TODAY’S FAYRE – Tuesday 8th November 2016
IF I should die, think only this of me:
That there’s some corner of a foreign field
That is forever England. There shall be
In that rich earth a richer dust concealed;
A dust whom England bore, shaped, made aware,
Gave, once, her flowers to love, her ways to roam,
A body of England’s, breathing English air,
Washed by the rivers, blest by the suns of home.
And think, this heart, all evil shed away,
A pulse in the eternal mind, no less
Gives somewhere back the thoughts by England given;
Her sights and sounds; dreams happy as her day;
And laughter, learnt of friends; and gentleness,
In hearts at peace, under an English sky.”
Rupert Brooke – poet & soldier – 1887- 1915
On ‘Talk-Radio’ yesterday one had to admire Julia Hartley-Brewer’s pluck in asking Gina Miller how much her ‘High Court’ case cost her. I think hell had a better chance of freezing over than M/S Miller telling her. One observation I would make is the fact that wealth and money does buy you power! If an ordinary ‘Fred Bogg’ like me had tried to bring a plea of that magnitude to the High Court, they would never have been able to afford it.
How does The Daily Mail’s Quentin Letts keep coming up with such memorable quips? Today’s little cameo effort was – “Emily Thornberry curled her lips like a stale samosa!” Hilarious! He has such a wonderful command of the English language with the occasional painful acerbic comment! – Quite a cocktail.
Thank God it is nearly over! – This truly awful Presidential election campaign, which did absolutely nothing to enhance the reputation of the USA as the role model for democracy. Whoever wins and it looks like Clinton by a short head, with most of the pollsters having the Democrat nominee 2-3 percentage points in the lead, has a gargantuan task on their hands in attempting to unite a divided nation with so many factions of its culture at odds with each other. Here we have two of the most unpopular candidates in living memory – Clinton and Trump. Clinton has better credentials but so many skeletons in her cupboard for the US electorate to be proud of her. As for Donald Trump; he has thrown a spanner in the works of convention. He is exposing the contempt much of America has for Wall Street and the establishment and voters are listening.
Let me throw a spanner in the works and I hope that I am TOTALLY wrong. In 2012 235 million people were eligible to vote. 129 million voted – 54.9%. This year so far 40 million votes have already been cast. They say another 90 million votes will be cast today. What happens if we have a re-run of BREXIT and the protest vote girds up its loins and galvanises its troops and the percentage vote increases to say 64%? My heart sinks. But don’t entirely rule it out!
On that note – now to the markets; yesterday the FBI came charging over the hill to assist the damsel in distress and it triggered a measurable relief rally in global equities. Asia was relatively responsive. London was greatly buoyed up with the FTSE 100 adding 113 points to 6806, with European bourses enjoying similar gains. New York was euphoric in its response with the DOW adding 2.08%, the S&P 500 2.22% and the NASDAQ 2.37%. This was the largest daily gain since March. It was the banks that purred like Cheshire cats – Wells Fargo, Citibank, Goldman and Bank of America – all up between 2.5% and 3.8%. Gains were across the spectrum with energy perhaps attracting above average attention. From the tech sector Alphabet was up 2.8%, Apple by 1.4% and Microsoft by 2.9%.
In London, oil and mining stocks were the two sectors that gained the most. However it was HSBC, which all but grabbed the yellow jersey – up 4.6% – not so much on the results with profits down 86%, but more because it was a kitchen sink job – all the skeleton out of the cupboard. CEO Stuart Gulliver was very upbeat about investment banking going forward. However there was no news as to who will replace Douglas Flint as chairman at the end of the year and what plans do the ‘local’ bank have to replace Stuart Gulliver, next year.
This morning M&S posted a pretty dire set of numbers – much expected as CEO Steve Rowe marked the press’s cards over the weekend. The emphasis going forward is now food. M&S will be getting rid of 60 shops and opening more ‘Simply’ outlets. The management will be reviewing their overseas operation which has 300 outlets and has lost £51 million. These contingency plans are all very well but the REAL problem is the fashion – no change; It’s DOWDY – like for like sales down 5.9% in the last 6 months and food surprisingly down 0.9% in the same period. Belinda Earl has been there two years and it is not working. M&S made £1 billion profit in 1997 and 2007 and have not got close since. A profit of £575-£600 million might be attained. How M&S can keep maintaining the dividend with these awfully dispiriting numbers escapes me. Everyone else – staff, suppliers etc are getting shafted! I keep saying it – M&S should merge with a company like NEXT with complementary businesses. Not surprisingly no one is listening.
Imperial Brands posted excellent numbers – EPS up 12% – shares down 3% – why – traveled and arrived – Too many people owning them and IMPS looks a little expensive to many. AB Foods, Direct Line, Punch Taverns and JLT all posted satisfactory efforts without setting the world on fire. RBS has set aside £400 million to settle clients’ grievances with its restructuring unit.
On the economic front BRC posted the best retail sales number for 9 months – up 1.7%. The news from the Treasury that there may be a £25 billion black hole in the public finances will require Chancellor Hammond’s early attention at the Autumn Statement. Lower tax revenues and falling growth have been blamed.
UK companies posting results this week – 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 – Tuesday – DR Horton, Wednesday – Viacom, Wendy’s, Thursday – Sigma, Macy’s, Walt Disney, Friday – JC Penney
Economic data this week – 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 D +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