TODAY’S FAYRE – Thursday 16th October 2016


On either side the river lie

Long fields of barley and of rye,

That clothe the wold and meet the sky;

And thro’ the field the road runs by

To many-tower’d Camelot;

The yellow-leaved waterlily

The green-sheathed daffodilly

Tremble in the water chilly

Round about Shalott.


Willows whiten, aspens shiver.

The sunbeam showers break and quiver

In the stream that runneth ever

By the island in the river

Flowing down to Camelot.

Four gray walls, and four gray towers

Overlook a space of flowers,

And the silent isle imbowers

The Lady of Shalott.


Underneath the bearded barley,

The reaper, reaping late and early,

Hears her ever chanting cheerly,

Like an angel, singing clearly,

O’er the stream of Camelot.

Piling the sheaves in furrows airy,

Beneath the moon, the reaper weary

Listening whispers, ‘ ‘Tis the fairy,

Lady of Shalott.’


The little isle is all inrail’d

With a rose-fence, and overtrail’d

With roses: by the marge unhail’d

The shallop flitteth silken sail’d,

Skimming down to Camelot.

A pearl garland winds her head:

She leaneth on a velvet bed,

Full royally apparelled,

The Lady of Shalott.”


Alfred, Lord Tennyson – poet –1809-1892


With just over three weeks to go Hillary Rodham- Clinton is beginning to look like a shoo-in to become the 45th President of the USA, despite her unpopularity in many quarters.  Some of Donald Trump’s behavioural patterns are surely beyond the pale, despite his anti-establishment appeal amongst the blue and white collar workers and the young. However as an observer this must be the worst dirty tricks political campaign recorded in the Western World in living memory. It’s been a total embarrassment.

It only needed M/S Sturgeon’s perception that the BREXIT negotiations were likely to be ‘HARD’ for her to pop her head above the parapet with another tsunami wave of independence referendum hysteria. She knows Scotland cannot afford independence but she’s a romantic and she’ll attempt to persuade 51% of her voters to follow her to her Valhalla, wherever that may be! So Scotland voted to ‘remain’ and many are sorry that the democratic process did not serve the result Scotland wanted. However leaving the sovereignty issue aside, it might be folly for M/S Sturgeon to lead her country in to an economic cul-de-sac of oblivion. Scotland, respectfully cannot afford independence and unless the rules change Scotland cannot meet the EU’S criteria for full-blown membership. Could the media PLEASE limit us in England with wall-to-wall coverage of her campaign? I think the interest here in England in her pearls of wisdom is scant, despite most people wanting Scotland to remain in the Union. 

The EU/UK ‘Remainers’ continue to have a field day, sulking at the democratic decision taken by the British people, which together with part of the establishment’s abhorrence at the idea of the U.K possibly leaving the single market, the government’s continued vacillating over policy  coupled with negative comments made by the likes of the CBI gave the ‘spivs and vagabonds’ the encouragement they required to give the Pound another terrible shellacking – the worst for over 30 years – taking it down to $1.21 and change. However, all things being equal, the FTSE 100 kept is equilibrium by the end of the week, thanks to Dollar related earnings. It had only lost 0.44%. If more common sense was devoted to toning down the aggressive approach to immigration (particularly those already domiciled here in UK), it could well assist in a more accommodative approach from everyone towards these sensitive negotiations.

The spat between Unilever and Tesco over a suggested 10% price increases was thankfully short-lived, but Unilever got the message across – the severe 17% drop in the pound will trigger inflation next year, with food prices likely to rise 5% by the summer. This view was endorsed by Governor Mark Carney, who feels inflation is inevitable, but he will resist hiking rates for as long as possible, as he feels the economy is likely to be very brittle for some time. Reading between the lines, many feel the Governor and the PM are not the best of pals. There may have been a divergence of opinion on the precipitous lowering of rates at the end of June. However Mr Carney is determined to maintain the BOE’S independence.

Though many investors and market observers were suffering from pre-3rd quarter earnings neurosis and all this considered, the three main US indices surrendered only a bit of froth – S&P -0.87%. Consumer Confidence improved was robust and oil prices rallied. JP Morgan Chase, Citibank and Wells Fargo have all had regulatory short comings and even though their earnings beat expectations their growth prospects will only be enhanced when interest rates are increased.  Consequently their respective share prices only rallied 0.93%, 0.29% and 0.09% on Friday. In all fairness US banks have put their capital requirements act together miles ahead of their European peers. Salesforce decided against inviting Twitter into its boudoir and all in all that precipitated a 25% fall in its share price down to $16 and change. Though Twitter has 313 million subscribers the advertising income is uncomfortably parsimonious. Some think Microsoft or IBM may have a look at Twitter’s books.  I have my doubts. The synergy is not obvious.  

China’s improved growth prospects and inflation outlook despite a 10% drop in exports year on year on kept Shanghai and the Hang Seng on good terms with themselves last week. However Samsung’s shares fell by 7.5% last week as production and sale of Galaxy Note 7 ceased.  This could cost Samsung 30% of its profits this year.

On the domestic economic and business front, some UK house construction data posted last week was quite positive, particularly away from London. PM May gave Nissan’s CEO, Nissan Carlos Ghosn reassurance that its Sunderland operation would be protected against adverse trends as a result of Brexit. A deal may include concessions on driverless cars.  It has transpired that Saudi Arabia and SoftBank are pooling resources totalling $100 million for technological development. China is preparing the ground for talks on a trade deal with the UK. Despite being considered controversial, William Hill is continuing with its negotiations with the Canadian poker giant Amaya. If shareholders block this deal CEO Philip Bowcock may well come under the cosh.   Misys’s forthcoming IPO may only value the company at £3.4 billion rather than £4.5 billion due to market conditions turning marginally less attractive for investors.  Saudi Arabia is still mulling over the prospect of an IPO for ARAMCO, but may be reluctant to post the value of its oil reserves (maybe $2 trillion).

UK companies posting results this week – Monday – Robert Walters, Pearson, Tuesday – ASOS, Bellway, Hays, Burberry, BHP Billiton, Evraz, Wednesday – Rio Tinto, Travis Perkins, Reckitt Benckiser, Rentokil Initial, Thursday – LSE, Segro, Friday – Acacia Mining, IHG, Computacenter, Dechra Pharmaceuticals

US companies posting interim results this week – Monday – Bank of America, Netflix, Tuesday – Philip Morris, Johnson & Johnson, Blackrock, UnitedHealth, Intel, Yahoo!, Goldman Sachs, Wednesday – Reynolds American, Halliburton, Morgan Stanley, BJ Restaurants, American Express, eBay, Xilinx, Mattel, Thursday – American Airlines, Walgreen Boots Alliance, Pulte, PayPal, Schlumberger, Microsoft, Friday – GE, Honeywell, McDonald’s

Economic data this week – Monday – Rightmove Housing data, US Industrial Production, Tuesday – US CPI, PPI data and NAHB Housing, Wednesday – UK Unemployment, US Oil inventories, Thursday – CBI Industrial expectations, ECB press conference



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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