TODAY’S FAYRE – Thursday 13th October 2016

“Why are we weighed upon with heaviness,

And utterly consumed with sharp distress,

While all things else have rest from weariness?

All things have rest; why should we toil alone,

We only toil, who are the first of things,

And make perpetual moan,

Still from one sorrow to another thrown:

Nor ever fold our wings,

And cease from wanderings,

Nor steep our brows in slumber’s holy balm;

Nor harken what the inner spirit sings,

‘There is no joy but calm!’


Why should we only toil, the roof and crown of things?  

Lo! In the middle of the wood,

The folded leaf is wooed from out the bud

With winds upon the branch, and there

Grows green and broad, and takes no care,

Sun-steeped at noon, and in the moon

Nightly dew-fed; and turning yellow

Falls, and floats adown the air.


Lo! Sweetened with the summer light,

The full-juiced apple, waxing over mellow,

Drops in a silent autumn night.

All its allotted length of days,

The flower ripens in its place,

Ripens and fades, and falls, and hath no toil

Fast-rooted in the fruitful soil.  


Hateful is the dark-blue sky,

Vaulted o’er the dark-blue sea,

Death is the end of life; ah why

Should life all labour be? Let us alone.

Time driveth onward fast, And in  a little while our lips are dumb.


Let us alone. What is it that will last?

All things are taken from us, and become

Portions and parcels of the dreadful

Past. Let us alone. What pleasure can we have

To war with evil? Is there any peace

In ever climbing up the climbing wave?

All things have rest, and ripen toward the grave

In silence; ripen, fall and cease:

Give us long rest or death, dark death or dreamful ease.”      


Alfred, Lord Tennyson – poet –1809-1892

Considering Dave Lewis has been through the hoop since he picked up the hospital pass from Phil Clarke in being appointed as CEO of Tesco in in July 2014, I commend his courage for standing up to Unilever’s (where he was marketing director) huge price increase demands. When it comes to many of Unilever’s affairs he knows exactly how many beans make four! There have always been spats between retailers and suppliers. However if I may be so bold Unilever’s demands are frankly extracting the ‘Michael’ vigorously – precipitous in the extreme. Tesco knows only too well that many of these products such as Marmite are produced in the UK and are also exported to the EU for a handsome profit. Yes food inflation could well be 5% by July of next year, but this demand considering the parlous state of supermarkets is a bridge too far. Perhaps a 3% rise would be sensible and carry on implementing increases as inflation starts to make its presence felt. I cannot believe that Unilever does not have an excellent FX hedging department – if not, why not?

Let’s hope Sainsbury, ASDA and Morrison join in the stance taken by a very brave and resolute Dave Lewis. I won’t be holding my breath as supermarkets are a cut-throat business.

News permeated that UBS’S global wealth management has fallen by $300 billion.

China’s trade data for September posted this morning was very disappointing with exports falling by 10% year on year.


Lloyds Banking Group confirmed a further 1234 redundancies – part of the 2014 9,000 redundancy plan. Digital banking was used as an excuse. I wonder how popular the Chancellor’s idea of selling the remaining 9% of the taxpayers’ holding to wholesale investors rather than retail investors at a 5% discount, will prove to be. I suspect retail investors will be grateful they did not fill their boots in the ‘high’ 60ps last year.

All equity markets feel over-priced to me, but with quantitative easing remaining omnipotent in so many centres, it is hard to see a really serious correction though one of the magnitude of 5-7% in October/November could not be ruled out. Markets have drifted in New York, based on earnings concerns and a possible rate hike after the Presidential election. The uncertainty created by BREXIT – not only the larruping of the Pound, but also, more to the point, by the lack of political clarity on both sides of the Channel – have exacerbated the problem. The Pound has experienced its worst performance for over 100 years against the Dollar – down 18% since June to $1.2179. It has become increasingly clear that Carolyn Fairbairn and the heavy hitters in the CBI are so anti-BREXIT, together with the majority of MPS, it will make it very difficult for the government to negotiate a deal to the public’s satisfaction. In protest to the CBI’S stance JCB’S Chairman Sir Anthony Bamford has resigned from this august body.  M/S Sturgeon throwing her two cents worth in to the ring, as the anti-Brexit ring leader, is another irritation we could do without. I was greatly heartened by comments made by BOE deputy Governor Sir Jon Cunliffe – a serious Europhile – who stated that centres such as Frankfurt, Paris and Amsterdam are not in a position to assume the reins of London as major financial centres. 


Yesterday saw a bad day on the Street of Dreams in New York with the three main indices easing by between 1% and 1.5%, thanks in the main to withering concern on the quality of the 3rd quarter earnings season and what many consider to be an inevitable FED rate rise in December. Today the DOW could open down 100+ points plus. In Asia China’s poor trade data with exports down 10% year on year coupled with the falling investor sentiment in the US, bourses understandably shed some value with the ASX closing down 0.71%, with the Hang Seng easing by a meaningful 1.61% with the NIKKEI’s performance rather lack-lustre – down 0.39%. Samsung posted comments implying that the withdrawal of its Galaxy 7 could damage this year’s profits by as much as 30%. After the terrible beating Samsung’s share price has taken in previous sessions it enjoyed a relief rally of 1.48% today.


Yesterday the FTSE eased by 46 points and today it has fallen by another 49 points to 6975 at 11.45am. Mining stocks were out of favour with BHP Billiton and Rio both down 4.5%. Banks were not faring to well – HSBC -1.2%. Of those companies reporting today or in the public eye – Unilever down 3% based on concerns of currency vagaries, despite quite decent sale figures. Tesco are down 2%. WH Smith a high street darling despite the feeling it has been downsized for a decade was up 2.5% on an 8% profit rise. Sky saw revenues increase by 5% and added another 100k subscribers but the shares felt heavy – down 1.5%. Booker posted decent progress – +3%.


Though a few IPOS have been pulled with Pure Gym and Krispy Kreme the most high profile examples, due to market concerns on valuation, sentiment and BREXIT, we at Panmure are seeing very good appetite for M&A activity but very much for discretionary spend proof businesses. The rest of the week promises to be very neurotic.

UK companies posting results this week – Thursday – Game Digital, WHSmith, SKY (TS), Unilever (TS), Bookers, Hargreaves Lansdown (TS),  Rank Group, Friday – Provident Financial, Ashmore, Man Group

US Companies posting interim results this week – Wednesday – CSX, Thursday – Delta Airlines. Friday – JP Morgan Chase, Del Frisco Restaurants

  Economic data this week – Wednesday – FOMC Minutes, Thursday – MPC, Friday – UK Construction output, BOE credit survey


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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