TODAY’S FAYRE

TODAY’S FAYRE – Sunday, 24th April 2016

 

From Clee to heaven the beacon burns,

The shires have seen it plain,

From north and south the sign returns

And beacons burn again.

 

Look left, look right, the hills are bright;

The dales are light between,

Because ‘tis fifty years to-night

That God has saved the Queen.

 

Now, when the flame they watch not towers

About the soil they trod,

Lads, we’ll remember friends of ours

Who shared the work with God.

 

To skies that knit their heartstrings right,

To fields that bred them brave,

The saviours come not home to-night;

Themselves they could not save.

 

It dawns in Asia, tombstones show

And Shropshire names are read;

And the Nile spills his overflow

Beside the Severn’s dead.

 

We pledge in peace by farm and town

The Queen they served in war,

And fire the beacons up and down

The land they perished for.

 

‘God save the Queen’ we living sing,

From height to height ‘tis heard;

And with the rest your voices ring

Lads of the Fifty-Third.

 

O God will save her, fear you not:

Be you the men you’ve been,

Get you the sons your fathers got

And God will save the Queen.”

 

 

AE Housman – poet – 1859-1936

 

The Cameron/Obama Circus held Friday’s West-end production in the ‘Big Top’ across the road from No: 10. It was a beautifully orchestrated affair by the two ringmasters and their advisors from the Foreign Office and State Department. Their senior officials clearly wrote the script! (Back of the queue? – not an American expression!). Incidentally, in passing, does President Obama realise that about 20% of overseas investment in the US comes from the UK and US fund managers invest billion in UK stock market industry and commerce.  Is he going to ‘throw the baby out with the bath water?’ – I doubt it!

 

The presentation was masterful as both world leaders have very good interpersonal skills. The rhetoric was high class; the content was fearful, threatening and extremely worrying. In the case of President Obama, his speech and its content was not what one would associate with a special friend or relationship. If that is the best we can do for a best friend, I suspect in the future we must look elsewhere. 

 

In fairness, if I were David Cameron, I would be preening myself like a peacock! – Job done! However the fight is far from over, as many like me, don’t like being threatened by playground bullies! In the event of BREXIT, the U.K. is sent to the back of the queue/line-up for a trade deal with the US, so be it. As it now stands TTIP is a lousy trade agreement stacked in favour of the US, which so far has taken three years to negotiate and it is still not done. Any agreement that takes that long is a very average one. Also when a push comes to a shove, pragmatism will rule OK. The U.K. should not feel marginalised. 

 

I am hugely pro-United States but confess to being a tad disappointed with President Obama’s attitude to the UK in the last 8 years. He was Luke-warm about Libya and recently severely criticised David Cameron. He did not appear to be supportive over Syria until the situation was getting out of hand. What has concerned me more than anything is his refusal to engage with President Putin – despot or not. There must always be a dialogue between Russia and the West. 

 

President Obama has been visceral in his treatment of BP, and also relatively uncooperative over extradition procedure.  He blatantly had the bust of Winston Churchill removed from his office. There is little evidence of committed friendship. If the truth be told I am far from convinced that he cares too much for Old Blighty. We must hope that we have more cordiality with his successor. A good relationship with the United States is a prerequisite in the dangerous world we live in. 

 

What saddens me is that Mr Obama fails to understand that the EU is a basket case and may not even exist in 10 years. The U.K. will never be a leader in the EU – one vote for each country. Why should we be dragged down by the economic incompetence of others? Why should the UK be part of a political union heading towards federalism?  The US may well want the UK is the same playpen, making it easier to manipulate. I think Mr Cameron and President Obama may have underestimated the resolve to rid ourselves from this turbulent dream, which is becoming a nightmare.  Finally why would Mr Obama ask us to swallow the EU, allowing our courts to be over-ruled, when hell has a better chance of freezing over than the President EVER countenancing that idea back across the pond?

 

The gloves are now off and BREXIT need to post some supporting credible data in repudiation of the Government’s rather fanciful numbers sooner rather than later!

Those were my views and not those of Panmure Gordon & Co

 

Last week too much time was spent waiting for the Obama visit by obsessive onlookers like me, rather than concentrating the mind on the relevant global financial agenda. If the truth be told many bourses have done well to keep their heads above water. Perhaps in the case of the DAX and the CAC there was a degree of protection to be had from the fact that there are only 30 and 40’stocks respectively in each index and that surely is not an accurate barometer of economic activity. Certainly the visceral treatment meted out to VW, which posted a loss 0f $4.3 billion and liabilities for its duplicitous behaviour of €14 billion, seemed to do very little to damage the DAX.  

 

However on Friday what many had feared was starting to happen – other auto companies admitting to defects in their vehicles. Such was the case for Fiat Chrysler, which will be recalling 1.1 million cars for possible brake defects. In Japan suffice to say that Mitsubishi Motors lost 40% in value in three days, thanks to inaccurate and misleading mileage data. Who else will appear out of the woodwork? In passing General Motors’ numbers did not sizzle last Thursday and a few cocked-eyebrows will have appeared at CEO Mary Barra’s one-off share award valued at $29 million – alright for some!  More about executive pay later in this missive.

 

The main global indices at the end of last week looked as follows – S&P +0.17%, FTSE -0.53%, European stocks +1.60% and the Nikkei +4.30%. US earnings season saw some disappointing efforts from the likes of Alphabet, IBM, Microsoft, Caterpillar and Starbucks, though McDonald’s, Honeywell and GE bucked the rather anaemic trend. European stocks really bounced out of the traps, mainly due to a continuing aggressive QE policy, despite an unattractive spat between German Finance Minister Schauble and ECB’S Mario Draghi over monetary policy, with the former whinging about low to negative interest rate policy. Oil saw a decent rally taking crude above $43 threshold.  Mining stocks made an encouraging start to the week, but by Friday it was felt that iron ore prices had little left in the tank.

 

The US earning floodgates really open next week – see below and in the UK the bank earning season will be of real interest.  Since the major sell off from the UKFI of Lloyds Banking shares precipitated by a special dividend, its share price has made no progress. Banks are not a vogue sector, though gains from over-sold positions, have been made in the last 2 weeks. Low interest rates, the increasing cost of capital, rising impairment charges connected with non-performing loans to the energy sector may see impairments increase and there may be little sign of a drop in PPI claims. The Chancellor will want to see some improvement in RBS’S performance, with results posted on Friday, as he would hope to sell much of the taxpayer’s stake by the end of the Parliament. Barclays’ Jes Stayley at his first full results presentation since becoming CEO, is expected to have thrown all the skeletons out of the cupboard, thus creating a more appetising looking balance sheet. However the already forecasted cut in dividend will not be well received. 

 

A final comment on executive pay! I think there is a real difference between entrepreneurial remuneration and that of a manager of large businesses. I have no quarrel with Sir Martin Sorrell – done it all. Sir Richard Branson and all his brouhaha – not bothered; private company; as a maverick he can do as he likes! However in concert with angry shareholders I do care about general executive pay. So the likes of Kapoor (Reckitt), Gulliver (HSBC), Cutifani (Anglo), Ornskov (Shire), the directors of BP excluding Bob Dudley, I do care and object.  Why excluding Dudley? He’s a special case. He saved BP from virtual extinction. 

 

It is not looking good for BHS, with Mike Ashley looking as if he is out of the game. No doubt all will be revealed next week. Ending on a good note it appears, according to the Sunday Times that Tata Steel, especially in Port Talbot is becoming less of a loss making concern.

 

UK companies posting results – Monday – GVC GROUP, Tuesday – BP, BATS, STANDARD CHARTERED BANK, WHITBREAD, FOCUSRITE, PENRAIR, Wednesday – HENDERSON, BARCLAYS, HOME RETAIL, AMEC FOSTER, GLAXO SMITHKLINE, LSE, ANTOFAGASTA, Thursday – LLOYDS BANKING GROUP, TAYLOR WIMPEY, HARVEY NASH, AGGREKO, Friday – ASTRA ZENECA, RBS, AON

US companies posting interim results – Monday – XEROX, Tuesday – WHIRLPOOL, 3MS, eBAY, T-MOBILE (US), CORNING, FREEPORT MCMORAN, LOCKHEED MARTIN, HERSHEY, THOMSON-REUTERS, REYNOLDS AMERICAN, PROCTER & GAMBLE, JETBLUE, TWITTER, APPLE, AT&T, Wednesday – BGC, BOEING, UNITED TECHNOLOGIES, BOSTON SCIENTIFIC, BAKER HUGHES, GOODYEAR, PLAYPAL, FACEBOOK, DOLBY, Thursday – FORD, ZIMMER, CME, UPS, BRISTOL MYERS SQUIBB, ABBVIE, DUPONT, ALTRIA, AMGEN, GROUPON, LINKEDIN, PIXELWORKS, Friday – CHEVRON, EXXON MOBIL


Economic Data – Monday – UK Consumer Confidence, BBA Mortgage approvals, Tuesday – US Consumer Confidence, Wednesday – UK preliminary GDP, FOMC, Thursday – US Initial Jobless Claims, Friday EU unemployment.

 

 –
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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