TODAY’S FAYRE – Tuesday, 27th January 2016
“Thou comest, Autumn, heralded by the rain,
With banners, by great gales incessant fanned,
Brighter than brightest silks of Samarcand,
And stately oxen harnessed to thy wain!
Thou standest, like imperial Charlemagne,
Upon thy bridge of gold; thy royal hand
Outstretched with benedictions o’er the land,
Blessing the farms through all thy vast domain!
Thy shield is the red harvest moon, suspended
So long beneath the heaven’s o’er-hanging eaves;
Thy steps are by the farmer’s prayers attended;
Like flames upon an altar shine the sheaves;
And, following thee, in thy ovation splendid,
Thine almoner, the wind, scatters the golden leaves!”
Henry Longfellow – author & poet – 1807-1882
BBC’S Panorama programme last night on President Putin was hardly an eye opener. We have suspected that his wealth grew by gargantuan proportions since he became mayor of St Petersburg in the early ‘90s. Frankly it has increased with indecent vulgarity. For the full story I thoroughly recommend a book – ‘Putin’s Kleptocracy; who owns Russia?’ by Karen Dawisha. Admittedly it has a serious US anti-Russian bias, but nonetheless fascinating.
A huge number of rumours are flying around as to Chancellor Angela Merkel’s health. Many say she is suffering from deep depression and is close to a breakdown. For the sake of her family and Germany I hope these rumours are just playful fantasy.
Last Friday night many believed that the sting had been taken out of the market’s fractious and frayed nerves! I am afraid not. Once oil started to fall yesterday from its recent pinnacle of $32.50 to below the $30 threshold, the market immediately came under the cosh. The FTSE only lost 0.39% to 5877. The chickens really came home to roost on the Street of Dreams last night with the DOW easing by 1.29%, the S&P 500 by 1.56% and the NASDAQ by 1.58%. The S&P energy index dropped 4.5%, with Conoco-Phillips getting a good slapping as it fell over 9%. It wasn’t all bad news – McDonald’s beat expectations with ‘all-day-breakfast’ meals proving a huge success – shares up 0.7% Even Exxon Mobil and Chevron suffered ‘the slings and arrows of outrageous fortune!’ – Both down over 3%. Dynergy and NRG lost 11.5% and 9.6% respectively.
The main tech brigade also went into reverse due to the Chinese conundrum of uncertainty. No one has a clue as to how bad the situation in China is. Twitter was down 4% after 3 executives slung their hooks. Apple was down 1.98%, with Facebook, Netflix, Cisco and Intel easier by about 1%. One thing that is becoming very clear is that the capital flows out of China, particularly from sovereign wealth funds, as well as from emerging nations in Asia are very substantial. The floodgates have been well and truly opened and it is having an adverse effect on sentiment. This morning Asian shares have taken a bath. At the time of writing the Shanghai Composite is down 6%, the Hang Seng is 2% below yesterday’s level and the NIKKEI closed down 2.4%. The scene has been ugly!
This morning there were decent interim results from Card Factory, Dixons Carphone, Marston’s and Crest Nicholson. easyJet was solid but there were a few worrying comments. These companies are not posing the problems that investors are currently confronted with. It is mining, energy banks and drugs that are providing the hay-maker punches to punters’ solar-plexuses
I fell upon this advice yesterday –
Advice for Europeans! You should open an account in the United States as your hedge against European banking madness. Europeans can still open in the USA. Americans cannot open in Europe. This should be the best bet until 2020. Switzerland still has approved bail-ins. Canada is not altogether great either. As for the UK its currency is in a bear market. So the best bet for now is a US bank account until the cycle reverses.
U.K. earnings this week – Tuesday – PZ Cussons, easjJet, Marston’s, Crest Nicholson, Dixon Carphone, PurpleBricks, Wednesday – Antofagasta, Britvic, Paragon, Aberdeen Asset Management, Sage Group, Thursday – Anglo-American, 3iii, RPC, First Group, Diageo, SSP, SSE, Lonmin, DMGT, Kaz Group, Friday – Sky, AB Barr, Vedanta Resources
US Earnings posted this week – Tuesday – 3Ms, Freeport-McMoRan, Proctor & Gamble, Johnson & Johnson, Lockheed Martin, AT&T, Apple, Wednesday – eBay, PayPal, Boeing, BIOGEN IDEC, Texas Instruments, Facebook, Thursday- Alibaba, Time Warner, Ford, Caterpillar, Pulte, Baker Hughes, Microsoft, Visa, Raytheon, Hershey, Bristol Myers Squibb, Friday – Colgate-Palmolive, Chevron, AbbVie, Honeywell, MasterCard
Economic data this week – Tuesday – US House Price Index, BOE Financial Stability Report, Wednesday – FOMC, BBA mortgage applications & bank lending, Thursday – UK preliminary GDP, Friday – US GDP Q4.
Market commentator – Panmure Gordon & Co