TODAY’S FAYRE

TODAY’S FAYRE – Wednesday, 14th September 2016

 

“Riding home from credulous blue domes,
the dreamer reins his waking appetite
in panic at the crop of catacombs
sprung up like plague of toadstools overnight:
refectories where he reveled have become
the holstery of worms, rapacious blades
who weave within the skeleton’s white womb
a caviare decay of rich brocades.

Turning the tables of this grave gourmet,
the fiendish butler saunters in and serves
for feast the sweetest meat of hell’s chef d’ uvres:
his own pale bride upon a flaming tray:
parsleyed with elegies, she lies in state
waiting for his grace to consecrate.


 
Sylvia Plath – poet – 1932 –1963

 

 It is extraordinary that when the public’s feathers are ruffled, they react with not only great irritation but also with endless loyalty. Such was the case when it transpired that Channel 4 had trumped the BBC with an extra £10 million to secure the rights of ‘The Great British Bake-Off’ for next year’s season of programmes. Interesting that Sue and Mel are not going to join the new circus. Filthy lucre has failed to entice them up the Gray’s Inn Road. 

 

When the BBC lost out to Sky to broadcast the Open a Golf, starting at Troon this year, the viewing figures dropped by 70% on the previous year. Many more people tuned in to BBC’s recorded highlights supplemented by the wonderful gravelly comments from that ‘Peter Pan’ of golf, Peter Alliss!

The European Union is facing an existential crisis! Well there’s a surprise! President of the European commission, Jean-Claude Juncker is today expected to announce a raft of economic and security plans in the search for common ground in the wake of the British vote to leave.

 

In his address to the European parliament, Juncker will say commonality between EU member states has never been so low, with governments everywhere quicker to say what they don’t want from Brussels rather than work together. He surely cannot be surprised with the economic spoils across the region so poorly spread out and no workable immigration policy in place.  It also looks like Greece is teetering on the brink of financial disaster again.  It also does not help that Italy’s woes are testing PM Renzi and Spain having no settled government.  Finally for two pins I suspect that France, given a free vote, would be rather out than in!

 

‘Brexiteers’ and ‘Remainers’ alike have heard enough rhetoric from Messrs Davis and Fox as to how tough these trade negotiations are going to be. I think everyone would like to hear how many negotiators have been hired and who they are.  Like me, many sceptics are getting disturbed that far too many Europhiles want to play a leading role in the negotiations. No, confrontation is not the way forward, but a positive approach is essential.

 

At last we have a minister, Priti Patel, who appears to be as outraged at the staggering £12 billion that goes towards foreign aid, as millions of people in this country are! Let’s hope she has the drains up before too long.

 

Many felt that September may be a rather barren month for equity geeks and that concern is starting to look like it might be the case.  The Street of Dreams has experienced four negative sessions in the last five with FED talk of higher rates dominating the agenda.  We have also seen oil come off its best levels.  Some analysts are concerned that the third quarter earnings which will be posted in earnest in the middle of next month may not produce the increase in profits required for equities to make that quantum leap forward.  Quantitative easing is becoming a dangerous, but necessary evil, to prop up support for equities. Bond yields, though still ridiculously low, have been ticking up quite sharply in recent days with 10-year gilts yielding 0.91% and US Treasuries 1.73%.  Don’t laugh!  It is not that long ago when the respective yields were 0.65% and 1.50%! Yesterday gold eased a smidgen to $1320.24 an ounce and the cost of oil per barrel lost some ground – Nymex $45.11, Brent $47.26.

 

Against that background Wall Street yesterday surrendered an average of 1.3% on the three main indices. Oil stocks were out of favour with Chevron losing 2%. Wells Fargo sank 3.8% after Treasury Secretary Jacob Lew lambasted the bank over its bogus accounts scandal. Wells Fargo was fined $185 million by regulators. Apple was the only Dow component stock to gain, rising 2.6% after Sprint and T-Mobile reported strong orders for the new iPhone 7. Samsung Electronics advanced 4.2 percent following news it reached a deal to sell its printing business to HP Inc. for $1.05 billion.

 

Property and oils stocks were amongst the sectors that took a hit as the FTSE 100 eased by another 35 points to 6665.  Ocado’s numbers were dissected in great detail and investors were unhappy that the size of shopping orders had fallen quite sharply as well as margins coming under pressure. The fact a cash surplus of £9 million last year turned into a debt of £38 million culminated in 11% being wiped off the value of Ocado’s shares. Conversely JD Sports shares rose 4.7%.  This mews may well have stuck in the crawl of Mike Ashley for so many years the thorn in JD Sport’s side! Johnston Press recently trashed down to being no more than a penny stock rallied 70% in late trading based on rumours of talks with hedge fund Crystal Amber. Before yesterday’s surge the shares were less than 10p each!

 

Yesterday we had the warning shot across the bows on inflation with 3% likely to be the rate by the middle of next year with food likely to be the catalysts thanks to the Pound, which has fallen sharply since May 2016. Today UK employment data will be posted. The rate may tick up to 5% with jobless claims possibly falling. I doubt alarm bells will be ringing. At he time of writing the FTSE 100 is expected to open up 25 points – possibly a bear squeeze rally that should not be trusted.

 

 UK companies posting results this week – 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 –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
www.panmure.com

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