TODAY’S FAYRE – IMF & BP’S BOB DUDLEY

TODAY’S FAYRE – Wednesday 13th April 2016

 

Surprised by joy–impatient as the Wind    

I turned to share the transport–O! with whom    

But Thee, deep buried in the silent tomb,

That spot which no vicissitude can find?

Love, faithful love, recall’d thee to my mind–    

But how could I forget thee? Through what power,    

Even for the least division of an hour,

Have I been so beguiled as to be blind

To my most grievous loss?–That thought’s return    

Was the worst pang that sorrow ever bore,

Save one, one only, when I stood forlorn,    

Knowing my heart’s best treasure was no more;

That neither present time, nor years unborn    

Could to my sight that heavenly face restore.

 

“William Wordsworth – poet – 1770 – 1850

 

 

 

I am very pleased to have given my response to the IMF’S damaging prognosis to BREXIT off my chest! – Summary in a word and as respectfully as I can – COBBLERS! If you look closely at what Maurice Obstfeld said – He is warning that Brexit could damage the European and Global Economies and that is why he wants the UK to remain. Obviously, the UK would also suffer along with the rest of the World. His concern is Global and not the UK. Again, I blame Germany for their obsession with federalism and its reticence and reluctance to negotiate a decent deal with the UK.

 

I am absolutely devastated for Notts and England batsman James Taylor – ‘Titch’ to his colleagues – that at the age of 26 he must give up the game he loves and cherishes. This is a very sad day. It is amazing that with modern day surgery there is no corrective measure that can be taken.

 

Let me turn to BP’S Bob Dudley’s remuneration package, which is being voted on today. As Wilfred Pickles said on the wireless all those years ago (60) – “Give him the money, Mabel!” Investors have to be jesting in contemplating to vote against. Without his relationship with certain key individuals in the US BP would have been raped and pillaged. President Obama is no special friend of this country, despite BP employing nearly 30,000 people in the US. His attitude towards ‘British Petroleum’ has been a disgrace. Also and more importantly, despite global sanctions, Bob Dudley’s relationship with Rosneft and the Kremlin more than entitles him to his bag of swag!

 

So the global oil slump may have ended. Perhaps OPEC and others will agree to put output on hold when they all gather together for a chin wag on Sunday 17th April 2016. Yesterday Nymex breached the $42 a barrel threshold and Brent $44. Commodities decided to join in the party resulting in miners having a lovely unimpaired run on the rails – Anglo +9%, Glencore +5% and BHP +3.2%. Not surprisingly BP and Shell were in the vanguard – not a huge rally but plenty of support. The FTSE 100 closed up 42 points at 6242, aided and abetted by stronger than expected UK inflation number for March of +0.5% against 0.3% last time. Holiday flights were up strongly as was the service sector’s costs. Food inflation remained in the ‘in-tray.’ Panmure’s Simon French – chief economist – does not expect any rate rise in the UK this year. BUT if Sterling remains weak resulting in some inflation coming in to play, it would be responsible of the BOE to raise its expectations for a rate rise sooner than say two years away.

 

So the Street of Dreams, knowing that it had to wait until later in the week for any significant banking results, which if adverse, could rock the boat, used the opportunity to crack on with energy stocks leading the charge. The DOW ended the session +0.94%, the S&P 500 +0.87% and the NASDAQ +0.80%. Chevron and Exxon Mobil both added 2.8%. The outlook for the profits of constituent stocks in the S&P 500 suggests an average fall of about 7.5%.

 

There was some great export data from China this morning – Chinese export figures posted the first increase in 9 months – a significant increase – Up 11.5% in March (est: +2.5%). However imports were down quite sharply by 13.5% (est: -10.2%). The Yen remained weak. These two significant issues gave Asian markets significant impetus. The ASX closed up 1.5% with the NIKKEI sharply stronger – +2.8%. Towards the close the Shanghai Composite was up 1.4% and the Hang Seng by 3.2%.

 

This morning Tesco numbers were slightly better than expectations with like-for-like sales up by 0.9% (EST: 0.8%) with a profit of £1.46 billion against a loss of £5.75 billion last year. Debt was cut by 40% to £5.1 billion and non-core assets will continue to be sold. However the market was concerned about forthcoming trading conditions and competition and took the shares down by 3.7% at 9.00am. WH Smith and Halfords posted very good numbers and the market reacted accordingly – +2.5% and 4.5% respectively. FTSE 100 is up 80 points at 6320, courtesy of oil and commodity prices.

 

UK companies posting results – Wednesday – TESCO, WH SMITH, HALFORDS (TS), JUPITER FUND MANAGEMENT, WS ATKINS, FRESNILLIO, ROBERT WALTERS, MIDATECH, Thursday – BURBERRY, UNILEVER, DEBENHAMS, JD SPORTS, PZ CUSSONS, PERSIMMON (TS), HAYS (TS), POUNDLAND (TS), MOTHERCARE (TS), Friday – MAN GROUP

 

US companies posting interim results – Wednesday – JP MORGAN CHASE, Thursday – BANK OF AMERICA MERRILL LYNCH, WELLS FARGO, BLACKROCK, Friday – CITIGROUP

Economic Data – Wednesday – BOE CREDIT, Thursday – UK MPC MEETING, Friday – UK CONSTRUCTION OUTPUT and TRADE BALANCE

 

 

David Buik

Market Commentator – Panmure Gordon & Co

D +44 (0)20 7886 2775

Mobile – 0044 7788 144 877

Panmure Gordon & Co

One New Change | London | EC4M 9AF | United Kingdom

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