TODAY’S FAYRE – Wednesday, 9th December 2015
“When I shall be divorced, some ten years hence,
From this poor present self which I am now;
When youth has done its tedious vain expense
Of passions that for ever ebb and flow;
Shall I not joy youth’s heats are left behind,
And breathe more happy in an even clime ?–
Ah no, for then I shall begin to find
A thousand virtues in this hated time!
Then I shall wish its agitations back,
And all its thwarting currents of desire;
Then I shall praise the heat which then I lack,
And call this hurrying fever, generous fire;
And sigh that one thing only has been lent
To youth and age in common–discontent.”
Matthew Arnold – poet – 1822-1888
Germany posted its first trade data since the VW crisis and it is hard to really work out how adversely that news affected these numbers – Exports last month were down 1.2% and imports by 3.4%. It could take another month or two to get the real picture. Maybe the good people of Wolfsburg will eke out a few crumbs of comfort, having seen its football team tip Manchester United out of the champions League last night with a 3-2 victory.
Surely there is an awful lot of ballyhoo and hot-air being spoken about Tyson Fury’s candidacy for SPOTY. One either votes for him for his achievement in becoming heavyweight champion of the world in all divisions or you don’t vote for him. Vote for Murray or whoever! Fury’s ‘left field’ odious ‘non-PC’ ideas on sections of society are of no consequence in this issue – Surely?
There were only a couple of issues on equities’ agenda yesterday, if the truth be told and that was oil prices, which sank to a 6 year low in New York last night before rallying by just under 2% in Asia this am and the continuing rout of commodity prices, particularly copper and iron ore. Ironically yesterday it was Anglo American that grabbed the headlines, when Mark Cutifani announced that this gold mining titan would not be paying a dividend for the second half of 2015, nor would it be paying one in 2016. He also said that the 135k workforce would slashed mercilessly may be down to 95k by the end of 2o16. These comments were met by visceral treatment from shareholders, which took Anglo’s shares down by nearly 12.2% by the end of the session. Anglo’s shares have fallen by 74% in a year and 94% since 2010 when they stood at their pinnacle at £34. Unfortunately and not surprisingly other mining companies fell in sympathy yesterday – Glencore down 8%, BHP and Rio both down 5%. In hindsight to have been so reliant on China for demand, looks to have been folly, in valuing this sector.
Talk of oil prices going to $20 a barrel by Goldman Sachs may be fanciful, as demand does not seem to be weakening. Also Iran may take some months to be fully operational and politically for oil to be that depressed in price would be unsustainable for many countries.
So yesterday on the back of such dreary news the FTSE fell by 1.45% (88 points) to 6135. Although Anglo-A attracted most of the headlines today, losses were across the board – not a single sector in the green. It appeared to many that growth fears are escalating and gathering momentum yet again. The DAX lost 1.95% in value and the CAC 1.57%. The Street of Dreams was equally uninspiring as a hunting ground, with oil and resources knocking the stuffing out of any semblance of a positive sentiment. The DOW closed down 0.92%, with the S&P 500 also under water – -0.65%. The NASDAQ proved quite resilient closing -0.07%. After hours it was announced that conversations were taking place between two giant chemical moguls – Dow Chemicals (shares up 5.5%) and Dupont (shares up 6.2%) about a merger. Yahoo! also popped after hours, when it became clearer that the internet luminary would not be selling its stake in Alibaba.
Inflation data from China did not suggest that hope sprang eternal, though factory prices rose by 5.9%%, but CPI stands at only +1.5%, which is a slightly worrying deflationary trend. Japan produced unexpectedly good machinery orders +10.7% month on month but that could be just a blip. Anyway Asian markets were also affected by the commodity rout! Heading towards the close the ASX was down 0.55% with the NIKKEI easier by 0.98%. The Hang Seng was down 0.41% with the Shanghai Composite remaining just above the Plimsoll line – +0.02%.
UK companies posting results this week – Wednesday – Balfour Beatty, 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 – Toll Brothers, Costco, Krispy Kreme, Wednesday – Korn/Ferry, Men’s Wearhouse
Economic Data – Thursday – BOE MPC meeting UK trade Data
Market Commentator – Panmure Gordon & Co