TODAY’S FAYRE – NEW GOVERNOR MARKET THOUGHTS

 

TODAY’S FAYRE – Wednesday 2nd November 2016

 

He loved her and she loved him
His kisses sucked out her whole past and future or tried to
He had no other appetite
She bit him she gnawed him she sucked
She wanted him complete inside her
Safe and sure forever and ever
Their little cries fluttered into the curtains

Her eyes wanted nothing to get away
Her looks nailed down his hands his wrists his elbows
He gripped her hard so that life
Should not drag her from that moment
He wanted all future to cease
He wanted to topple with his arms round her
Off that moment’s brink and into nothing
Or everlasting or whatever there was
Her embrace was an immense press
To print him into her bones
His smiles were the garrets of a fairy palace
Where the real world would never come
Her smiles were spider bites
So he would lie still till she felt hungry
His words were occupying armies
Her laughs were an assassin’s attempts
His looks were bullets daggers of revenge
Her glances were ghosts in the corner with horrible secrets
His whispers were whips and jackboots
Her kisses were lawyers steadily writing
His caresses were the last hooks of a castaway
Her love-trick were the grinding of locks
And their deep cries crawled over the floors
Like an animal dragging a great trap.”

 

Ted Hughes – poet laureate- 1930- 1998

 

The markets yesterday have shown their first sign of pre-Presidential election nerves right across the globe.  The prospect of a Trump administration has come fully in to focus.  The Polls have narrowed.  The BBC maintains Clinton will win 48-46%, but CNN and Reuters- Ipsos have Trump 2% in the lead with six days polling to go! Equity investors are starting to show signs of anxiety, as portfolio managers lighten up across the globe.  Few people have the slightest idea of what a Trump administration will mean.  This is like an Agatha Christie ‘who-dunnit’ quietly unfolding with an unexpected ending, which may not be to everyone’s taste.  All I think we can say is, that as it transpired at the UK’S EU Referendum vote, the establishment is in danger of getting a good kicking! Bond yields have been ticking up as traders suffer from pre or post-prandial neurosis ahead of the FOMC tonight.  Also gold, often considered a safe haven of rest has, bounced quite sharply to $1293 an ounce!

Yesterday we put behind us the ‘Mark Carney Saga’ – will he stay? Won’t he? The market is very pleased he’s staying until 2019, though we would have preferred the full tenure to 2021. Bookmakers were starting to sort out who they might flag up as leading candidates to become the next governor and it went something like this, depending of course as to whom you spoke to. Andrew Bailey 2/1, Sir John Cunliffe 3/1, Minouche Shafik 5/1, Sir Paul Tucker, Andy Haldane 11/2, Ben Broadbent 6/1, Sir John Kingman 8/1, Andrew Sentence 10/1. There will be plenty more speculation between now and then – 1919 is 3 years away, without stating the obvious.  By then the dramatis personae could be very different.

Great to see Pep Guardiola’s Manchester City put Barcelona to the sword 3-1 at the Etihad last night – Messi, Neymar, Suarez et all. The former Barcelona coach is obviously a very special master at tactician. What a demolition job!

 

 Yesterday on the Street of Dreams the S&P 500 fell for a sixth consecutive session to end at a nearly four-month low as investors grappled with a tightening presidential race, economic data, corporate earnings, and the Federal Reserve’s monetary policy decision, which will be posted tonight.  We expect no change.  A 25 basis point hike is expected next month. Pfizer posted earnings, which mildly disappointed – shares -2%. Conversely Archers, Daniel Midland pleased their acolytes and its share rose like the proverbial grilse – +7.3%.  L-Brands had no such luck with disappointing numbers – down 7%!

 

Before the NYSE bell tolled, the FTSE was in the process of surrendering 37 points yesterday to 6917. The day started positively with great numbers from Royal Dutch Shell – shares up 4%, but during the morning closer inspection on BP’S numbers saw its share price slide by 4.4% on the day.  Profits were a little light with inadequate cost controls.  However BP had performed better than Shell in recent weeks there was evidence of a transfer of affections away from BP to Shell.  It appears the acquisition of BG Group is starting to pay dividends, which incidentally both companies maintained. Whilst relations with Russia and the West are strained at best, BP’s joint venture with Rosneft only produced $124 million profit against $250 million last time.  This asset is likely to underperform until we see some appeasement in attitude. Moneysupermarket grabbed the yellow jersey for the day adding 10.3%. Ladbrokes,Coral confirmed their deal and there was a positive note out from Morgan Stanley about the merged operations, which is likely to increase market share from 10.6% to 12.1%.  Standard Chartered Bank’s effort failed to pass muster.  Profits of $458 million for the quarter fell short of the $530 million expectation number and there were also issues about an IPO of China Forestry in HK, which could prove costly. Shire numbers were also felt to have been short despite income increasing by 109% in the last trading period having added Baxalta to its portfolio.  The shares fell 7% initially but recovered to be down only 3% at the close.

 

This morning the blue sentiment swept across Asia resulting in the NIKKEI closing -1.76% and the ASX -1.16%.  The Shanghai Composite was down 0.47% and the Hang Seng was a fair bit easier down 1.34% at lunchtime. There are a slew of earning this morning.  Firstly NEXT’s sales were disappointing as predicted. Full price sales for the year are down 1.5% and marked down sales -0.4%.  However in the last quarter sales are down by 5.9% though the Directory sales are up 3.2% year to date. The retail space remains very competitive with little inflation to date, but next year the fall in the Pound may have filtered through to create a measurable inflation rate. In the last year NEXT’s shares have fallen 39%! Persimmon’s results look good with sales up 4%.  The UK’s largest house builder will be concentrating on the affordable end of the market including public sector renting.  Some slight concern was expressed about land investment going forward.  Since EU referendum day Persimmon’s shares have recovered – up 34%

 

UK companies posting results this week – 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 – Wednesday – Time Warner, Facebook, Thursday – Costco, Cigna, Hyatt Hotels, Kraft Heinz, Met-life

 

Economic data this week – 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 
One New Change | London | EC4M 9AF | United Kingdom
www.panmure.com

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