TODAY’S FAYRE – Sunday 6th November 2016


“O, Wild West Wind, thou breath of Autumn’s being-

Thou from whose unseen presence the leaves dead

Are driven, like ghosts from an enchanter fleeing,

Yellow, and black, and pale, and hectic red,

Pestilence-stricken multitudes! – O thou

Who chariotest to their dark wintry bed

The winged seeds, where they lie cold and low,

Each a corpse within its grave, until

Thine azure sister of the Spring shall blow

Her clarion o’er the dreaming earth, and fill

(Driving sweet buds like flocks to feed in air)

With living hues and odours plain and hill-

Wild Spirit, which art moving everywhere –

Destroyer and Preserver – hear, O hear!


If I were a dead leaf thou mightiest bear;

If I were a swift cloud to fly with thee;

A wave to pant beneath thy power, and share

The impulse of thy strength, only less free

Than thou, O uncontrollable! – if even

I were as in my boyhood, and could be

The comrade of thy wanderings over heaven,

As then, when to outstrip thy skiey speed

Scarce seem’d a vision, – I would ne’er have striven

As thus with thee in prayer in my sore need.

O lift me as a wave, a leaf, a cloud!

I fall upon the thorns of life!  I bleed!

A heavy weight of hours has chain’d and bow’d

One too like thee –tameless, and swift, and proud.”



Percy Bysshe Shelley – poet – 1792- 1822


Their Lordships in the High Court don’t need a lesson from me in democracy and it would be impertinent of me to challenge their ruling on Gina Miller’s and her mates’ submission that Parliament must approve the terms of BREXIT rather than the government. However they cannot be remotely surprised at the visceral reaction by many of the 17.4 million who voted for BREXIT. Why? For two reasons – Firstly many are of the opinion that Nick Clegg and his 7 Lib-Dem MPS plus 100 of their unelected peers together with other disenchanted ‘Remain’ MPS, will do all in their power to block, disrupt and attempt to destroy the will of the majority, which won the EU Referendum vote on 23rd June 2016. Secondly about 480 MPS out of 650 in the House of Commons are for choice, ‘REMAINERS!’ Can they be trusted not to adopt delaying tactics which could be unbelievably damaging for the UK’S growth and prosperity? Many have their doubts and these fears are not without foundation. Investors have been sitting on their hands for some months due to the uncertainty surrounding BREXIT. Any lengthy delays in delivering this legislation will exacerbate the uncertainty factor, which to some degree, we are told, could dampen further expansion and investment plans for the future.


I am sure their Lordships do not take political considerations in to account when making their judgements – nor should they.  They just interpret the law as the democratic process would want them to.  However these are not normal times we live in and the ramifications are far reaching; even more so when ‘BREXITEERS’ & ‘REMAINERS’ are either angry with each other or grossly unsympathetic to their respective causes. If anything remotely looking like sensible terms are to be agreed, there has to be a little give and take down the road.  There should be some agreement within the UK before setting down our stall to the likes of Juncker and Barnier, who to date seem only interested in playing hard ball.


As a passionate BREXITEER let me tell you where I stand.  Firstly my commitment is down to sovereignty, trade and the fact that I don’t believe that the undemocratic EU will exist in a decade. Immigration is not on my agenda, apart from wanting greater and sensible controls.  Welcoming international friends has been hugely beneficial to this country.  The UK is also a great place to work and an inflow of the professional and aspiring classes must be right.  There are also 670,000 jobs unfilled in this country that people living in the UK will not do – beneath their dignity. In order to turn the decision made through the ballot box turned in to legislation, there has to be some give and take of accommodative importance. Otherwise this spat is going to gather momentum, rather than reach an amicable and sensible conclusion.


Against the background of such a bitter and nasty Presidential election campaign it is almost impossible to make contingency plans for either a Clinton or a Trump administration. Were Trump to land the spoils next Tuesday 8th November defence and infrastructure stocks could prove an attractive option – General Dynamics, Honeywell, Raytheon, Northrop Grumman, Boeing, United Technologies and the likes of Caterpillar will appear on many shopping lists. However most observers and commentators are expecting a massive sell-off. I hope they are being over-zealous in their negative expectations. If Mrs Clinton were to be returned to that White House on Pennsylvania Avenue then a long position will be taken in Dollars.  I suspect punters might find themselves rather short of pharmaceuticals such as Pfizer, Merck and Abbvie; such is Mrs Clinton’s quest to kill off competition in this most important of sectors in the next twenty-five years. Bond yields will be driven by noise within broader global trends, rather than any election outcome.

But for three large M&A deals, the selloff in the US could have been more pronounced.  The froth generated from deals of this nature very often tends to create a false dawn. One just gets that feeling that these mega-mergers and share buy-backs are camouflaging a somewhat average earnings season or the realisation that equities are probably over-valued. Anyway at the beginning of this week out of the autumn haze and colours of a New York ‘fall’ came the announcement of three large deals – GE’s acquisition of Baker Hughes, which had been on the stocks for some months in a $25 billion deal. Two telecom titans – Century Link and Level-3 Communications announced they were pooling resources in a $34 billion trade and finally Blackstone swept up Team Health for $6 billion.  That was quite enough excitement in one day. The 3rd quarter earnings season pottered along without the huge excitement we had experienced from some slightly disappointing results from Apple and Amazon last week. Pfizer, Merck and Eli Lily felt the potential wheels of pain metaphorically across their back from the threat of a Clinton administration, rather than under-performing. Also despite a stellar performance by Facebook in the last quarter with revenues of $7.01 billion, warnings that advertising revenues were likely to dip in the future was sufficient to take its share price down by 5.6%. Of all the US indices the NASDAQ has suffered the most in the last week – down 3.5% – a reflection of high expectations for technology which many results failed to deliver. In the same period the DOW eased by 1.6%.


Here in Europe UBS posted improved efforts, though Credit Suisse’s results for the last quarter left investors disappointed.  The banking sector in Europe has had a surprisingly decent run on the rails in the past month but it was noticeable that profit takers took some risk off the table, with Deutsche Bank surrendering 7% last week. HSBC posts its efforts this coming Tuesday, which will be eagerly awaited. It was good to see the continued revival of Wm Morrison. The 4th largest UK supermarket posted a 3.4% like for like sales increase on Thursday for the last quarter. Its shares have risen 58% in the last year under CEO Dave Potts’s guidance. However retail has not been a fertile hunting ground in the UK this year.  I fear that M&S’S efforts may not warm the cockles of our hearts, when it reports on 8th November. It is rumoured that M&S will be closing many of their 174 overseas stores together with some of the joint Russian enterprise which has 190 shops. There will also be redundancies at head office – Maybe 300.  Food sales will be good but general merchandise could be poor.  Last week the FTSE eased by 4.2% with European bourses easing by 2.9% and 2.7% in value respectively.


Having finally put BOE Governor Mark Carney’s future to bed until June 2019, supposedly post the BREXIT negotiations, though with the current uncertainty prevailing, I have my doubts, the content of Thursday’s Inflation Report on growth made very interesting reading. It appears that officially GDP for 2016 will be close to 2.3%. The Bank of England feels that GDP for next year will be up from 0.8% originally forecasted to 1.4% and for the next three years down from 2.7% to 2.5%.  Inflation is likely to reach 2.7% by the 4th quarter of 2017. If BREXIT inertia sets in, these forecasted numbers could be meaningless! 


 UK companies posting results this week – Monday – HSBC, Informa, Dignity, Hiscox, Tuesday – Aveva, M&S, AB Foods, Imperial Brands, Punch Taverns, Direct Line, Wednesday – Burberry, J Sainsbury, Experian, SSE, Workspace, Tullow, Mylan, Fltbe, Thursday – UBM, Vedanta Resources, 3i Group, SuperGroup, Auto Trader, ITV, Dairy Crest, Hikma Pharmaceuticals, Aldermore, Beazley


US companies posting interim results this week –Monday – MGM resorts, Dean Foods, Gap, Tuesday – DR Horton, Wednesday – Viacom, Wendy’s, Thursday – Sigma, Macy’s, Walt Disney, Friday – JC Penney


Economic data this week – Monday – US Consumer Credit, Tuesday – US Presidential Election, BRC Retail Sales, UK Trade Balances, NIESR GDP, Wednesday – RICS House Prices, UK industrial Production, UK Wholesale inventories, Thursday – US Initial Jobless Claims, Friday – UK Construction output.


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




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