure Gordon & Co