TODAY’S FAYRE – Tuesday, 10th January 2017
“Out of the night that covers me,
Black as the pit from pole to pole,
I thank whatever gods may be
For my unconquerable soul.
In the fell clutch of circumstance
I have not winced nor cried aloud.
Under the bludgeonings of chance
My head is bloody, but unbowed.
Beyond this place of wrath and tears
Looms but the Horror of the shade,
And yet the menace of the years
Finds and shall find me unafraid.
It matters not how strait the gate,
How charged with punishments the scroll,
I am the master of my fate,
I am the captain of my soul.”
William. E. Henley – poet – 1849-1902
Like many other observers of the political circus that is Westminster, I was pleased to see PM May come up with some serious domestic and social issues to define her Premiership, though after today’s lengthy speech, we are all be looking for much more meat on the bone. Though BREXIT is understandably all consuming, Mrs May has said very little on policy for a few months. She leaves far too much to Nick Timothy and Fiona Hill, who are originally Home Office appointees and are still learning ‘on the hoof.’ Frankly the country wants to hear from the ‘Engine Driver’, when at all possible, rather than her oily rags!
Extraordinary and totally gratifying that ‘Lala Land’ should clean up with 7 awards at the Golden Globes, including best film, best actor and best actress. I was also delighted for Clare Foy for her ‘globe’ as best actress in a TV drama portraying HM the Queen in ‘The Crown,’ – superb interpretation in a brilliant performance. Also ‘hats off’ to Tom Hiddlestone, Olivia Coleman and in particular to Hugh Laurie for their awards in ‘The Night Manager.’ Hugh Laurie over the years has excelled with ‘Blackadder’, ‘Jeeves’, ‘House’ and finally this TV drama – a acknowledgement of his fantastic versatility!
Though there is still 10 days to go to the inauguration, President-Elect Trump is leaving everyone in no doubt that when it comes to business and trade the USA is ‘numero uno.’ He has certainly sent the auto industry back to base for a rethink on where their responsibilities lie!
Interesting that PM chose to give her first major interview for the year to SKY’s Sophy Ridge – she’s very good. However Mrs May’s comments on BREXIT/Single market/non-binary issues appeared nebulous and inconclusive to the market place, despite good intentions to not rock the boat. So down went the Pound to $1.21 and up went stocks on the LSE – the tenth consecutive day for gains, though not excessive; nonetheless very constructive. Needless to say Dollar related earnings benefited with mining and tobacco stocks putting their best foot forward. William Hill failed to spoil the day with a very disappointing trading statement. Punters have narrowed Hill’s margins with discouraging football and racing results, resulting in profit forecasts being adjusted to the lower end of expectation – £260 million. Shares closed down 2%, though were at one point were 3.8% easier. The FTSE 100 closed up 27 at 7237.
The more the prophets of doom drone on about the inevitable damage BREXIT will do to the economy, the more the market seems comfortable to take it on the end of the chin and it keeps bouncing back on the back of encouraging economic data. There were several nuggets of interesting news yesterday. Tesco have cut their distribution centres from 25 to 23 courtesy of on-line trading increasing in importance! Tesco has also served notice to Wincanton & DHL that their services are no longer required. A net 500 redundancies will be made! Aldi saw sales up 15% year on year in December with 70 new units opening. This German titan is not going away. According to Halifax house prices grew 6.5% year on year from December. However the building society lender believes that growth will fall thanks to uncertainty over BREXIT. There was a major bright note yesterday from the tech sector. 49% of those surveyed by Tech City UK were positive about the economy this year against 8% in early July of last year.
The market saw a slew of earnings this morning – many of them retail. Whitbread was the subject of an upbeat note from Credit Suisse (+1.5%). The Yellow Jersey was quite rightly grabbed by Wm Morrison. CEO Dave Potts has achieved wonders with this Bradford based operation. Shares were up by 58% last night from a low of 150p a year ago. Transaction growth was up 5.2% for the last 9 weeks – the best figure for 7 years. Like-for-like sales were up 2.9% and 2% ex fuel – shares up 4% at 8.30am. Boohoo posted a 52% increase in sales over the past 4 months and 46% in the last 10 months – shares +1%. Just Eat’s 36% growth target seemed inadequate for the market place. Expectations were high; consequently shares were taken down by 5.2% in early skirmishes.
Yesterday on the Street of Dreams the NASDAQ reached record levels with Apple and biotechs showing the way. Energy prices blunted any possibility of progress for the DOW and S&P. The DOW closed down 0.38%, with the S&P easier by 0.35%, with the NASDAQ adding 0.19%. Asia enjoyed a rather lack-lustre session with the strength of the Yen doing little in the way of favours for the NIKKEI (-0.8%). The ASX was down 0.8%, with the Hang Seng up 0.8% and the Shanghai Composite providing little guidance – down 0.3%.
Set out below is Panmure Gordon’s CONVICTION LIST FOR 2017
AVON RUBBER, CARETECH, EPWIN GROUP, GEM DIAMONDS, HOGG, ROBINSON, INFORMA, McBRIDE, MORSES CLUB, ROYAL DUTCH SHELL, St JAMES’S PLACE, WIZZ AIR,
UK companies posting interim results this week – Tuesday – Boohoo, Wm Morrison, Topps Tiles, Majestic Wines, Just Eat, Robert Walters, McBride, Wednesday – J Sainsbury, Fenner, Pagegroup, Tullow Oil, Taylor Wimpey, Ted Baker, Saga, Thursday – Tesco, M&S, Debenhams, AB Foods, Premier Oil, ASOS, AO World, Henderson Group, Dunelm, SuperGroup, Barratt Development, Hilton Foods, Mothercare, Booker, Hays, Friday – SIG
US companies posting interim results – Wednesday – KB Homes, Thursday – Delta Airlines, Friday – Blackrock, JP Morgan Chase, Wells Fargo, Bank of America
Economic data posted this week – Tuesday – NIESR GDP, Wednesday – UK industrial production, Manufacturing output, Construction & Goods Trade, Thursday – RICS House prices, Friday, BOE Credit Conditions, US Retail, US Business inventories
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