TODAY’S FAYRE

TODAY’S FAYRE – Wednesday, 1st June 2016

 

‘How seldom, friend! a good great man inherits
Honour or wealth with all his worth and pains!
It sounds like stories from the land of spirits
If any man obtain that which he merits
Or any merit that which he obtains.’

Reply to the Above

For shame, dear friend, renounce this canting strain!
What would’st thou have a good great man obtain?
Place? titles? salary? a gilded chain?
Or throne of corses which his sword had slain?
Greatness and goodness are not means, but ends!
Hath he not always treasures, always friends,
The good great man? three treasures, LOVE, and LIGHT,
And CALM THOUGHTS, regular as infant’s breath:
And three firm friends, more sure than day and night,
HIMSELF, his MAKER, and the ANGEL DEATH!”

 

Samuel Taylor Coleridge – author & poet – 1772-1834

 

It’s flaming June! – Supposedly the best month of the year with the sun high on the yardarm, supposedly adding some sparkle and glitz to many great mouth-watering sporting and social occasions for revellers to enjoy! – The Derby, Lord’s Test Match, Polo in the Park at Hurlingham, Royal Ascot, Henley Regatta and the start of Wimbledon! What more could we want? However where is the sun?

 

Every now and again it is good for the soul to step away from the rigours of life and return to the world of fantasy. My family and I did this on Monday with a visit to the Electric Cinema in the Portobello Road to see George Clooney, Julia Roberts, a striking looking Irish girl, Caitriona Balfe, Jack O’Connell and the quintessential Old Etonian ‘baddy’ Dominic West in ‘Money Monster.’ – Not a classic but thoroughly enjoyable.  The comfort of great big armchairs with the availability of refreshments helped all attendees cope with the improbability of the plot.

 

The day after a Bank Holiday in markets is often a damp squib and yesterday’s effort was a classical non-event. Dealers and analysts minds seemed to be filled with void thinking, as may market protagonists used half-term as yet another excuse to just sit on their hands and do nothing. With the advent of technology, the working week within the city is becoming shorter and shorter.  Those scurrying around for corporate finance work in a very competitive market place would profoundly disagree as deal makers, accountants, lawyers and PR advisors burn the midnight oil in search of deals which the markets would be happy to consummate. They are currently in limited supply at present, though in the SME space there are opportunities, which we at Panmure Gordon are enjoying with some success. BREXIT’s uncertainty has blunted the flow of business.  However it is being wildly used as the convenient excuse card number 221!

 

London posted an uninteresting torrid session yesterday, where the FTSE 100 eased by 40 points to 6230.  The banking sector initially put its best foot forward to get the session off to a good start but momentum fell away in the afternoon with Standard Chartered Bank eventually losing 2.5% in value.  Other losers were BHP -2% and ITV -2.6%. RSA and Royal Mail both caught the eye adding 1.6%. Inmarsat drew the short straw yesterday as it said Sayonara to the FTSE 100 to be replaced by Hikma Pharmaceuticals, which has made a rather rapid return to the premier index thanks to the acquisition of Roxane in a £2.6 billion deal.

 

It appears that Austin Reed has gone the way of all the flesh, as the ruthless tycoon Philip Day adds the ‘brand name’ to his portfolio, but not the shops, which includes Jane Norman, Peacocks and Edinburgh Woollen Mills, with 1000 jobs ending up on the scrapheap of ignominy.  Time is also running out for 11,000 staff at BHS. There may only be this week for former Mothercare Boss Greg Tufnell to cobble together a deal with the administrators to save the 164 shops. Interest from other predators seems to have dissipated. The outlook for retail looks decidedly murky at present.  It appears that if Jacob de Rothschild really wants to pop Alliance Trust in RIT’S portfolio, he will have to produce rather more ‘wonga’ than he thinks. JdeR is always reluctant to part with his ‘readies!’ If a deal is conjured up to save Tata Steel, the change in the pension arrangements, which affect 130k former and existing employees could have a dramatic effect on the benefits of other pension funds to their extreme detriment.  Sadly that is the way of the world today.

 

On the Street of Dreams yesterday, investors decided to take some risk off the table ahead of a number of key economic issues that present their credentials this month – The OPEC and ECB meetings on Thursday and Non-Farm Payrolls on Friday. NFP are expected to produce robust employment data and some measurable wage inflation.  Then of course there is the FOMC later in the month culmination with the EU referendum on 23rd May 2016. Stock in DuPont and Boeing both saw setbacks – down 2.62% and 2.38% respectively.

 

Asian stocks were experiencing a lack-lustre session thanks to a stronger Yen, a fall in the commodity and oil prices and rather neutral PMI data from China (manufacturing and service sector) – not that bad but hardly inspiring.  The ASX close down 0.96% with the NIKEI offering little in the way of solace -1.62% at the close as Japan waits nervously for the government to postpone its impending sales tax increase.  The Hang Seng and Shanghai Composite were virtually flat) – -0.02% and +0.28% at the time of writing (6.30am). Alibaba shares took a bit of a hit this AM as Softbank, one of its largest shareholders served notice to sell $7.9 billion of shares, taking the share price down 2.8% after hours. MSCI is ruminating over including Shanghai based stocks in it emerging market index.

 

The FTSE 100 is expected to open easier by 9 points – Halfords and Wolseley post results.  The Nationwide posted a 0.2% increase in house prices in May and on a year on year basis they have increased 4.7%.

 

UK companies posting results this week – Wednesday – Halfords, Wolseley, Fusionex International, LondonMetric, Thursday – EKF Diagnostics, Johnson Matthey, Friday – Verona Pharma

 

US companies posting results this week – Wednesday – Ford Motor Company (sales), Thursday – Costco, Fred’s, Ciena, Joy Global, Gap

 

Economic diary for the coming week – Wednesday – UK mortgage approvals, UK PMI manufacturing, Thursday – UK PMI construction, ECB, US Initial Jobless Claims,  Friday – US Non-Farm-payrolls & employment data, UK PMI services, EU Retail 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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