TODAY’S FAYRE – Thursday, 5th May 2016

“Kneel down, fair Love, and fill thyself with tears,
Girdle thyself with sighing for a girth
Upon the sides of mirth,
Cover thy lips and eyelids, let thine ears
Be filled with rumour of people sorrowing;
Make thee soft raiment out of woven sighs
Upon the flesh to cleave,
Set pains therein and many a grievous thing,
And many sorrows after each his wise
For armlet and for gorget and for sleeve.

O Love’s lute heard about the lands of death,
Left hanged upon the trees that were therein;
O Love and Time and Sin,
Three singing mouths that mourn now under breath,
Three lovers, each one evil spoken of;
O smitten lips where through this voice of mine
Came softer with her praise;
Abide a little for our lady’s love.
The kisses of her mouth were more than wine,
And more than peace the passage of her days.”


Algernon Charles Swinburne – poet – 1837-1909




Against all the odds Donald Trump has swept aside all-comers in the GOP primaries and looks unassailable to be nominated as the Republican candidate for November’s Presidential Election. The Clinton Brand is looking a little tarnished; so Trump to be elected President is, perhaps, looking an unlikely but real possibility. What would that do for world trade and diplomacy?  Perhaps punters should buy some defence stocks – Lockheed Martin, General Dynamics, Raytheon etc? Taxation is likely to be cut and public expenditure increased.  If the UK decides to BREXIT, maybe a trade agreement will be easier to negotiate? Clinton is currently 1/3 to be the 46th President and Trump is 2/1 with Ladbrokes.  Maybe those odds will close in before too long!



Equities experienced another torrid session yesterday. Here in Europe there was little in the way of positive economic news to cheer investors. The High Street in the UK has proved to be a veritable jungle.  The fact that there is evidence of deflationary forces at work in food sold in supermarkets and clothing has not helped Sainsbury’s cause as Aldi & Lidl continue their stampede across the country. Sainsbury’s profits were down 13.8% and Mike Coupe’s management have taken the high risk route of adding Argos to its portfolio as another arrow to its rather weak bow. Shareholders were underwhelmed leaving the jury out, taking shares down 6.3% to 267.8p.  As for NEXT, Lord Wolfson only had tales of woe as he reported a drop in clothing sales by 4.7% in the first quarter, though the Directory business rose by 4.2%. These numbers, though depressing, were rather better than expected and shares rose by 3.5%.  However NEXT shares were £70 in February – down 25.4% to £52 yesterday. Royal Dutch Shell has been forced to make cuts in exploration despite oil and gas output rising by 16% but at depressed prices, presumably strategically making room for BG. Shares were down 2.1%




Now for scraps of good news! Imperial Brands, formerly known as Tobacco, is spreading its wings more widely and hopes to make inroads in Cuba, posted improved profits – up 18% with a 10% increase in dividend.  Shares have risen strongly in the last 2 weeks from 3571p to 3710p circa 4%. Paddy Power Betfair, despite an expensive Cheltenham, which incurred a loss of some £20 million saw profits up 16% in the first quarter. The FTSE 100 eased by 73 points to 6112.  Apart from sectors already mentioned, miners had a rough ride and banks remained out of favour.




On Wall Street the mood was sombre all day. Growth issues were creating cumuli nimbus clouds of concern, despite the appetite for a rate increase in June abating marginally. The ADP jobs index for the private sector for April was way short of expectation with 156k jobs created when 197k was the expected figure. That may not augur well for Friday’s non-farm payroll and employment data. The DOW closed down 0.56% dragging the S&P 500 down by 0.59% with the NASDAQ taking the greatest hit easier by 0.79%. Energy stocks were unpopular with oil and commodity stocks easing, though overnight crude oil is up to $44.69 a barrel.  Apple’s shares were down 1%, Intel down by 0.8%, though Facebook and Alphabet were up by 0.4%.



Tokyo remains closed for another Public holiday. However though Chinese PMI service sector reading was above the dreaded 50, a reading of 51.8 hardly made observers ecstatic. Rumblings about the strength of China’s banks were gathering momentum as were job vacancies for students leaving university. The ASX was just below the Plimsoll line towards the close -0.08%, perhaps due to good results from NAB whose profits were up 6.5% taking these shares up by 3%. The Shanghai Composite was down 0.11% and the Hang Seng by 0.27%.




BT posted 4th quarter pre-tax profits of £1.15 billion on a 6% increase in revenues to £5.59 billion.  Debt was up by 6% and the pension hole of circa £4.9 billion does not seem to be decreasing. BT intends to spend £6 billion in the next 3 years expanding broadband and 4G operations by 90% to 12 million users by 2020. BT intends to be less reliant on Openreach and CEO Gavin Patterson does not feel under pressure to split the company. He seems to have placated the regulator by offering greater access to other telecom operators.   The dividend allocated was 8p per share.



Wm Morrison posted a trading statement for the last 13 weeks to 1st May. Like-for-like* (LFL) sales excluding fuel were up 0.7% (up 1.2% including fuel). Total sales* excluding fuel were down 1.8% (down 0.9% including fuel), reflecting the impact of supermarket closures and exit of the M local chain. Online contributed 1.0% to LFL during the period. Fuel LFL was positive despite deflation of almost 11%.






US companies posting interim results – Thursday – ALIBABA, 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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