TODAY’S FAYRE – Tuesday, 10th May 2016


I imagine this midnight moment’s forest:
Something else is alive
Beside the clock’s loneliness
And this blank page where my fingers move.

Through the window I see no star:
Something more near
though deeper within darkness
Is entering the loneliness:

Cold, delicately as the dark snow
A fox’s nose touches twig, leaf;
Two eyes serve a movement, that now
And again now, and now, and now

Sets neat prints into the snow
Between trees, and warily a lame
Shadow lags by stump and in hollow
Of a body that is bold to come

Across clearings, an eye,
A widening deepening greenness,
Brilliantly, concentratedly,
Coming about its own business

Till, with a sudden sharp hot stink of fox,
It enters the dark hole of the head.
The window is starless still; the clock ticks,
The page is printed.”


Ted Hughes – poet laureate– 1837-1909


Andy Murray is going to start running out of options for coaches as he ditches Amelie Mauresmo ahead of the Paris Open. Sorry I don’t buy the paternal/maternal and travel issues. They clearly aren’t getting on. I suspect our great tennis champion has become tricky to work with again.


The temperature over the EU referendum debate has risen sharply as Messrs Cameron & Johnson hurl veiled insults at each other over the threat of war and security issues.  Not content with that spat the PM also vented his spleen on Michael Gove. We were given a splendid European history lesson by the PM, going back to the Franco-Prussian and Napoleonic wars – fascinating stuff!  Mr Cameron seems to have all the picture cards in his hand, but one wonders if he is playing them all too early. Yesterday he had good support from UN military officials who agreed that the EU has contributed greatly towards peace in Europe since 1945. Many of us disagree and commend NATO’S and the UN’S efforts.  When called upon to stand up and be counted in Kosovo 1995-8, the EU bottled it! – Nowhere to be seen.  It was left to the US to tidy the unsavoury genocide of 300,000 innocent citizens. Few genuinely believe that the EU will prevent WW3, if Russian or North Korea decide otherwise.


The media and politicians seek to raise their game over the ‘Panama Papers.More than 200,000 offshore account details went online at 7pm last night, which sparked fresh calls for action from the UK government against offshore tax avoidance.  I am sure the drains will be hauled up but unless all global governments start to sing from the same hymn sheet, it will prove very hard to stop clandestine squirreling.


It is thought that West Ham are prepared to offer £25 million for Arsenal’s Theo Walcott.  Should that be the case, Arsene Wenger should not waste a nanno-second in accepting Bilic’s offer for his underperforming injury prone forward!


In the next day or so, it is going to become fairly obvious that the UK’s economy is not as buoyant as it was 18 months ago. On Thursday the BOE Inflation Report is likely to lower GDP for 2016 from 2.2% to 2%.  There is always a time-lag for the BOE figures; so don’t be surprised if some senior independent economists take their forecast below the 2% threshold before the Bank’s next reading.  We should attempt to carefully think why this fall in economic activity has transpired. Firstly crude oil is up from 37 a barrel to $44 a barrel – an increase of nearly 19% – so since petrol has gone up from 99p a litre to $112p it is material. Though some people are starting to benefit from the minimum wage going up that will not have filtered through to the data yet.  Sadly wage inflation is derisory – circa 2.2%.  Also pension contributions having to be increased or making personal provision for pensions is a new phenomenon for many. To add to his mesmeric compendium is the indisputable fact that the value of the Pound has declined in concert with declining PMI data particularly construction and falling retail sales.


I think George Osborne, supportive though most people are, should have introduced his severe austerity packages in 2013-2014, when the economy was strong and when tax cuts were being implemented.  He may just have missed the boat – hence the expected fall in growth.


It was another lack-lustre session in Europe yesterday, well-illustrated by the inertia experienced in London, where the FTSE 100 eased by 18 points to 6114, with mining stocks in poll position driving down its sector by an average of 5%.  Oils were also out of sorts, thanks to a drop in the price of crude.  Drugs and the tech sector fought manfully to keep the main index above water – up 1.5% each, but the appetite for risk prevailed – take heed from my opening paragraph!


The Street of Dreams had little to say for itself yesterday as the DOW ended the session down 0.20% with the S&P adding 0.08% and the NASDAQ +0.30% in listless trading where energy stocks surrendered ground and healthcare thrived as it had done in London. We await some of the retail companies to present their credentials before standing finally in judgement of 2nd quarter earnings. They could be key but my heart does not currently warm to the sector. The US doughnut company Krispy Kreme has agreed to be bought by Kenco coffee owner, JAB Holding, for $1.35bn (£935m). The German investment firm JAB also owns Peets and Douwe Egberts, as well as the luxury shoe firm Jimmy Choo and beauty firm Coty.


In Asia further dispiriting Chinese CPI and PPI data followed yesterday’s anaemic import/export numbers.  CPI on an annualised basis came in at 2.3%, but Producer Prices continued to fall around the factory gates – down 3.4%, which I suppose was marginally better than the -3.8% forecasted. Chinese equities were not uplifted by this news. Shanghai Composite equity acolytes were rather ‘non-plus by this data, leaving this index lower by 0.60% towards lunch and the Hang Seng down by 0.20%.  The Nikkei buoyed by a weak Yen was up by a short 2% towards the close.  The ASX closed up 0.36%.


Martyn Dodgson, formerly of Deutsche Bank and Andrew Hind, a former advisor to Sir Phillip Green, were found guilty yesterday of insider trading.  3 others, however, were found not guilty.  The battle grounds have now been set prior to Sir Phillip Green’s visit to the two Parliamentary Select Committees he is to give evidence to.  At best they will be confrontational and fiery. It transpired that the Pension Trustees of BHS only discovered about the sale of BHS through the media.  Not good but that does not excuse them from not flagging up the pension black hole of a company that was making no money. What theatre awaits us!



Saudi Arabia is considering the possibility of a sale of 5% of Aramco ($20 billion) valued at $400 billion to cut some of its deficit. The investment banks and professional advisors will be salivating at the prospect of gargantuan fees.  However I suggest that this possible IPO is no ‘slam-dunk!’ So much of the voting rights of this company remain in Saudi and Saudi remains a political hotpot, unlike Qatar and Kuwait which are stable. So international investors may be circumspect. Ali –Al Naimi will be replaced by Khaled al-Faleh (formerly health minister) as Saudi oil minister.  It will take him some time to establish himself with the same authority as his predecessor.


Carolyn McCall was in robust form in presenting what she thought were decent numbers for EasyJet for the half year – a loss of £23 million on revenues of £1.77 billion.  The loss was down to a weaker Pound.  A loss of £5 million was incurred at the same time last year.  Forward bookings were encouraging and sales were up 7% and EasyJet is going for 8% growth this year. Credit Suisse posted a loss this quarter but Tidjane Thiam was pleased with progress in Asia. ThyssenKrupp, after a disappointing quarter downgraded its profit forecast for the year.




US companies posting interim results – Tuesday – ALLERGAN, DEAN FOODS, WALT DISNEY, Wednesday – MACY’S, JACK-IN-THE-BOX, Friday – JC PENNEY




David Buik

Market Commentator – Panmure Gordon & Co


+44 (0)20 7886 2775

Mobile – 0044 7788 144 877

Panmure Gordon & Co

One New Change | London | EC4M

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