TODAY’S FAYRE – Sunday, 4th December 2016


Summer is fading:
The leaves fall in ones and twos
From trees bordering
The new recreation ground.
In the hollows of afternoons
Young mothers assemble
At swing and sandpit
Setting free their children.

Behind them, at intervals,
Stand husbands in skilled trades,
An estateful of washing,
And the albums, lettered
Our Wedding, lying
Near the television:
Before them, the wind
Is ruining their courting-places

That are still courting-places
(But the lovers are all in school),
And their children, so intent on
Finding more unripe acrons,
Expect to be taken home.
Their beauty has thickened.
Something is pushing them
To the side of their own lives.”


Philip Larkin – poet – 1922-1985


I have had a great time last week, chilling out and recharging some fairly flat batteries.  I feel refreshed and was also invigorated by catching up on a few movies – ‘The Accountant’ with Ben Affleck and Anna Kendrick – an improbable thriller – real escapism – with Aflick playing the part of a young genius with acute Asperger’s. It was exciting, but the plot was so far from reality, it was laughable.  I then took in ‘United Kingdom’ – the story of Bechuanaland’s transition in to Botswana in the ‘50s and ‘60s with David Oyelowo and Rosemond Pike portraying the starring roles.  The script was a bit too schmaltzy for me but the more I see of Miss Pike, the more polished an actress I believed her to be.


Finally ‘Sully’, starring Tom Hanks was my final choice of the week. Do you remember that US Airways jet, who engines were infiltrated by birds, having just taken off from La Guardia, was forced to put down on the Hudson River in 2009 with all 155 passengers being miraculously saved? – A complete miracle. This is a fascinating heart-warming and uplifting movie – well worth seeing – with Steve Mnuchin, the new US Treasury Secretary producing and financing Clint Eastwood’s brilliant film, as he did ‘The Accountant!’ It is interesting to note that Clint Eastwood thinks this is the best film he has ever made.  He is 86 years young! Amazing!


The outcome to the Richmond Park by-election was as predictable as the nose on the end of my ugly face. All this cobblers talked about by the ‘political glitterati’ that Sarah Olney’s victory was down to a wave of anti-Brexit hysteria is just arrant nonsense. Richmond at the Referendum had already voted 2.25-1 in favour of REMAIN.  Also the Tories did not contest the seat.  The electorate was incandescent with Zac Goldsmith for disloyalty, despite the fact he always said ‘Heathrow’ was pivotal for him, and the truly ghastly Mayor of London campaign he fought!  Now look who London is saddled with for the next 3.5 years? Little Timmy was effervescence personified and is no doubt a brilliant constituent MP, but he’s no Lloyd-George! I am also told that he spent very little time in leafy Richmond, which for decades has been more Liberal than Tory – Jenny Tongue in 1997 and Susan Kramer in 2005. It has for donkeys’ years been a constituency for the arts, civil servants, education, Guardian readers, wearers of sandals with many a fellow sporting designer stubble or a beard – lovely people, who strive for Utopia, but they do not live in the same world as I do!


The first 3 weeks of November was a period of unexpected euphoria for stocks in the US – probably this year’s Santa rally – with many other global indices joining in all the fun of the fair. Trump mania encapsulating lower taxes and infrastructure spending provided sufficient impetus for equities in many sectors to make that quantum leap forward. Though President-Elect Trump has made many key appointments including Steve Mnuchin as Treasury Secretary, Wilbur Ross as Commerce Secretary and General James ‘Mad Dog’ Mattis as Defence Secretary, which gives us plenty guidance as the culture of Trump’s administration, we are still waiting to hear if Mitt Romney or Rudi Giuliani is going to be Secretary of State.  As little can happen in the way of policy changes until 20th January 2017, the markets unsurprisingly must turn its attention to reality rather than surmising about Trump’s intentions or continuing to tinker with ideology!

Markets were faced with a litany of issues last week. Corporate earnings and a possible rise in US interest rates next week, which will be given some credence by Friday’s US Payroll numbers for November (+178k), with unemployment down to 4.6% and wage increases of about 2.5%. 15 million jobs have been created since 2010.  Add this news to the fact that the US economy is in good shape with manufacturing leading the charge and this could result in FED’S Janet Yellen and her colleagues raising the FED rate by 25 basis points this coming week. There has also been an exceptionally large, almost dangerous increase in bond yields, with US Treasuries now at their highest level since 2009.  It is thought that bond markets in recent weeks has surrendered $1.7 trillion in value.


These nuggets of news seemed plenty for market observers and participants to get their teeth in to.  However they have also had to add the dark clouds of uncertainty from this Sunday’s Italian Referendum to deal with, as well as the parlous state of the Italian banking sector (the sector’s value has fallen 48% this year). Further to that, Marine Le Pen looms on the horizon as a real threat to Francois Fillon in France’s Presidential election in April, particularly as Hollande will not be running.  If Le Pen wins, France will almost inevitably take its leave from the EU.  It may seem a frivolous addition to last week’s agenda, but OPEC’S decision to cut output was momentous, even though the agreement looks a little shallow. Crude oil rallied above the $50 a barrel threshold last Thursday.


Global indices, after a great start to the week, started to run out of steam and lost a bit heart, as the Dollar tipped off its higher levels of the week as did Treasuries. Investors also took a little risk off the table ahead of Sunday’s Italian Referendum. Last Friday the S&P 500 closed down 0.95% on the week with the FTSE easier by 1.61%, partly due to a shake out of mining stocks, apart from Glencore. The banking sector faired not too badly apart from RBS, which failed Monday’s BOE stress test, which requires Edinburgh based operator to raise circa £2 billion or the sale of the requisite number of assets. Rolls Royce experienced another bad week, losing over 3% on Friday. EasyJet also suffered some blues on balance sheet issues.  Its share price has fallen 44% this year. European indices feared a little better falling by an average of 0.92%.  The Nikkei bucked the trend adding 0.24%. In the US it was the energy sector that buoyed the main indices adding 3.1% last week and over 7% since the Presidential election. Just to add a little spice to the eek there was plenty of M&A gossip, both transatlantic and European – Johnson & Johnson is looking to buy Actelion with Praxair is hoping to merge with Linde. Also there was idle gossip that BBVA may acquire Italy’s Banca Populare.


UK Companies posting results this week – Monday – GW Pharmaceuticals, St Modwen, Purplebricks Group, Tuesday – Victrex, Ashtead, Wolseley, Imagination Technologies, Wednesday – DS Smith, Kromek, Carillion, Stagecoach, Thursday – Mulberry, Sports Direct, Ocado, Capita, Friday – Photo-Me, John Laing


US Companies posting interim results this week – Tuesday – Barnes & Noble, Toll Bros, Wednesday – H&R Block, Thursday – Ciena, Dell Technologies,


Economic data this week – Monday UK PMI Services, US PMI Services, Tuesday – BRC Retail Sales, US Trade Balance, Wednesday – UK industrial production & manufacturing output, NIESR UK GDP, Thursday – UK Trade Balance, ECB Press Conference, Friday – RICS Housing Data, UK Consumer Inflation & 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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