TODAY’S FAYRE

 

TODAY’S FAYRE – Sunday, 15th January 2017

 

My heart is like a singing bird
Whose nest is in a water’d shoot;
My heart is like an apple-tree
Whose boughs are bent with thickset fruit;
My heart is like a rainbow shell
That paddles in a halcyon sea;
My heart is gladder than all these
Because my love is come to me.

Raise me a dais of silk and down;
Hang it with vair and purple dyes;
Carve it in doves and pomegranates,
And peacocks with a hundred eyes;
Work it in gold and silver grapes,
In leaves and silver fleurs-de-lys;
Because the birthday of my life
Is come, my love is come to me.”

                                                                                                                                         

Christina Rossetti – poet – 1830-1894

 

OBITUARY – The Times – LORD SNOWDEN – Photographer and husband of Princess Margaret for whom a day without work or sex was a day wasted! – What a headline!

 

Readers of my missives know only too well that I am not a fan of the WEF in Davos.  However to a man/woman I am confident that they will get over it! However I understand that no supporter of BREXIT has been asked to contribute to the debate apart from PM May, who I am confident will not be hanging around for the ‘DP’ and ‘Cristal’ afterwards.  Regardless of agreement or opposition to BREXIT, one could be forgiven for thinking that delegates would like to hear balanced presentations.  When will the establishment learn the errors of its ways?

 

 As Jeremy Corbyn continues to slip and trip up on any political banana skin going, support for Labour will continue to go in to free-fall. Tristram Hunt behaved very diplomatically as he threw in the towel as MP for Stoke. His background as a distinguished historian surely suggests that he will undoubtedly be much more in his element as Director of the V&A.  When the Corbyn charade eventually runs out of steam, surely Labour will look to Sir Kier Starmer or Hilary Benn to pick up the pieces from the smouldering ashes of the Labour party and attempt to put them together again?  In the case of Benn, he comes across very well as a balanced thinker, who has a fair bit of charm.  I was impressed by his interview with BBC Radio 4’s John Humphrys in his capacity as chairman of the Parliamentary Select Committee on Brexit. Perhaps I am naïve, as the composition of the Committee is unfairly loaded in favour of ‘Remainers’; nonetheless I believe that Benn is a man of integrity, who will not be subversive in holding up the will of the people from leaving the EU at the earliest sensible opportunity! We shall see!

 

 As the FTSE 100 continued to blaze the trail, adding 1.7% last week, the culmination of a 14 consecutive sessions of gains, US markets trod water nervously, easing a smidgen by 0.09%. The reason for rumination and inertia was the astonishing allegations surrounding President-Elect Donald Trump, who will officially be inaugurated as the 45th President this coming Friday, which caused investors to stop in their tracks. The allegations were so salacious and incriminating that the wind was taken out of the sails of investors and political observers alike. Russia, the CIA, MI6, Christopher Steele and Donald Trump are all currently sitting very uncomfortably in their own dock. Assuming these allegations prove groundless, the President-Elect will be out for a decent chunk of retribution. There will be no hiding place. European stocks also selected a neutral gear, up by a parsimonious 0.16% on the week. Life in Asia was just as somnolent – the Nikkei fell by a mere bagatelle – 0.86%. The Yen was painfully strong for much of the week, which not very constructive for exporters.

 

 In London last week it was all about retail activity over the Christmas and New Year holiday sales.  Clearly the demographics for retail have changed and will continue to do so.  Black Friday has become the most important sales period on both sides of the Atlantic, thus sales around Christmas are less fulsome.  Also moving forward sales executed on smartphones and iPhones are becoming increasingly dominant.  It was interesting to note that John Lewis Partnership acknowledged the change in retail culture and saw sales on smartphones/iphones increase by 80.9% in their last trading period. M&S for once almost pleased their acolytes with a 2.3% increase in general merchandising sales – the first quarterly gain for all but two years.  However shares are down 21% in the past year. Morrison probably grabbed the yellow Jersey for the supermarket sector. The Bradford based emporium has seen its shares price gain 40% in the past year, even outstripping Tesco – up 30%.  Like for like sales were up 1.5% over Christmas – marginally disappointing, nonetheless as results go, in comparison to 18 months ago, they were satisfactory. 

 

 Bohoo and ASOS have been the real winners last week – respective shares up 314% and 71% in value respectively in the last year – both classic examples of a very successful on-line operations. AO World lost 9% on Thursday with Panmure’s Mike Stewart still believing the valuation of the company is still looking a little rich. Next week investors are hopeful that Burberry will deliver the goods with China back as an acolyte of this brand.  In terms of contribution to the increased value of the FTSE in recent sessions, look no further than mining and oil stocks. PM May’s rather nebulous comments about membership of the single market or not, skimmed some cream off the top of Sterling – not that there was much to skim! Falling sterling has proved a decent trigger point for the FTSE 100 to put its best foot forward.

 

 It took the Street of Dreams a few days to crank itself up last week, apart from endlessly ruminating over a Trump Presidency. JP Morgan Chase, Bank of America and Wells Fargo posted their interim results on Friday.  All three banks plus Citibank and Goldman Sachs have seen their respective share prices rally by over 20% in the last 2 months.  So Friday’s results were expected to be encouraging, having seen one rate hike and the promise of two more in 2017, as well as the possibility of the Dodd/Frank act being repealed. The market was not disappointed with JPM. Its share price added 1.5%, with Wells Fargo grabbing 2% and BOA 1% plus change.

 

 There is a significant amount of chuntering going on amongst fund managers over what is consistently described as undeserved fat-cat pensions as well as bonuses, which bear little resemblance to performance.  Maybe we will see major shareholders in FTSE 100 companies making a real stand on this subject rather than consistently abrogate their responsibilities. Blackrock has promised to play its role and one of the first CEOS not to already have come under the cosh, may be IMPS’S Alison Cooper. Despite the grey cumuli nimbus clouds of BREXT, it appears that LOGICOR will take its IPO bow in the next few months with a £13 billion valuation. LOGICOR owns about 600 warehouses in 17 countries, with Amazon an important customer.  Blackstone is the seller and Goldman Sachs and Eastdil Securities are the advisors.

 

 UK companies posting interim results this week – Ashmore, Rio Tinto, Tuesday – Provident Financial, HIS Markit, Cairn Energy, Greggs, Wednesday – JD Wetherspoon, Burberry, Ladbrokes Coral, Premier Foods, Game Digital, Experian, Thursday – Royal Mail Group, Workspace, NCC Group, Pets at Home, British Land, Moneysupermarket, Acacia Mining, Chemring, Fusionex, Halfords, Friday – Character Group, Bonmarche, Close Brothers

 

US companies posting interim results – Tuesday – Morgan Stanley, UnitedHealth, Wednesday – Goldman Sachs, Citibank, US Bancorp, Charles Schwab, Netflix, Thursday – Bank of New York Mellon, HB Fuller, American Express, Friday – Citizens Financial, Schlumberger

 

Economic data posted this week – Monday – Rightmove House Price Index, Tuesday – US NAHB Housing Index, Germany’s ZEW, Wednesday – US Beige Book, Thursday – US Phili-Fed, ECB Press Conference, Friday – EU Retail Sales & Consumer Confidence

 

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

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