TODAY’S FAYRE – Sunday, 11th September 2016


“When I go up through the mowing field,
The headless aftermath,
Smooth-laid like thatch with the heavy dew,
Half closes the garden path.

And when I come to the garden ground,
The whir of sober birds
Up from the tangle of withered weeds
Is sadder than any words

A tree beside the wall stands bare,
But a leaf that lingered brown,
Disturbed, I doubt not, by my thought,
Comes softly rattling down.

I end not far from my going forth
By picking the faded blue
Of the last remaining aster flower
To carry again to you.”

Robert Frost – poet – 1874 –1963



15th Anniversary of ‘9/11’ – Never Forgotten – RIP


 Sometimes you have to wonder at the notoriety of certain controversial individuals who believe they are above the law.  The two that come to mind are Julian Assange and Edward Snowden. Snowden is moaning at his current hosts, Russia, on human rights and ‘cyber attacks’. Who the hell does Snowden think he is?  He should be in jail in the US for a very long time. He has no right to decide what he likes and does not like about US official secrets act.  He signed it – no one forced him to sign.  I suggest he buttons up and stops criticising the Russian authorities. I am told Siberian prisons are uncomfortable.


 By the time this brief missive joins your cornflakes at the breakfast table it seems very unlikely that PM May’s government will be any nearer forming a policy on BREXIT.  The holiday period seems to get longer every year with the levels of inertia intolerable. All I hope is that Messrs Davis and Fox have been flat to the boards hiring hundreds of trade negotiators from all over the world to prove to Lord O’Donnell that it won’t take a decade to make suitable global trade agreements. Again I think that may be wishful thinking.


 What I am pleased about is that in the last 2 weeks the economic data has been far better than expected.  Last week’s manufacturing did look a little weak, but there is no doubt that the BREXIT influence, which triggered a fall in the value of the Pound, saw at least a £1 billion trade benefit to the UK. Though many ‘REMAIN’ supporters still hold ‘BREXITERS’ in wholesale contempt, which when all is said and done, smacks of a bad loser, it is equally important that BREXITEERS show a little more humility.  Recent data is encouraging, but there will be plenty of bumps along the road throughout the autumn and winter. There will be a huge amount of jingoism from Juncker and his pals as to how uncooperative the EU will be over trade negotiations. The sooner the temperature is lowered the better for all concerned.


As the sun sets over the yardarm, the immigration problems befalling mainland Europe will surely become acute.  The first real test for one of the UK’S on-going relationships will be the borders between France and the our ‘Sceptred Isle.’ – Walls etch.  Juppe and Sarkozy, two Presidential candidates next year will need to be more flexible over trade if they want cooperation on boundaries.


Chancellor Hammond is rumoured to becoming round to the idea of accepting that the Single market may becoming a distant option.  Long term, FREE MARKET is desirable globally. The protracted TTIP trade negotiations and those between the EU and Canada have been nothing more than farcical. It is reassuring to hear that sensible conversations between UK and Australia may soon be underway and hopefully similar conversations with India will be started.


Though I have been a huge fan of Xavier Rolet as CEO of the London Stock Exchange, I must express huge doubts about any obsessed “REMAIN” crusader being a standard bearer in trade and City of London financial negotiations. How could he objectively look after every ones’ best interest, particularly, if after successful deliberations M Rolet sails off in to the sunset with a bag of swag? However, it could well be the EU regulator that pulls the rug on this deal due to complicated clearing arrangements. 


Wall Street took to the hills on Friday, as investors took a measurable amount of risk off the table.  I think investors are becoming impatient with any real guidance from Central banks.  Ironically the market seems happier with the FED’s guidance on rates than the ECB’s.  Though normally a relatively outspoken, Mario Draghi last week started to show dissent at the lack of fiscal policy input from the EU, relying dangerously on very loose monetary policy to stimulate a stagnating economy.  It was also a splendid opportunity to blame BREXIT and a vacuum of inertia with no guidance on Article 50 or trade negotiations. The DOW dropped 2.13%, the S&P 500 dumped 2.45% in value and the NASDAQ 2.54%. Much of this sell off took place after Europe had closed as the FTSE only eased by 1.19%. Over the week the S&P lost 0.83%, The FTSE 1.71% and European bourses an average of 1.38%.   The Nikkei marginally bucked the trend in adding 0.23%. Due to the uncertainty that prevailed 10-year bond yields flipped up and gold dropped $6 an ounce to $1332. In the US it was real estate, energy and mining shares that took a clattering.  Apple was down 2.2%, Alphabet down 1.7%, Intel down 1%, Facebook easier by 2.4% and Amazon was off a measurable 3.05%. On Friday the main losers on the FTSE were Ashtead 4%, Bunzl 3,4%, Whitbread 3.9%, Burberry 2.5%, Greene King a surprising 6% and Fever-Tree 5%. Sports Direct had a rare good day adding just over 2%.


I have to say, hearing JD Wetherspoon’s Tim Martin – a long time ‘Eurosceptic’ – castigate the previous administration for its appalling handling of the ‘Remain’ campaign was music to my ears. JD Wetherspoon was posting an encouraging trading statement, which saw their shares gain 2%. In adverse conditions JDW has seen a remarkable rally in its shares during the last year – up 31%.


We have had a few weeks since Sir Philip Green last dominated the headlines. However last week there were veiled accusations of bribing officials over pension arrangements – allegation he has vigorously repudiated. In fact Sir Philip is hopeful of a satisfactory resolution to the £571m pension black hole. I suspect that only a substantial cheque from Sir Philip will placate the staff, parliament and the general public. What is so frustrating is that Sir Philip knew what the required remedy was right at the outset.


Four top retail managers have been suspended by Tesco, pending the outcome of an inquiry to allegations that they had cooked the books to hide a slump in profits which wiped £2 billion off the value of the company. These accusations again have been strenuously denied and the accused will offer a vigorous defence. 


Whilst on the subject of retail and supermarkets, my colleague and Panmure’s excellent economist Simon French is strongly of the opinion that the sharp fall in the value of the Pound may well help exports, but at the same time it will in the New Year trigger a steep rise in inflation – probably 3.5% by April. If the supermarkets have had the vision and foresight to see this movement coming they could at last see some margins from which to make increased profits.


UK companies posting results this week – Monday – Abcam, AB Foods, Restore, John Laing, Tuesday – Ocado, Hilton Foods, IQE, JD Sports, Wednesday – Alliance Pharma, Dunelm, Galliford, Martinco, Thursday – Booker, Poundland, Next, Wm Morrison, Premier Farnell, Ophir Energy, Friday – Investec


US companies posting interim results this week – Thursday -Oracle


Economic data this week – Tuesday – UK  inflation (PPI & RPI), Germany ZEW, Wednesday – UK Employment data, Thursday – UK Retail Sales, MPC, Friday – US Michigan Consumer Confidence


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


David Buik

Market Commentator


D +44 (0)20 7886 2775

Panmure Gordon & Co 
One New Change | London | EC4M 9AF | United Kingdom


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