TODAY’S FAYRE – Thursday, 21st January 2016
He thought he kept the universe alone;

For all the voice in answer he could wake

Was but the mocking echo of his own

From some tree-hidden cliff across the lake.

Some morning from the boulder-broken beach

He would cry out on life, that what it wants

Is not its own love back in copy speech,

But counter-love, original response.

And nothing ever came of what he cried

Unless it was the embodiment that crashed

In the cliff’s talus on the other side,

And then in the far distant water splashed,

But after a time allowed for it to swim,

Instead of proving human when it neared

And someone else additional to him,

As a great buck it powerfully appeared,

Pushing the crumpled water up ahead,

And landed pouring like a waterfall,

And stumbled through the rocks with horny tread,

And forced the underbrush—and that was all.”


 Robert Frost – poet – 1874-1963


It was sad to hear that Andy Murray and Novak Djokovic showed no surprise at allegations that game rigging was rife. How sad it is today that no sport seems immune from either dope or betting. I suppose Rugby comes close as the only major sport that seems totally above reproach.


When Sky’s Mark Kleinman announced that he had been briefed that Goldman Sachs had made a six figure donation to the EU ‘In’ campaign, it should have come as any surprise. After all, ever since the days of Gordon Brown’s premiership and before right up to day, Goldman has earned huge fees from government mandates – Absolutely nothing wrong with that. They are the best financial advisors and this Government has plenty of assets it wants to sell in the months and years to come. So it strikes me as perfectly sensible and pragmatic that it should make a contribution of this nature. After all PM Cameron and Chancellor Osborne have let it be known that they wish, subject to satisfactory renegotiations, they wish to remain in. So why would this august investment bank bite the hand that feeds them? So all the ‘tut-tutting’ and ‘guffawing’, realistically, is ill-thought nonsense.


No need to take you all through the pain of yesterday European session; you’ve been there and experienced the carnage. However the Street of Dreams had an equally horrible day, though it finished far better than expected. At one point the DOW was down 517 points. There was blood all over Wall Street and Broadway seeping in to the frosty gutters. However oil perked up from its darkest moments and half of the DOW’s daily loss was erased. At the end of the session The DOW was down only 1.56%, the S&P eased by 1.17% and the NASDAQ a pip under water at -0.12%.


US markets have only fallen 10% from their recent highs – mind you a loss of $2 trillion in value; so I believe this retrenchment just endorses a necessary healthy adjustment. We are not about to head in to recession. Employment data is encouraging. Global growth is a concern and analysts need to adjust their sights lower. Oil prices are of grave concern, but regulators and banks will call the shots, rather than the silly indulgent political games played in the Middle East and by Russia. Prices must rally at the end of the year. Underperforming loans to energy will eventually be pulled. Commodities will have a visceral effect on many economies, but surely much of this is priced in. For a wonderful assessment read Panmure’s Simon French’s article in this morning’s CityAM. Some key stocks took big hits – Chevron -5.9%, JP Morgan Chase -3.1%, Freeport McMoRan -10%, IBM -4.4% and Netflix -6.4%. Twitter dropped another 6.7%. This stock is down from its high of $74 to $15.57. However many now believe Twitter could be an added takeover target.


Asian markets, aided and abetted by aggressive PBOC open market intervention, put their best foot forward. However sophisticated investors refuse to be hoodwinked by the authorities. Very quickly some of them gave up the ghost. – ASX +0.46% (closed), Shanghai -3.23%, Hang Seng +-1.8% and NIKKEI -2.43% (closed).


Yesterday the market in London had to digest Royal Dutch Shell’s 40% drop in profits and the effect on its forthcoming acquisition of BG Group plus the fall in commodity prices, which savaged the likes of Glencore, BHP and Anglo American. This morning decent numbers were posted by Land Securities, Royal Mail, St James’s Place and Moneysupermarket. Halfords’ stock rallied 6.7% after its announcement. Its performance looked to have improved since its recent profit warning. Though Pearson’s numbers weren’t great, it appears that analysts think that the management is starting to get to grips with their problems – +5%. SAB Miller posted an 8% drop in profits, but since it will be falling in to the arms of AB Inbev, these numbers seem somewhat nebulous – shares +0.2%. Having sold its Spanish interest to Caixa Bank, which has 550000 customers and 262 branches, Barclays is not only keen to get rid of its 62% stake in Barclays Africa, including ABSA in South Africa, but also this bank, under CEO Jes Staley’s leadership is looking to lighten up the staff globally by 1000, which may come from investment banking and in Asia. It looks as though Deutsche Bank will be posting a loss for the year. It has become clear that new CEO John Cryan has shaken this bank’s tree branches to the core and a new plan is now underway.




US Companies posting interim results this week – Thursday – VERIZON, BANK OF NEW YORK MELLON, AMERICAN EXPRESS, STARBUCKS, SCHLUMBERGER, Friday – CITIZENS



David Buik


Market Commentator – Panmure Gordon & Co 


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