TODAY’S FAYRE – Wednesday, 4th May 2016

Lying asleep between the strokes of night
I saw my love lean over my sad bed,
Pale as the duskiest lily’s leaf or head,
Smooth-skinned and dark, with bare throat made to bite,
Too wan for blushing and too warm for white,
But perfect-coloured without white or red.
And her lips opened amorously, and said –
I wist not what, saving one word – Delight.

And all her face was honey to my mouth,
And all her body pasture to mine eyes;
The long lithe arms and hotter hands than fire
The quivering flanks, hair smelling of the south,
The bright light feet, the splendid supple thighs
And glittering eyelids of my soul’s desire.



Algernon Charles Swinburne – poet – 1837-1909



Post the ‘Hillsborough Disaster’, Sheffield Wednesday FC was correctly severely criticised and censored for inadequate ground protection facilities, which contributed to the death of 96 Liverpool fans. However it is worth remembering that ‘The Owls’ were once a great football club with a massive following. They have won 4 league titles and 3 FA Cups. They were in the Premiership in 2000 for just one year. It would be good for football if this once proud club could plough its way through the ‘play-offs’ back in to the Premiership. No abuse now! I am talking about football, not disgraceful administrative errors!



So tomorrow Londoners vote for a new Mayor.  This has been an unpleasant campaign. Neither Sadiq Khan nor Zac Goldsmith have the personality or charisma of Boris Johnson or Ken Livingstone.  They were two powerful personalities, which attracted most Londoners to sit up, take note and vote. Mr Goldsmith has taken a little time to come in his spring coat against Mr Khan who was a very warm order to be elected in a city that is traditionally Labour, despite enjoying a Tory Mayor for 8 years who was universally liked. Zac Goldsmith looks as if he has come with a late rattle on the rails, thanks to internal Labour party divisions which have been widened by its controversial and politically unattractive leader, Jeremy Corbyn.  Does London want to be run by a Corbynistic Mayor?  I think not, but it is a distinct possibility! Londoners, you have been warned! No prizes for guessing who I shall be voting for! As for business and the city of London, the choice is a no-brainer, whilst London continues to attract wealthy investors.



Concerns over China’s growth and jingoistic rumblings from FED board members that a June rate Hike was very much on the agenda created sufficient uncertainty for investors to take some risk off the table on the Street of Dreams yesterday. The fact that oil prices had dipped and commodity prices were starting to show signs of anxiety gave credence to investors’ concerns.  Not surprisingly these facts damaged the mining and energy sectors, which had been the case in London a few hours earlier.



 The DOW closed down 0.78% with the S&P 500 easing by 0.87% and the NASDAQ by 1.13%.  Of those companies that reported yesterday Pfizer caught the eye adding over 4% in value. Today is an important day for economics, with the ADP index expected to show a gain of 196K jobs in the private sector last month, ahead of Friday’s Non-Farm payroll data. Also the antics of the US consumer is probably even more important.  So results from retailers from the likes of Walmart. Target, Abercrombie & Fitch, JC Penney, Nordstrom etc will be eagerly awaited.



Yesterday London’s FTSE was larruped by the desperate performance on the mining sector as previously mentioned, with Anglo American -12.7% and Glencore -8% at one point but closing only 4.5% lower, the most adversely affected during the session. Oil stocks also suffered and sadly Aberdeen asset Management performed poorly on falling assets under management – down 9%. Just Eat grabbed the ‘yellow jersey’ – up 7.1%.



However it was the performance of a few banks that was deeply depressing starting with ANZ in Australia – profits down 24% though its share price did recover.  Then UBS posted bad wealth management numbers which clattered the shares by 7.5% and finally HSBC did not please its acolytes, as profits eased by 14% and shares shed 1.65% in value, having at one point been lower by nearly 4%. One just gets the impression that many of these mature indices have pro-tem reached saturation point, until brighter news on the global growth front returns. I had to laugh with a degree of hysteria when ‘Vote Remain’ or ‘Vote Fear’ if you prefer blamed poor Markit manufacturing data on BREXIT threat. For the avoidance of doubt, manufacturing has been falling across the globe for some months.




Last night it was brought to my attention that Barclays had decided to offer 100% mortgages to those whose parents or friends would deposit 10% of the value of the house with the bank for 3 years. I know about the Bank of Mum and Dad and thoroughly approve – been there myself. I also know that for a decade Barclays relied heavily on investment banking (40-60% of profits).  Consequently the Bald Eagle surrendered high street dominance to HSBC, Lloyds and RBS. So this is an obvious gambit to attract new business.


However to offer 5.5 times salary with just a 3 year commitment on the 10% deposit is surely insanity.  Interest rates may remain low for another 2 years but they are not like door numbers. A 2-3% hike in the future – not impossible would bury many mortgagees.  Are we not potentially returning to the scene of Northern Rock, Bradford & Bingley etc! We don’t want the threat of that again, do we? Property prices are a problem, but the government must look for other means such as forcing local authorities to release land for building at reasonable prices for affordable housing.



This morning Siemens and Societe Generale posted encouraging results, the latter despite a wave of selling of banking stocks. AB InBev did not please their acolytes thanks to poor sales in South America, Mexico and the US.  Royal Dutch Shell posted a loss for the last quarter of $642 million on revenues of $48 billion, thanks to lower oil prices.  The CCS dropped from $4.8 billion to $0.8 billion.  The dividend was maintained at 47 cents a share. J Sainsbury saw a 13.8% drop in annual profits from £681 million to £587 million.  Sales totalled £25.8 billion. The dividend was cut marginally from 8.2p to 8.1p.  Costs cuts of £500 million are to be implemented. In the last year Sainsbury’s share price has rallied by 3.6% and since January 2016 by 18% (240p to 285p). In that period sales have fallen by 1.1% and like for like sales are down by 0.9%. Sainsbury has 601 supermarkets employing 28000 people.  Clothing sales grew by 8.5%.  







US companies posting interim results – Wednesday – TIME WARNER, TASER, ZYNGA, Thursday – KRAFT HEINZ, FRED’S, KELLOGG, EASTMAN KODAK, Friday – WEYERHAEUSER, ALLERGAN

Economic Data – Monday – Tuesday – UK PMI CONSTRUCTION, Wednesday – UK PMI SERVICES, ADP INDEX, Thursday – US INITIAL JOBLESS CLAIMS, Friday – US NON-FARM PAYROLLS (EST 210k)


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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