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
Market Commentator – Panmure Gordon & Co
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