TODAY’S FAYRE

TODAY’S FAYRE – Tuesday, 17th May 2016

 

“As I walked out one evening,

Walking down Bristol Street,

The crowds upon the pavement

Were fields of harvest wheat. 

 

And down by the brimming river

I heard a lover sing

Under an arch of the railway:

‘Love has no ending. 

 

‘I’ll love you, dear, I’ll love you

Till China and Africa meet,

And the river jumps over the mountain

And the salmon sing in the street, 

 

‘I’ll love you till the ocean

Is folded and hung up to dry

And the seven stars go squawking

Like geese about the sky. 

 

‘The years shall run like rabbits,

For in my arms I hold

The Flower of the Ages,

And the first love of the world.’

 

 But all the clocks in the city

Began to whirr and chime:

‘O let not Time deceive you,

You cannot conquer Time. 

 

‘In the burrows of the Nightmare

Where Justice naked is,

Time watches from the shadow

And coughs when you would kiss.

 

 ‘In headaches and in worry

Vaguely life leaks away,

And Time will have his fancy

To-morrow or to-day.”

 

  WH Auden – poet – 1907-1973

 

Unless you are over the age of 60 or a cricket ‘nut’ the name of JJ Warr will mean very little to those who work in the City today. ‘JJ’ was the last of that breed that combined life as an amateur cricketer, captaining Middlesex in the 50s with a successful career as a bill broker with Union Discount and Clive Discount. He died last week aged 89.

‘JJ’ played 4 times for England as a robust fast medium bowler, which included a tour to Australia with FR Brown’s side in 1950. He holds the record for the worst debut bowling performance against the Aussies conceding 142 runs. This record wasn’t broken until 2009. He appeared regularly for the Gents v Players annual fixture 3-day match at Lord’s, until he retired. Anyone who knew him as he limped around the City in his silk top hat, remembers him for his charm and acute sense of humour. He was also a wonderful and gracious after dinner speakers of his generation – one of the great characters of the City of London. His like will never be seen again! RIP!

 

I wondered how long it would take Mayor Sadiq Khan to moan about Boris and blame him for plans he looks unlikely to deliver on housing! – Just over a week! Get on with it man! You should have done your spadework before promising the earth!

 

London underwent one of those nondescript sessions yesterday with very little happening, which resulted in the FTSE 100 adding a dozen points to 6151 with mining stocks leading the way. However New York saw matters in a slightly different light. With oil threatening to nudge towards $50 a barrel ($48.72), due to technical supply difficulties particularly in Nigeria and despite rather neutral ISM manufacturing data, the three main US indices put their best foot forward – DOW closing +1%, with the S&P 500 fully supportive +0.98% and the NASDAQ on the back of a 3.7% spurt in Apple shares cracked on adding 1.22%.

 

Why the rally in Apple? – the great sage of Omaha, well should I say his trusted cohorts in Berkshire Hathaway, made a rare sortie into tech shares, making a $1 billion investment. Apple shares have fallen 30% in the last year, with sales for the last quarter failing to pass muster, falling for the first time in 51 quarters! Buffett is known to be wary about tech companies – protests he knows nothing about them. He completely missed the tech bubble at the turn of the century. Well done him, as he almost certainly missed taking a bath in 2000-3. His only major tech investment has been in IBM – ‘Old Blue!’ It is thought that Charlie Munger and Marc Hamburg may have made the decision to buy this stake. They have full permission to act without referring. It is interesting to note that not long ago Carl Icahn divested himself of his significant shareholding in the world’s most popular brand, believing that growth had faltered.

 

Not surprisingly energy stocks were also very popular. The data in the US this week may have significant bearing, particularly CPI, Industrial production and Retail sales. Janet Yellen and her cohorts will be watching the data pot boil as she ruminates over a possible but unlikely rate hike next month. As we head towards the end of the earnings season, it is surely fair to say that results have been every average bordering on poor. The profitability of many FTSE 100 companies has fallen sharply on this time last year. It is just as well that the alternate asset classes remain unappetising.

 

Higher oil and commodity prices and a weaker Yen helped buoy markets in many parts of Asia – ASX +0.7% and NIKKEI +1.1%. Towards the end of the session the Hang Seng was also up 1.1%, though the Shanghai Composite was still 0.25% below the Plimsoll line. This morning on the back of New York performing with aplomb, the FTSE is up 55 points at 6200 at 9.15am. There were decent results from Vofafone – up 2.5%, but these have gone nowhere in the last year. The market is waiting for some strategic plan in media from Vittorio Colao. Of course paying off debt and returning funds to shareholders was important post the sale in Verizon for $82.5 billion, but Vodafone needs to be visionary. It was in 2000 that Sir Chris Gent, Vodafone then CEO shelled out €220 billion for Mannesmann incurring a huge debt mountain. Enterprise Inns, Land Securities and Taylor Wimpey also did not disappoint their acolytes.

 

This morning Bloomberg laid bare one of the great mysteries of the $13.4 trillion US Treasuries market has been solved after more than 41 years. The Treasury Department on Monday released a breakdown of Saudi Arabia’s holdings of U.S. debt, ending a longstanding policy of keeping the figures secret. The stockpile of the world’s biggest oil exporter stood at $116.8 billion as of March, up from $82.7 billion two years earlier, according to data disclosed in response to a Freedom-of-Information Act request filed by Bloomberg News. The sum ranks the kingdom among the top dozen foreign nations in terms of holdings of U.S. debt, and compares with China’s $1.2 trillion trove, and $1.1 trillion for Japan. This news on Saudi Arabia comes as little surprise considering that his country now has a budget deficit as against a surplus 20 years ago.

  UK companies posting results – Tuesday – VODAFONE, LAND SECURITIES, ENTERPRISE INNS, SPEEDY HIRE, PREMIER FOODS, Wednesday – BURBERRY, SAB MILLER, SSE, Thursday – THOS COOK, ROYAL MAIL, BOOKER, HARGREAVES LANSDOWN, MITCHELLS & BUTLER, 3iii, MERLIN ENTERTAINMENT, NATIONAL GRID

 

US companies posting interim results – Tuesday – TJK, Wednesday – AMERICAN EAGLE, TARGET, STAPLES, CISCO SYSTEMS, URBAN OUTFITTERS, Thursday – APOLLO, WAL-MART, APPLIED MATERIALS, ROSS STORES, GAP, Friday – FOOT LOCKER

Economic Data – Tuesday – UK CPI, US INDUSTRIAL PRODUCTION, Wednesday – UK EMPLOYMENT DATA, US FOMC MINUTES, Thursday – UK RETAIL SALES, US INITIAL JOBLESS CLAIMS, Friday – US EXISTING HOME SALES

  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 9AF | United Kingdom

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