Monthly Archives: June 2016


We have all inhaled the intoxicating fumes of this relief rally from the previous two days (6% rally) taking us back to above 22nd June level, that today, not surprisingly is a bit of an anti-climax. Trading conditions are sepulchral. It is as if fund managers have called for the Rennies’ – such is the level of trading indigestion. Volumes are thin and there are limited reasons for asking the market to select another gear. This is an old fashioned relief rally – pure and simple. In pure terms the FTSE from 23rd June fell 9% to its day ‘low’ to up 9% as of this morning. It just goes to show how political hysteria and economic uncertainty can unnecessarily damage markets.


Today the FTSE 100 has been bobbing around either side of par. At 2.40pm the FTSE 100 is up 15 at 6375. The DOW has just opened and is 40 points to the good. Materials, utilities, health care and consumers have made modest gains and mining has seen a smidgen of profit taking. Of the companies that have reported today– SERCO is up 2.5% as CEO Rupert Soames continues to show managerial skills. Tullow has enjoyed a decent bounce on a good trading statement and John Wood, which was quite badly trolleyed at the opening with profits likely to be 205 lower (already priced in) was up 0.75%. We need some news flow to drive markets now that BREXIT is no longer the ogre it was a week ago.



What a vile occupational hazard party politics are. After the mayhem of the EU referendum, which saw the ‘LEAVE’ vote prevail after a frenetically unpleasant campaign when neither side acquitted themselves with much credit, it looked as though it would be a ‘straight’ fight between Boris Johnson, aided and abetted by Michael Gove and Theresa May, the current Home Secretary. There would almost certainly be apologetic bids made by Stephen Crabb, Sajid Javid, Liam Fox, Andrea Leadsom and maybe Jeremy Hunt. At 9.00am this morning, with a few hours to go before nominations were closed, not many would have predicted the drama that was to unfold.


It transpired over night that Sky News had acquired a copy of a private email from Sarah Vine, wife of Michael Gove, which concluded that the Justice Secretary found himself unable to support a Boris Johnson nomination. Many suspect that this email was surreptitiously leaked – perish the thought! May I wash my mouth out with soap and water! Anyway despite years of protestations from Michael Gove that he had no wish to be PM, he threw his hat in to the ring. 10 minutes before the witching hour the member for Uxbridge announced he would not be standing in the leadership contest. WOW! Why? Never underestimate Boris’s historical and political antennae.  Once he knew that Mr Gove, his running mate in the LEAVE campaign had stabbed him by saying he was unable to support his candidacy, it did not take the brains of a rocket scientist to work out some of the ramifications.


Clearly Messrs Cameron and Osborne are seriously miffed at the outcome of the referendum and we know revenge is best served up cold.  They knew perfectly well that there was still a majority of TORY REMAIN MPS, who wanted to REMAIN. So the smoked filled corridors of the past will have been full of intrigue. With Gove not supporting Johnson, the hierarchy would have known that it was unlikely that Boris would have found sufficient grass root support from MPS to mount an effective campaign, even though he knew that if the vote was open to the country, he was a ‘slam-dunk’. So why embarrass yourself unnecessarily. So he left his supporters gob-smacked with Nadine Dorries in tears, as he announced he was a non-runner.  Clever boy!  He dodged that exocet missile very adroitly. Boris is young and his day will come. Also without being unkind, Boris has led a colourful life and his privacy may not have stood up to the closest of scrutiny – perhaps it would but does he need the aggravation at this time?  But one wonders what skulduggery went on behind the scenes?  David Cameron and George Osborne are still incandescent with rage, having misjudged the mood of the country and the appetite to LEAVE.  They now realise that this referendum was all about social justice and little to do with the EU.


The Tories are always a law unto themselves.  They should have a BREXITER PM, which is what the electorate wants. So it should probably be Gove; if not Liam Fox.  I don’t think Fox will muster sufficient following.  Perhaps Andre Leadsom has greater support than many considered. Theresa May could well be the best candidate to unify the party and the country.  But she is not an obvious BREXITER. However I suspect the Tory hierarchy will be desperate for Mrs May to win in order that some deal a la Norway can be cobbled together with the EU.  This would be a real fudge job and would displease the grass root blue collar worker as well as UKIP supporters. One suspects that Mr Cameron will suffer acutely from convenient amnesia. This contest needs to be drawn to a speedy conclusion. The government looks rudderless.  This is not a healthy state of affairs and the opposition are little more than an embarrassment.


TODAY’S FAYRE –Thursday, 30th June 2016


  “O for a Muse of fire, that would ascend

The brightest heaven of invention,

A kingdom for a stage, princes to act

And monarchs to behold the swelling scene!

Then should the warlike Harry, like himself,

Assume the port of Mars; and at his heels,

Leash’d in like hounds, should famine, sword and fire

Crouch for employment. But pardon, and gentles all,

The flat unraised spirits that have dared

On this unworthy scaffold to bring forth

So great an object: can this cockpit hold

The vasty fields of France? Or may we cram

Within this wooden O the very casques

That did affright the air at Agincourt?

O, pardon! Since a crooked figure may

Attest in little place a million;

And let us, ciphers to this great accompt,

On your imaginary forces work.

Suppose within the girdle of these walls

Are now confined two mighty monarchies,

Whose high upreared and abutting fronts

The perilous narrow ocean parts asunder:

Piece out our imperfections with your thoughts;

Into a thousand parts divide on man.”


  William Shakespeare – poet & playwright– 1564-1616


Let’s draw a line under England’s abject performance in Nice against Iceland on Monday. I just thought I would lighten up and tell you a story about Roy Hodgson.  As you know I am a nutty Fulham fan. I’ll give Roy his due; he did a great job for Fulham – saved us from relegation and managed us in to the Europa final against Atletico Madrid. A cab driver friend of mine – Gary Chivers, the old Chelsea player, used to do a clipboard job for Roy on a Saturday afternoon plotting a player’s path during a game.  When Roy went to Liverpool, Gary was sacked by Mark Hughes as he understandably wanted his own people appointed.

    I asked Gary what Roy was like.  He was unequivocal in saying he was a delightful fellow whom the players really respected.  BUT he said, he was a good manager of a VERY average side. Gary said he wouldn’t last 6 months at Liverpool as managing players with flair was not his metier! He was right and that about says it all!  The same applied for England – a very moderate side! So glad for him that he was paid £3.25 million per annum for the last 3 years or so!!


On Tuesday morning I listened to an excellent presentation by Ben Page of IPSOS/MORI on the aftermath of the EU Referendum. Apart from the fact that the polls got it wrong again, there were two really interesting pieces of data. Firstly up until 4 months before the campaign only about 6% of the electorate showed much in the way of interest and in the weeks leading up to the vote, despite the ‘bally-who’ and bile only about 30% of the electorate was passionate about the outcome.


Consequently it is becoming increasingly clear that the REFERENDUM vote and its outcome had little to do with EU membership. It was a social inequality protest vote! London, Scotland and a couple of cities against the rest of the country, which has seen the rich get richer and the poor get poorer So any thought of another referendum for those suffering from sower grapes may find that there will be massive resistance to that suggestion, despite 4 million people signing a petition. The country will remain moribund and drowning in inertia until there is a new leader. BJ and Theresa May were the early installed favourites with Messrs Fox, Leadsom and Crabb having thrown their hat in to the ring or have been flagged up as contenders. Boris would be the people’s choice but many of their MPS seem reluctant to support him for treachery. Theresa May was not an obvious BREXITER. However she and the reluctant Michael Gove would be seen as unifiers. I suspect that had Sarah Vine’s email not hit the public domain Michael Gove would have remained silence, having always protested his lack of interest. The sooner someone is elected, the better for the country.


Well what comes around goes around! – Or does it? Certainly the FTSE 100 (+219 points 3.6% to 6360) has regained all its poise since 22nd June 2016, though for obvious reason the FTSE 250, which is more of a barometer of UK economic activity is still languishing 3% below pre BREXIT levels. Miners (Dollar related) cracked on as did some drug stocks. Persimmon, Barratt and others rallied between 6-9% – hopelessly oversold. Banks perked up a bit yesterday, but are likely to remain in the doldrums for some months. Equity markets, endorsed by a decent run on the rails by Wall Street have behaved entirely logically. Yesterday the three main indices added between 1.5% and 1.8%. However the Pound may well turn out to be the main barometer of economic progress. Personally I am much more inclined to keep an eye on its progress than any other indicator.


I must confess to being distraught that the pro-REMAIN press and media have been so negative in helping galvanise the country to meet the challenges of the future, which democracy has demanded. THIS IS FACT – We, in this country, need to stop talking recession in 4th quarter and get cracking to make this brave new dawn work. If the EU and UK give up the ghost there will be 500 million people will be incandescent with rage that the powers that be have made insufficient effort to make helpful contingency plans plus the required report. It is only 4 months ago that the Chancellor was extolling the virtues of the UK’S economy. So BREXIT is responsible for its total collapse? I am not buying that.


J-C Juncker and Tijesselbloem can bellow or blow raspberries at us as long as they like. Of course the EU seeks solidarity. However what is as plain to me as the nose on the end of my ugly face is that the people of UK have to eat, as do those in Europe; so to cut off one’s nose to spite one’s face strikes me as an act of folly. As far as the City of London is concerned the detractors will learn that after a few bumps along the way, there is 70 years of infrastructure in London. If Frankfurt, Paris or Dublin thinks they can usurp London’ prowess, dream on! It would take 20 years to build an adequate infrastructure to compete with London. Also MiFID2 would provide a “safety valve” that would allow the City to sell services into the EU from 2018. Also other EU countries, which currently ‘passported’ services into Britain, would also need to strike a deal and added: “Passporting” is not only a negotiable issue but is a two way issue. So a change in attitude is a pre-requisite! Let no one be in any doubt the EU has major problems – far greater than the UK’S – none more than the state of their banking sector, which is probably undercapitalised to the tune of €300 billion.


This morning the FTSE decided to consolidate and at 10.35am was up 5 points at 6365. Serco, John Wood and Tullow posted fairly neutral results. It’s the politics that are grabbing all the headlines today. I was amused to hear that Goldman Sachs was reviewing its ties with Sir Philip Green. Again his comments to Frank Field at the Select Committee hearing did his situation little credit. I think only a gargantuan cheque will deliver him out of the house of bondage!

 UK companies posting numbers – Thursday – Tullow, John Wood, Serco, Friday – Bellzone Mining

   US companies posting interim results this week – Thursday – ConAgra, Darden Restaurants, Constellation Brands, Friday – Ford (sales)     Economic data – Thursday – UK GDP final, Friday – US PMI manufacturing  

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    


As PM David Cameron sat down this morning to his first Cabinet meeting since that fateful rout on Thursday of ‘REMAIN’, my diseased ridden mind is working overtime in thinking that the PM and the Chancellor, who did really well soothing markets pro-tem ahead of the opening, are in the process of playing an absolute blinder in preventing ‘LEAVE’ and particularly Boris Johnson from officially formulating policies under the BREXIT banner. ‘LEAVE’ really must make plans to articulate the policies promised and attempt at a time table to implement them. How clever of the ‘Bullingdon Club’ to play ‘stone-wall Jackson’ tactics, which leaves the BJ camp powerless to satisfy or encourage their acolytes, despite the fact that ‘LEAVE’ seem split in terms of its commitment to the electorate. As I said earlier in the day, it would come as no surprise to me if Article 50 never was invoked. The only person who can trigger Article 50 is the PM.


I suspect George Osborne, having set down his REMAIN stall cannot expect to stay on as Chancellor or run as PM, despite the fact that he has easily the most acute political brain in Parliament. How could he be expected to implement ‘LEAVE’ policies unless there is a clever ruse to agree a free market agreement with the EU in the fullness of time? That would put the cat amongst the pigeons.


Initially Chancellor Osborne’s comments soothed the market’s furrowed brow, but the calming effect started to wear off a couple of hours ago. At 2.50am the FTSE 100 was down 2% – 122 points at 6017. The banks have continued to be clattered – Barclays down 15.5%, RBS down 15% and Lloyds down 9%. Even though these banks’ exposure to the EU in terms of passport requirements is minimal, investors have vented their spleens. RBS and Lloyds are all but domestic and Barclays’ greatest exposure outside the UK is in North America and Asia. There is also concern that if there is a recession banks are exposed to mortgage lending. Well I would say it’s up to the government to make sure there is sufficient infrastructure and stimulus spending to make sure there is no recession or that it is very shallow.


To add insult to injury, house builders have been friendless in the ring – in fact investors have been hostile – Persimmon and Barratt both down 20%. Land Securities are 10% light and easyJet has received the most vituperative treatment – down 23%. On Friday equities lost $2 trillion in value globally. The FTSE 250 has fallen 6.25% and the AIM by 35. The Pound has experienced a torrid session – Cable $1.32 and Sterling against the Euro has tanked €/£ 1.19. The fact that many FTSE 100 stocks (65%) account for their earnings in Dollars has prevented the FTSE from falling lower – Mining, oil, tobacco, drugs, cyclical stocks like Unilever and banks (HSBC). In the past two days the FTSE has fallen about 3.2% BUT on a Dollar related basis it is down markedly – the FTSE has fallen 17.4%!!  THE DAX has eased by 2.3% and the CAC by 2.7%. The DOW is down 1.5% – 250 points at 3.15pm


TODAY’S FAYRE – Monday, 27th June 2016

  Now entertain conjecture of a time

When creeping murmur and the poring dark

Fills the wide vessel of the universe.

From camp to camp through the foul womb of night

The hum of either army stilly sounds,

That the fixed sentinels almost receive

The secret whispers of each other’s watch:

Fire answers fire, and through their paly flames

Each battle sees the other’s umber’d face;

Steed threatens steed, in high and boastful neighs

Piercing the night’s dull ear, and from the tents

The armourers, accomplishing the knights,

With busy hammers closing rivets up, Give dreadful note of preparation:

The country cocks do crow, the clocks do toll,

And the third hour of drowsy morning name.

Proud of their numbers and secure in soul,

The confident and over-lusty French Do the low-rated English play at dice;

And chide the cripple tardy-gaited night

Who, like a foul and ugly witch, doth limp

So tediously away.”


William Shakespeare – poet & playwright – 1874-1963


The people have spoken! However it appears that the intellectual cognoscenti do not accept the decision that the UK should leave the EU with grace! One can accept that the EU officials and constituent members are miffed, annoyed and disappointed, but that frankly is just too bad. However I very much get the impression that notice on Article 50 is unlikely to be invoked for at least 3 months and some are saying, don’t be surprised if it never is. Why some luminaries believe that a compromise over the prickly issues with the EU will be found. I find that hard to believe, as I believe that the EU is not really interested in reform, but I live in hope.


The UK and Europe need to find a formula to work in harmony. There is no need for an ugly divorce. We love Europe. It’s just that we have a problem with EU governance. Let me make my own personal whinge. I thought Lord Jonathan Hill resigning was petulant and premature. His position may have been invidious in the long term, but just because he was amazed and disappointed, there was no need for him to throw his toys out of his pram. And as for implying London was more or less finishes as a serious financial contributor on the international stage; well that borders on irresponsible.


The UK political map has looked like a little like post Waterloo in 1815 – metaphorical carnage! I can cope with a rudderless opposition, not that it is very healthy, but a government that seems moribund? WOW! PM Cameron, where are you. Stability will not return until there is evidence of leadership. George Osborne – The silence has been deafening. So his appearance before the markets opened was a welcome tonic. It is obvious that he has been diligent since Friday’s momentous news and it became more than evident when he made a statement before the opening that was clear, succinct and reassuring. It appears there will be no emergency budget and that a stimulus package to prevent the UK economy form going in to recession will be introduced in the autumn. His performance was that of a statesman. He was obviously fully in synch with Mark Carney. The banks were in good shape, relatively speaking with ten times more capital. Contingency plans had been made in the eventuality of BREXIT, which he clearly never countenanced. There would be more QE if required. UK equities liked the patter of chat.


Initially the futures market this morning said that the FTSE would lose 180 points at the opening before his comments. Thanks to Osborne’s calming intervention the FTSE opened up down 50! The Pound rallied to $1.3436. The FTSE is now down 55 at 6085 at 9.10am and the Pound is stuck at its current level of $1.3415. Banks have been clattered despite the Chancellor’s comments. On presupposes that a fall in growth and GDP will adversely affect that sector – RBS -12%, Barclays -10%, Lloyds -7.5% with there being a possibility that that RBS & Lloyds will remain incarcerated indefinitely. House builders have been clattered – Persimmon -9% and Barratt -.6.5%. easyJet has been larruped – down 15%. There will be plenty of volatility for some weeks to come.


UK companies posting numbers – Porvair, One Media, Tuesday – ULS Technology, Ocado, Wednesday – Essentra, Thursday – Tullow, John Wood, Serco, Friday – Bellzone Mining



US companies posting interim results this week – Tuesday – Carnival, Barnes & Noble, Nike, Wednesday – General Mills , Monsanto, Thursday – ConAgra, Darden Restaurants, Constellation Brands, Friday – Ford (sales)



Economic data – Monday – US M3 money supply, Tuesday – US GDP & Consumer Confidence. Wednesday – Mortgage approvals and BOE FPC Report, Thursday – UK GDP final, Friday – US PMI manufacturing



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


TODAY’S FAYRE –Sunday, 26th June 2016


Once more unto the breach, dear friends, once more;

Or close the wall up with our English dead.

In peace there’s nothing so becomes a man

As modest stillness and humility:

But when the blast of war blows in our ears,

Then imitate the action of the tiger;

Stiffen the sinews, summon up the blood,

Disguise fair nature with hard-favour’d rage;

Then lend the eye a terrible aspect;

Let pry through the portage of the head

Like the brass cannon; let the brow o’erwhelm it

As fearfully as doth a galled rock

O’erhang and jutty his confounded base,

Swill’d with the wild and wasteful ocean.”



William Shakespeare – poet & playwright– 1564-1616



It was a staggering week in more ways than one.  Setting the Referendum aside, on the sport front it was just amazing! Wales (3 million pop) beating Northern Ireland (1.8 million pop) 1-0, heading for quarter finals.  What an incredible effort – a terrible game but so exciting!  England’s crushing T-20 win over Sri Lanka by 10 wickets with centuries for Hales and Roy. Then, what an achievement by England ‘Down Under’ beating Australia by a very skinny margin 44-40 in a pulsating game to clinch the series 0-3.  Coach Eddie Jones is a wizard. However I imagine the language was fairly ripe as he admonished his side for conceding 40 points in a test match!  Finally Anthony Joshua looked invincible retaining his IBF Heavyweight title, clinically knocking his opponent out in the 7th round.  He has won all his 17 fights with a KO!


There was great deal of moaning and groaning on television as to how dispirited the young were that UK had voted to ‘LEAVE’ the EU.  It was made clear that 75% of those between the ages of 18 and 25 had voted to remain.  What a pity only 43% of that category could be bothered to go to the polls to cast their vote! What do they have to say for themselves?


What is it with M/S Sturgeon that she is so obsessed with membership of the EU?  Scotland sells some whisky and some defence products to these members and the EU steal their fish. What am I missing? I need educating.  Is it just her Anglo-phobia? Scotland cannot afford independence – no BOE/Regulation, no Pound and scant oil revenues.


It would unrealistic to think that J-C Juncker would greet the news of the UK’S forthcoming withdrawal from the EU with any degree of relish, sorrow or surprise. However his behaviour has been nothing short of boorish, unpleasant and downright rude. He has always been antagonistic towards the UK. He has clearly never majored in diplomacy. Juncker dismissed the possibility of an amicable divorce with disdain, which was probably uncalled for, since a smooth transition is desirable. I don’t know the fellow but he strikes me as petulant and the sooner his tenor as EC President is terminated, for all concerned, the better. PM Cameron, I always felt, was on the back foot with this unpleasant Machiavellian bureaucrat. Of course, David Cameron made a credible attempt to have him removed from office, but valiantly failed. So perhaps it was unrealistic to expect a sympathetic hearing.  Conversely the French European Commissioner for Economic Affairs Pierre Moscovichi was the soul of discretion, balanced and pragmatic. He encouraged the possibility of sensible negotiations, reminding everyone that the UK was still in Europe. The person who has really come up trumps has been the German Chancellor – Angela Merkel.  She has insisted that the parting of the ways must be conducted in a good natured manner.


I was less than surprised and understandably that the 6 original EU members’ foreign ministers let it be known that they want the UK to trigger the two year notice period under Article 50 sooner rather than in a few months’ time when a leader to succeed David Cameron has been elected. Apparently the UK’s position in the EU cannot start to be unwound until notice has been officially served by our PM.


Big business and London has not taken the decision of the people at all well. The ‘doom & gloom’ rhetoric has not really abated.  However it is imperative that contingency plans to implement the changes promised by the ‘Leave’ campaign become rather more transparent than they have to date. The country is now split dangerously wide open and it is essential that it is brought together again by strong leadership. Those who voted ‘LEAVE’ must now provide some clear evidence of a solid plan for change. Like it or not, the mood in many quarters in negative. It is imperative that the outlook becomes upbeat again. Voters require tender loving care.  The government has been wrong-footed and realistically it will take time to implement changes and elect a new PM. 


Notwithstanding all these challenges government must not become moribund until October. Thought must be immediately given to new trade agreements, which will need to be negotiated.   I was so chuffed to hear Lord Digby Jones so upbeat about the future on BBC Breakfast television yesterday. He was a breath of fresh air. I was dispirited to hear so much negative comment. A good amount of TLC is a perquisite for all!  Of course President Obama was wonderfully reassuring with his confirmation that the UK goes to the back of the queue – the special relationship! Daniel Hannan slightly surprised me with his stance of migration, saying that it was unlikely that the numbers would diminish. Unless I misinterpreted his comments that may not sit well with voters.


Friday was a bizarre day in London dominated by gargantuan waves of volatility unprecedented since the 2008/9 credit crisis.  Some blame for the apocalyptic hysteria, which created the tsunami waves of volatility must be attributed to the establishment for excessive negative rhetoric and dire warnings.   The initial market reaction was mitigated by the fact that the pound and stock market had risen strongly earlier this week in anticipation of a Remain victory. The pound and FTSE 100 reached £1.50 and 6,400 on Thursday night. After sharp falls – FTSE down 549 points at 5788 and the Pound being clattered to $1.35, the market regained some composure. During the day the pound rallied to touch $1.40 again before falling back to $1.36. The performance of the FTSE 100 was even more remarkable in the circumstances as it recovered during the day to a high of 6,232 and a close of 6,138.


Looking more closely at FTSE 100 there was a significant divergence in the index. Twenty seven shares rose by an average of 2.85%, while seventy three shares fell by an average of 8.82%. The winners were mostly large international companies with relatively small proportions of their revenues in Sterling and some gold mining stocks. The losers included property, construction and travel companies and the major banks and wealth managers. At one point Barclays was down 30% and Lloyds Banking group by 20%.  They made modest recoveries.  The likes of Persimmon and Barratt (between 20% and 40%) were meted out desperate treatment, based on thoughts the domestic economy would collapse – such conjecture! At one point Aberdeen Asset Management was down 32% ending the session easier by just 11%. The FTSE 250 and the FTSE AIM market fared rather worse – down 7% and 3% respectively. Gold rallied by 4.7% – flight to quality – Good Old Soros! Bond yields collapsed with 10-year gilts yielding just 1.08%. 


In New York on Friday banks suffered ‘the slings and arrows of outrageous fortune’ due to their exposure to volatility – down between 4% and 8%.  Stress tests have been tough and passed. Full marks, also to Governor Carney for his deft handling of Friday’s shock news.  He was very statesman-like in reassuring the market about liquidity and the fact that the banks had taken on board £130 billion of extra capital in recent years. Some may be worried by Moody’s threatening to downgrade the UK’s gilts from its AAA status. I think we need to be sanguine.  Their track record at best is moderate – Sub-prime lending?  They never sniffed it!  Finally I suspect that all Central banks will be on notice to increase QE or other stimulus packages if required. Volatility will prevail, but markets should calm down.  It’s the health of the UK economy in general that will require help rather than stock markets of foreign exchange.


UK companies posting numbers – Porvair, One Media, Tuesday – ULS Technology, Ocado, Wednesday – Essentra, Thursday – Tullow, John Wood, Serco, Friday – Bellzone Mining



US companies posting interim results this week – Tuesday – Carnival, Barnes & Noble, Nike, Wednesday – General Mills , Monsanto, Thursday – ConAgra, Darden Restaurants, Constellation Brands, Friday – Ford (sales)



Economic data – Monday – US M3 money supply, Tuesday – US GDP & Consumer Confidence. Wednesday – Mortgage approvals and BOE FPC Report, Thursday – UK GDP final, Friday – US PMI manufacturing



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


Everyone who knows me makes allowances for the fact that I am older than God.  So with that kind of preamble it goes without saying that I have witnessed quite a few upheavals in my 53 years in the City of London. Yesterday’s ‘LEAVE’ vote was the most dramatic political landmark this country has witnessed since the UK electorate booted Winston Churchill, our war time hero in to the long grass in 1945 as reaction to the Baldwin/McDonald era post the depression.


Last night the market suggested that a ‘REMAIN’ vote was a ‘slam dunk!’ The Pound had rallied from $1.42 to $1.50.  The FTSE had crept up a hundred odd points during the week. The Bookies said that ‘REMAIN’ was ‘nailed on.’  The Polls were not quite as ebullient.  Clearly the hedge funds and funds had paid for their own private polls; otherwise their chilled-out stance towards the market could only have been described as irresponsible.    So the early results in Newcastle and Sunderland really put the ‘cat amongst the pigeons!’ The Pound fell like a stone from $150 to $1.35 just after midnight without touching the sides.  It has recovered a little poise to be down about 7% at $1.3750. When the FTSE opened it fell by 549 points to 5788.  However it has recovered to be down 235 points at 6180 at 2.45pm.  There were initially some vituperative movements with Barclays down 30% and Lloyds easier by 20%, recovering to be down just by about 20% and 17% respectively. House builders Persimmon and Taylor Wimpey easier by 30% and 40% respectively – now down 24% and 26%. ITV was 215p last night.  It fell this am to 148p before recovering to 178p.  All these singled out stocks were almost certainly the subject of programme trades – hence the breath taking and vituperative ‘fall-out’ of these share values, bearing little resemblance to reality.  Why a share like Land Securities should lose 18% I will never know. The DAX fell 8% and the CAC 7% – so the market knows of Europe’s concern and the adverse effect BREXIT is purported to have.  There is also no doubt that the toxic rhetoric from both sides of the divide particularly from project fear has exacerbated the steepness of the falls.


The best news today came in the form of pearls of wisdom and philosophical gems from the lips of the BOE Governor Mark Carney, who reassured the market in the most statesmanlike manner that the BOE was ahead of the curve with its contingency plans in the event of BREXIT.  He told us that banks had raised £130 billion of extra capital and that there was plenty of extra liquidity.  It appears that Standard & Poor are threatening to cut the UK’s debt rating from its AAA rating.  At 3.20am the DOW is down 380 points – 2.1%


TODAY’S FAYRE – Wednesday, 22nd June 2016


  “I had for my winter evening walk- 

No one at all with whom to talk,

But I had the cottages in a row

Up to their shining eyes in snow.


And I thought I had the folk within:

I had the sound of a violin;

I had a glimpse through curtain laces

Of youthful forms and youthful faces.


I had such company outward bound.

I went till there were no cottages found.

I turned and repented, but coming back

I saw no window but that was black.


Over the snow my creaking feet

Disturbed the slumbering village street

Like profanation, by your leave,

At ten o’clock of a winter eve.”


Robert Frost – poet – 1874-1963

  Those like me who have been relentless in their quest to see the UK restored to its previous independent glory in today’s EU Referendum will surely know their fate in the small hours this morning. This has been a tasteless, bad tempered and graceless campaign. Perhaps it was naïve of me to expect anything else. However it appears that markets are right behind a ‘REMAIN’ victory – a little presumptuous – but perhaps some the private polls conducted have provided irrefutable evidence.


Otherwise for Cable to be at circa $1.48 – its largest daily move in 7 years and the European bourses consistently adding a few points every day would seem to have been driven up by investors’ acts of folly. Maybe there has been a late run back to the status quo by the young. However if the repulsive weather prevails, London, which has clearly provided the momentum for the REMAIN campaign, may start to worry! I suspect that the Bank of England is burning the midnight oil with stress tests and contingency plans for bank liquidity. This is clearly good housekeeping, though in the long term I think there are far more problems involving European banks which are grossly undercapitalised by maybe as much as €300 billion. Many expect Asset managers to be subjected to similar scrutiny.


Still, as the expression goes – Nil desperandum! Onwards and upwards and yes, I am a believer! Whatever the outcome of the referendum the country is now horrible as well as uncomfortably split. Win, lose or draw this problem relating to the EU is not going away. In fact this weeping carbuncle has only just been lanced and may take years to heal.


Yesterday the Street of Dreams put in a lack-lustre effort bordering on inertia. Volumes were light and most Wall Street alumni were interested in Janet Yellen’s rather anaemic presentation to Congress on the State of the US economy, interest rates, which are unlikely to go up in the immediate future and the possible adverse effect that BREXIT may have on the world’s economy. This threat should really be of no immediate concern to the US. How many more times do I have to remind people nothing material in terms of the current arrangements the UK has in place will change for at LEAST TWO YEARS. The DOW closed down 0.27% with the S&P 500 easier by 0.17% and the NASDAQ -0.17%.


Asia rode unenthusiastically on ‘REMAIN’S’ coattails and purred in to positive territory apart from the Shanghai Composite -0.53%. The ASX closed up 0.18% with the NIKKEI 1.07% to the good. The Hang Seng was up 0.35% towards the close. At 9.35am this morning the FTSE 100 was +42 points at 6300 – DS Smith +4%, TESCO +2%, ASTRA UNCH and COBHAM +2.5%. A word or two on Tesco’s trading statement; UK like-for-like sales were up 0.3% (volumes up 2.2%, transactions up 1.7%). This effort was OK if not spectacular. Tesco supermarket share has dropped to 28.3%, with ASDA and Sainsbury are in the mid-16%. Tesco has sold Dobbie’s and its Giraffe restaurant chain in an attempt to focus on core businesses. Aldi and Lidl now have over 10% of the UK market and they will be massing their troops before too long in terms of cost cutting and opening new outlets. Tesco’s shares have fallen 2% from 216p a year ago to 171p today. Dave Lewis has tough job on his hands. He has cut debt from £8 billion to £5.5 billion. Working hours have been shortened and he may be forced to eventually downsize.


Retail is not a fun arena without any inflation to speak of. Debenhams suffered yesterday and hope for great things from Sergio Bucher who is coming from Amazon. We also hear rumours that when Primark post numbers in 2 weeks they may not make particularly pretty or encouraging reading.


UK companies posting numbers – Thursday – DS Smith, James Latham, Tesco (TS), Friday – Polar Capital


US companies posting interim results this week – Thursday – Sonic Corporation, Friday – Finish Line

     Economic data – Thursday – US New 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



TODAY’S FAYRE – Wednesday, 22nd June 2016


“Oh, give us pleasure in the flowers today;

And give us not to think so far away

As the uncertain harvest; keep us here

All simply in the springing of the year.


Oh, gives us pleasure in the orchard white,

Like nothing else by day, like ghosts by night;

And make us happy in the happy bees,

The swarm dilating round the perfect trees.


And make us happing in the darting bird

Tha suddenly above the bees is heard,

The meteor that thrusts in with needle bill,

And off a blossom in mid-air stands still.


For this is love and nothing else is love,

The which it is reversed for God above

To sanctify to what far ends He will,

But which it only needs that wee fulfil”




Robert Frost – poet – 1874-1963



With every egotistical luminary in the world desperate to add their two cents worth on the UK EU Referendum debate, I knew it would not be long before George Soros started to pontificate on the subject.  Needless to say he is warning voters of the grave consequences if we did not take his advice.  Sterling would tumble, as it did when his Quantum Fund helped themselves to a £1 billion at the UK’s expense at the time of the UK’S ERM debacle in 1992, by selling the Pound short for a protracted period ahead of expulsion/leaving.  In passing, purely by default that was probably the best outcome that could have befallen the UK turning a bloody beating in to a long-term unqualified success. Lord Lamont might agree to that observation, though I doubt Sir John Major would.



Let me remind the octogenarian self-centred speculator that conditions are very different today than they were 24 years ago.  In 1992 the UK’s economy was not in good shape.  Interest rates were bobbing around between 10% and 15%.  The domestic property bubble was bursting.  Inflation was rampant.  Sterling was on its knees and the UK’s exports had been sagging.  Today the UK has probably the strongest economy in Europe. Interest rates are negligible on a global basis.  We have plenty of stimulus via QE.  However the robustness of the European banking sector is questionable and its bond market is dangerously bloated. If Mr Soros has had a pop at Sterling, I suspect he won’t make as much money as he did before.  It will also be interesting to see what other currency he would buy or maybe he has chosen another asset class. I must confess that I would be inclined to mass my troops as a speculator in the direction of the Euro long-term, rather than Sterling. The Euro as a currency has potentially holes in it similar in size to a sieve!



Yesterday markets were relatively calm with many global indices adding a few points.  Janet Yellen’s benign testimony to the Senate Banking Committee was as non-committal as usual on when rates might be increased.  Maybe we will glean more when she addresses Congress today but I won’t be holding my breath. Again like others she seems obsessed with BREXIT and its ramifications.  If I were her I would be more concerned about China, Africa and Asia than the UK.  The UK accounts for about 2.5% of world trade!



In passing I am astonished at how chilled out markets are when polls suggest a very tight finish tomorrow.  The bookies seem to be leading the way in pricing up a 73% likelihood of a ‘REMAIN’ victory – hence the devil may care attitude – SO FAR!



The FTSE is likely to see a 25 point rally in early skirmishes.  





UK companies posting numbers – Wednesday – Debenhams, Thursday – DS Smith, James Latham, Tesco (TS), Friday – Polar Capital.



US companies posting interim results this week –Wednesday – Barnes & Noble, HB Fuller, Thursday – Sonic Corporation, Friday – Finish Line 



Economic data – Wednesday – UK public sector borrowing, UK gfk Consumer confidence, US existing home sales, Thursday – US New Home Sales



David Buik
Market Commentator – Panmure Gordon & Co

+44 (0)20 7886 2775
Mobile – 0044 7788 144 877

Panmure Gordon & Co



TODAY’S FAYRE – Tuesday, 21st June 2016


“I didn’t like the way he went away. 

That smile! It never came of being gay. 

Still he smiled—did you see him?—I was sure!

Perhaps because we gave him only bread 

And the wretch knew from that that we were poor. 

Perhaps because he let us give instead 

Of seizing from us as he might have seized. 

Perhaps he mocked at us for being wed,

Or being very young (and he was pleased 

To have a vision of us old and dead). 

I wonder how far down the road he’s got. 

He’s watching from the woods as like as not.”    


Robert Frost – poet – 1874-1963


   The level of enthusiasm and zest that commentators and pundits alike associated with every England team’s prospects for World and European Championships since the 1966 World Cup win, never ceases to amaze me. Apart from Sir Bobby Robson’s 1990 team, which reached the semi-final, England have been consistent in disappointing their fans.

I am so tired of hearing how well we play. Last night’s lamentable 0-0 effort against humble Slovakia was classic England! We failed consummately to do what needed to be done – score more goals than the opposition. That’s what the game is all about! Why Roy Hodgson changed a winning combination, few have fathomed out! Anyway it’s not all over! It is not beyond the bounds of probability for England to win Euro-2016!


To quote the excellent Chris Weston of IG in today’s blog – “It’s amazing to think Janet Yellen speaks tonight in front of the Senate Banking Panel as part of her two-day semi-annual testimony (what many of us used to call the Humphrey Hawkins lectures) in what has to be the most pointless speech’s for a Fed Chairman in recent memory. The markets have a myopic focus on one thing; The UK referendum vote!”



Everything in markets – positive or negative – is tainted with BREXIT, even to the point that it cannot be ruled out that the inclement weather will have BREXIT’S hallmark on it.



The apocalyptic fear generated by the establishment has been ridiculously exaggerated. So not surprisingly the ‘fear factor’ which has been generated by ‘REMAIN’S’ leaders has made a massive contribution to the supremely frothy level of uncertainty and volatility. I doubt that yesterday’s humungous rally of equities across the globe, especially highlighted in Europe, as the threat of BREXIT dissipated, may only be ‘Chapter One’ in this potentially drawn out financial merry-go-round. Yesterday the ‘toothy grin’ of Sir Richard Branson was brought in to play by ‘REMAIN.’ Though Sir Richard employs many people in the UK who pay tax, I am less than convinced that his personal wealth has been decimated by the UK tax regime.  Also the views of the opinionated Hungarian octogenarian, George Soros have attracted interest. He has clearly been asked to comment on the possibility of a re-run of his rape of the Pound, post the ERM in 1992, where it is alleged that he made one billion pounds out of the UK’s removal from the ERM. I am happy to be corrected but I doubt he pays much in the way of UK tax – so frankly I have little interest, apart from a passing one, as to what he has to say!



Moving away from perception to fact, yesterday the Street of Dreams dined out on the receding threat of BREXIT with pollsters and bookies implying ‘REMAIN’; is done and dusted.  I am not so sure, but in response their prognosis the DOW added 0.73%, the S&P 500 0.58% and the NASDAQ 0.77%. These markets did surrender some of their froth in the afternoon. Banks and energy stocks were particularly fruitful sectors. Yesterday the FTSE 100 added 3.1% – 182 points at 6204 – its highest one day rally since February, with banks (av 5%), house builders (Av 6%), oil and drugs (av 3%) ‘Gathering ye rose buds whilst ye may!’ Investors should not be too dismissive of the odd poll that still puts ‘LEAVE’ in the lead. I suspect there will be some added volatility especially in foreign exchange markets, where yesterday the Pound was a standard bearer – Cable $1.4664, €/$1.1335.  Crude oil had a better day – Nymex $49.19.  Gold lost a couple of bucks $1286.75 an ounce.



In Asia most bourses jumped on the BREXIT merry-go-round. The Shanghai Composite was the exception to the rule and was down 0.20% after lunch with the Hang Seng in credit to the tune of 0.48%.  The ASX closed up 0.33% with the NIKKEI enjoying a rare rally +0.1.28%. European bourses digested yesterday’s mammoth gains. At 8.25am the FTSE 100 was down 38 points.  Chemring got hammered on poor numbers – down 20% having initially been down 33%. Photo-Me also got clobbered – down 10%.  Whitbread’s sales were adequate if not spectacular as Mrs Brittain gets her feet under the table. We are likely to see plenty of volatility for the rest of the week, rather more so in the foreign exchange markets than equities. If a ‘REMAIN’ victory transpires then another rally could materialise. I suspect it will be short lived. Fundamentals like falling growth will come back in to play.




UK companies posting numbers – Tuesday – Photo-Me, Chemring, Petrofac, Whitbread PLC, Wednesday – Debenhams, Thursday – DS Smith, James Latham, Tesco (TS), Friday – Polar Capital.     US companies posting interim results this week – Tuesday – Lennar, Adobe Systems, KB Homes, Wednesday – Barnes & Noble, HB Fuller, Thursday – Sonic Corporation, Friday – Finish Line

     Economic data – Tuesday – US PMI, services, EU PMI manufacturing, Wednesday – UK public sector borrowing, UK gfk Consumer confidence, US existing home sales, Thursday – US New 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