TODAY’S FAYRE – Thursday, 28th July 2016


“If music be the food of love, play on;

Give me excess of it, that, surfeiting,

The appetite may sicken, and so die.

That strain again! it had a dying fall: 

O, it came o’er my ear like the sweet sound,

That breathes upon a bank of violets,

Stealing and giving odour! Enough; no more:

‘Tis not so sweet now as it was before.

O spirit of love! how quick and fresh art thou,

That, notwithstanding thy capacity

Receiveth as the sea, nought enters there,

Of what validity and pitch soe’er, B

ut falls into abatement and low price,

Even in a minute: so full of shapes is fancy 

That it alone is high fantastical.”


“Twelfth Night”


William Shakespeare – poet & playwright – 1564-1616 


Unless you live in Sussex, Goodwood is the most inaccessible racecourse in England. However there cannot be more delightful place to spend an afternoon inhaling the joys of the very best of flat racing, than on the rolling Sussex downs. Glorious Goodwood is a none off and yesterday’s Sussex Stakes over a mile saw the most exciting and titanic struggle, which saw ‘The Ghurkha’, ridden by Ryan Moore slip through on the inside to mug Frankie Dettori on ‘Galileo Gold’ by a cosy half-length!



So J-C Juncker thinks he’s pulled ‘a fast one’ having appointed Michel Barnier, the former ‘AG & Fish’ luminary as the EU’S BREXIT negotiator. Barnier did a splendid job as an obdurate uncooperative financial regulator, who gave George Osborne and the UK government a really hard time in an arena most European capitals played a fairly ordinary role in comparison to London. Juncker thinks he’s brought off a coup. Sir Vince Cable referred to him in CityAM as smart, suave and formidable. I think truculent, obfuscate and tricky are nearer the mark. If Sir Vince thinks he’ll run rings around the UK negotiators, think again. It takes two to tango and the EU needs us rather more than we need them. Constructive negotiations to accommodate both sides if possible, are to be recommended! I think Juncker is living on borrowed time with Germany showing signs of irritation in response to his jingoistic rhetoric!



The Street of Dreams posted another rather neutral session thanks to hints from the FED that an interest rate hike in 2016 was on the cards at one of the 3 remaining meeting with September not being ruled out. With the Presidential election taking pride of place in the last quarter, Mrs Yellen could plump for September, particularly if the Labour data continues to improve and inflation does continue to be dormant. The FED will also need to be happy that the rest of the world’s economy is not going to crumble. The DOW closed down 0.01%, with the S&P 500 -0.12% with the NASDAQ up 0.58%, thanks in the main to further gains from Apple and Facebook up 4.5% after hours thanks to 186% increase in earnings. Boeing disappointed with a 63% drop in profits due to reassessing the cost of 747s and the KC-46 refuelling tanker.




The ONS’s surprisingly upbeat data on growth for the second quarter up 0.6% April to the end of June and 2.2% on an annualised basis gave the FTSE an initial fillip, but once it was established that the momentum was all May and June, the jury was left wondering how much credence should be taken from these numbers. Assessing progress between July and October will make more sense. There are signs that all is not lost and the fact that Boeing continues to invest as des Glaxo with a further £275 million with McDonald’s also announcing a further 5k jobs to be created in the years to come. We may also see an upturn in M&A business after the holiday period. Finally on this issue, it will be interesting to hear/see whether the MPC hikes rates by 0.25% on 4th August in conjunction with the BOE Inflation Report. If that happens and I would be against it – too precipitous – then the economy is showing signs of weakness and distress.


The FTSE added 26 points to 6750 yesterday with ITV rocking and rolling after its results – shares up 8%. Standard Chartered announced the appointment – an unorthodox one – of Jose Vinals the IMF economist as its new Chairman; the need for regulatory prowess being seen as a prerequisite. This morning the Yen was strong against the Greenback in Japan awaiting tomorrow’s fiscal package, which drove the NIKKEI down 1.13%. The Hang Seng eased by 0.20% with the Shanghai Composite all but moribund – -0.09%. The ASX added 0.30%.



At the time of writing (10.10am) the FTSE is down 10 points at 6760. There have been a massive slew of earnings set out below. The price dissemination on some is as follows – Rolls Royce +14%!!! – I do not understand why this stock is up so much. With oil at say $45 a barrel and CEO Warren East posting an outlook on profits for next year about 50% below 2014’s level leaves me perplexed. The shares were £12 then! Others – Diageo +1%, Sky +5.75%, BT +3%, Smith & Nephew -4% RD Shell -3.5% and Lloyds Banking Group -3.5%. I will just comment on Lloyds Banking Group’s announcement that 3k redundancies and the closing of 200 branches has ‘ZIPPO’ to do with BREXIT. It’s called FINTECH. HSBC is in the process of making 30k redundancies in the last few years and going forward. Barclays are making about 5k redundancies, why should Lloyds Banking Group be any different? The figures were OK but that is not good enough to get the share price going, with little prospect of a sale of the remaining 9% to the market out of public ownership.



UK companies posting results this week – Thursday – Centrica, Diageo, Sky, Thos Cook, BT Group, Smith & Nephew, Henderson, Astra Zeneca, Rentokil Initial, Just Eat, PayPoint, Genel, Domino Pizza, Lloyds Banking Group, Royal Dutch Shell, Weir Group Friday – Barclays, Vesuvius, Reckitt Benckiser, Pearson, Foxton’s, Paragon


US companies posting interim results this week – Thursday – Alphabet (Google), Baker Hughes, Ford Motor, Zimmer, Boston Scientific, Lear, Hershey, Raytheon, CME, Bristol Myers Squibb, ConocoPhillips, Colgate Palmolive, Harley Davidson, Amazon, Pixelworks, Friday – Xerox, Exxon Mobil, Chevron, Cigna


David Buik – market commentator

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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