TODAY’S FAYRE – Tuesday 1st November 2016


“I made hay while the sun shone.

My work sold.

Now, if the harvest is over

And the world cold,

Give me the bonus of laughter

As I lose hold.”   ——————  


“The sleepy sound of a tea-time tide

Slaps at the rocks the sun has dried,  

Too lazy, almost, to sink and lift

Round low peninsulas pink with thrift.  


The water, enlarging shells and sand,

Grows greener emerald out from land  

And brown over shadowy shelves below

The waving forests of seaweed show.  


Here at my feet in the short cliff grass

Are shells, dried bladderwrack, broken glass,  

Pale blue squills and yellow rock roses.

The next low ridge that we climb discloses  


One more field for the sheep to graze

While, scarcely seen on this hottest of days,  

Far to the eastward, over there, Snowdon rises in pearl-grey air.  


Multiple lark-song, whispering bents,

The thymy, turfy and salty scents  

And filling in, brimming in,

sparkling and free

The sweet susurration of incoming sea.”    


Sir John Betjeman – poet laureate- 1906- 1984


“The whole aim of practical politics is to keep the populace alarmed (and hence clamorous to be led to safety) by menacing it with an endless series of hobgoblins, all of them imaginary.” – HL Mencken – journalist & satirist – 1880-1956


By the time this inconsequential missive joins your cornflakes at the breakfast table, BOE Governor, Mark Carney it appears, was encouraged sufficiently by comments of support from the PM’s spokesman and Trade Minister Greg Clark, to persuade him to stay until after BREXIT – until June 2019.  Most observers will be delighted that he did not wait until after the Inflation Report and MPC meeting this coming Thursday, to announce his decision. Many hoped he would stay the full trip until 2021. Personally speaking, I think there was an excess of brouhaha in regards to his relationship or spat with PM May.  The media and some maverick politicians have made more of his political intervention than was required.  The reassurance he needed consisted, I think, of some TLC and an official ringing endorsement from Chancellor Philip Hammond to follow up positive comments made by senior government ministers. In terms of Mr Carney’s duty of care post the Referendum, he was right to point out that the UK’s economy might not be as robust immediately prior to the BREXIT and post its withdrawal.  However I think he ladled on the ‘Sodom & Gomorrah’ syndrome far too thickly, which gave the impression that he was massively pro-REMAIN and possibly an acolyte of George Osborne, who, after all appointed him.


Apart from crossing the political divide and erroneously attaching too much credence and importance to ‘forward guidance’, which every central banker across the globe has forecasted incorrectly almost since Noah left the ‘Ark’, I think Mark Carney has been a good Governor. He has put together a very strong team around him at the Bank and the MPC – Sir John Cunliffe, Dame Minouche Shafik (now Director of LSE), Andy Haldane, Jenny Scott and Sam Woods, with Kirstin Forbes and Ben Broadbent providing brilliant non-executive support on the MPC. The most impressive of all has been Andrew Bailey, who did a great job at Prudential Banking Authority, straightening out our banks’ capital requirements in double quick time in comparison to our peers in Europe. He is now ensconced as CEO at the FCA. Also Charlotte Hogg, enticed away from Santander, has put the BOE’s administration and day-to-day running on a very strong footing.


In my humble opinion it would have been very regrettable if Mark Carney were to have left as Governor, ahead of his agreed tenure. It would have sent out entirely the wrong message to the rest of the world. Sterling could become even more wobbly than it currently is. Fortunately the rumour mill was accurate; so we need no longer worry.  I doubt he is the type to be influenced by his detractors like Lord Lawson and Jacob Rees-Mogg.  Also I wouldn’t have bought the personal reasons’ for his leaving. His wife is English and the word of the Street is that his girls are having fun here in ‘Old Blighty.’  Also the Governor’s political aspirations will have taken a hit, now that Justin Trudeau is a cult-hero in Canada.  However, if he had left, I am sure Andrew Bailey would have picked up the cudgel and run with it, brilliantly and seamlessly as the new Governor. So would Sir Paul Tucker, who was woefully and shabbily treated, though his supportive comments and association with Bob Diamond was not appreciated by the Treasury Select Committee, nor were they necessary.  I should reiterate Sir Paul was NOT responsible for banking supervision!


Whilst the world watched on ‘gobsmacked’ by the incredulous behaviour of the FBI and of Messrs Clinton and Trump, most of the major global indices were in inertia mode, though in London, the FTSE 100 eased by 42 points to 6954. It was mainly the fall in oil and some commodity prices that took the market lower. October was the 5th consecutive month the FTSE has posted a profit. For once in a blue moon, it was good to see the banking sector sit up and take nourishment, despite the disappointing efforts by RBS and to a lesser degree Lloyds Banking Group last week. Ahead of today’s figure Shire was slightly under the cosh as it became apparent that one of their haemophilia drugs may not pass muster! – Down 2.8% WPP grabbed the ‘yellow jersey’ adding 4%.


The Street of Dreams buried its head in the nearest pillow hoping the election horror show would just prove to be a bad dream. The three main indices closed near enough flat. However M&A activity raged. General Electric edged down, a tad having agreed $25 billion deal to acquire Baker Hughes Baker Hughes, whose share price last night was lowered by 7.2%. Telecom titans Level 3 Communications and Century Link agreed to pool resources in a $34 billion deal and finally Blackstone bought TimeHealth for $6 billion. In Asia Chinese PMI gave the Hang Seng a bit of a fillip up 1.1% and the Shanghai Composite up 0.7%. The NIKKEI closed up 0.1%.


It was a big earnings day in London with Royal Dutch Shell and to a lesser degree BP beating expectations. Clearly the acquisition of British Gas has enhanced Shell’s earnings and shares were up 3.5%. In the case of BP, the sunflower shed 1.5%. Why? Firstly it has performed better than BP in recent weeks and there is evidence of switching to Shell. Also BP’S stake in Rosneft (contributing a profit of just $124 million) looks like a slightly non-performing asset whilst relationships between Russia and the West are so strained. Up until this morning both oil magnates had added just short of 21% in the last year. Shire Pharmaceuticals are due to post results later this morning. Standard Chartered’s CEO Bill Winters has probably thrown the kitchen sink at this bank and many expect a profit of $530 million for the last trading period. However it came in a little short at $458 million


UK companies posting results this week – Tuesday – Standard Chartered Bank, Go-Ahead, Moneysupermarket, BP, Royal Dutch Shell, Shire Pharmaceuticals, Weir Group, Hastings Wednesday – JD Wetherspoon, Persimmon, Next, Just Eat, OneSavings Bank, Thursday – Inmarsat Wm Morrison, Smith & Nephew, Centrica, Prudential, Tate & Lyle, Randgold, RSA, Friday – Paddy Power Betfair, Informa

  US companies posting interim results this week – Tuesday – Ford (sales), Pfizer, Kellogg, Pitney Bowes, Archers Daniel Midland, Match, Wednesday – Time Warner, Facebook, Thursday – Costco, Cigna, Hyatt Hotels, Kraft Heinz, Met-life

    Economic data this week – Monday Chicago PMI, Tuesday – UK manufacturing PMI, US Manufacturing PMI, Wednesday – BRC Shop Price Index, UK PMI Construction, US FOMC statement, Thursday – UK PME Services, Inflation Report, MPC meeting



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]]6 Market Commentator

D +44 (0)20 7886 2775 Panmure Gordon & Co 


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