TODAY’S FAYRE – Sunday, 22nd January 2017


They flee from me, that sometime did me seek

With naked foot, stalking in my chamber.

I have seen them gentle, tame, and meek,

That now are wild, and do not remember

That sometime they put themselves in danger

To take bread at my hand; and now they range

Busily seeking with a continual change.


Thanked be fortune it hath been otherwise

Twenty times better; but once, in special,

In thin array, after a pleasant guise,

When her loose gown from her shoulders did fall,

And she me caught in her arms long and small;

Therewith all sweetly did me kiss,

And softly said, ‘Dear heart, how like you this?’


It was no dream: I lay broad waking:

But all is turned, thorough my gentleness,

Into a strange fashion of forsaking;

And I have leave to go of her goodness,

And she also to use newfangleness.

But since that I so kindly am served,

I would fain know what she hath deserved.”



Sir Thomas Wyatt – poet – 1503-1542


 “Some people get rich studying artificial intelligence. Me, I make money studying natural stupidity!”  – Carl Icahn – business man, entrepreneur and philanthropist – 1936-


‘La La Land’ was an enchanting movie and Ryan Gosling and Emma Stone were beautifully cast.  The music and the cinematography were very special and it produced a really positive ‘feel-good-factor!’  But in no way was it an all-time great movie warranting garlands of ‘Oscars.’ I am sure the glitterati will see it rather differently from me. 8/10 marking!


The WEF delegates preening themselves like peacocks in Davos, a closeted meeting of the aloof, is a classic illustration why populism has grasped the nettle and has taken up arms against the establishment.  The establishment, big business and politicians only have themselves to blame for BREXIT, the election of Donald Trump and the possibility of a not to be dismissed lightly Le Pen victory in France in April. The intransigence of the EU over reform and its deafening silence towards the cries from the wilderness for change are breath-taking in its arrogance!  


The ‘great & the good’ have distanced themselves from everyday life and are totally out of touch with reality.  Their moaning and carping at these dramatic changes in the political landscape is totally consistent. The UK taking its leave of the EU in 2019 may only be the first of others to follow. So if the EU and the average delegate in Davos does not only wake up and smell the coffee and be prepared to reform their thinking and the EU its legislation, the day of reckoning will surely come. What I still abhor is the lack of humility of the victors and the refusal of the 48% to accept the democratic decision.  Both camps are wrong and should come together to make BREXIT work!


The rest of the world, away from the EU, is warming to the prospect of negotiating free trade deals, not only with the UK but also elsewhere. It will simplify matters globally.  As a percentage of UK trade they are modest, but very important in setting down the UK’S stall for the future.


As for the future of the City of London, regardless of the comments made by Gulliver, Weber and Blankfein and the City of London Corp’s negative Mark Boleat, who admittedly has a job to do, I believe looks very positive. 70 years of infrastructure will not be surrendered without a hell of a scrap.  It will take both Paris and Frankfurt, a town of 750k people, a decade to compete with London in terms of infrastructure. The tax is all wrong in France and the European banks are about E300 billion short of working capital. Do existing banking operations really wish to bail out of London against a background of fearful uncertainty, not forgetting the monumental cost? Daft I’d call it!”  



Considering markets had to contend with Donald Trump’s inauguration, Theresa May’s two major speeches on Brexit, one at Lancaster House and one to the not so good and the not so great in Davos, they behaved really rather well. The S&P eased by only 0.23%, though the NASDAQ briefly flirted with the 5000 threshold for the first time.  The FTSE 100 saw profit takers and it eased by 1.9% on the week, with European bourses down by just 1%. The Nikkei moved like a barometer as to whether the Yen showed signs of weakness or strength. Energy stocks girded up their loins on the back of stronger Oil prices – Brent $55.49 and gold pushed through the $1200 an ounce barrier – $1203. It will take time for Trump’s administration team to be approved by Congress but assuming their nominations are accepted, the world will be watching to see whether there is a perceived thoroughly negative issue with China over trade, resulting in China dumping Treasuries, which would send yields sharply north inflicting adverse inflationary damage, as well as damaging growth in the US. The US earning season has already produced decent efforts from the banks. GE saw profit takers after a decent run – down 2.1% and conversely IBM pleased its acolytes – up 1.9% and ‘Big Blue’ is up 30% in the last year after a couple of years in the doldrums. Netflix reached its all-time high adding 7 million subscribers – up 38% in the past year.  This week the US earnings floodgates open in earnest (set out below)


UK Retail Sales in December dropped 1.9% from the previous month, according to ONS. Sales across all main retail sectors declined, with the heaviest falls coming at non-food stores. It was the largest monthly fall for more than four and a half years. The Black Friday discounts in late November made it very difficult to keep shoppers spending during December. Experts had predicted a much smaller 0.1% monthly fall. However, when compared with a year ago, retail sales were up 4.3% in December. Shoppers also bought more online, spending about £1bn a week, which was 21.3% higher than in December 2015. The 18% fall against the Dollar and 13% against the Euro since June 2016 contributed significantly to the recent rise in inflation to 1.6% heading towards the official estimate by BOE of 2.7% by the end of 2017. This will of course mean that there is less disposable income, as wage inflation is running at 2.6%.  A drop in retail activity will mean a contraction of GDP.  Talking of GDP China’s estimate for 207 came in at a satisfactory 6.7%

The £671million settlement agreed between Rolls Royce and global regulators for bribery and corruption issues in Brazil and Indonesia may not yet be ‘done and dusted.’ Understandably major fund managers want a fuller explanation from management at the time of the misdemeanour back in 2010 – Explanations are required from Sir John Rose, CEO for 12 years, the chairman at the time Sir Simon Robertson and perhaps some meat on the bone from John Rishden.  That is a huge sum of money and cannot be swept under the carpet without fulsome reasons. The buck sits at the top! So what happened please? There was another desperate profits warning from Pearson last week.  Education sales in the US seem to have gone awry.  The shares fell 23% on Wednesday.  It seems strange that CEO John Fallon is unmoved by the drama and still remains in situ!  As Sky & BT scrap for football rights I note that BT intends to put up its charges. This is a bad idea unless BT Openworld sharpens up by providing a broadband/internet service that is marginally better than third world. The UK so needs for business and educational purposes. One suspects that CEO Gavin Paterson is upping charges to prevent BT Openworld from being split from the group.  The current service which affect many providers is frankly not good enough. Schroders would appear to be pushing for a merger between Bovis Homes and the Berkeley Group post Mr Ritchie’s departure and the subsequent profits warning.


UK companies posting interim results this week – Computacenter, Petra Diamonds, Tuesday – Crest Nicholson, PZ Cussons, IG Group, Genel, EasyJet, Dixon Carphone, Wednesday – Fresnillo, Antofagasta, Restaurant Group, WH Smith McCarthy & Stone, Thursday – Whitbread, DMGT, Diageo, Unilever, Sky, SSP, Card Factory, Rank, Kier Group, PayPoint, Great Portland Estates, Sage, Renishaw, Jimmy Choo, St James’s Place – Friday – BT Group


US companies posting interim results – Monday – McDonald’s, Halliburton, Yahoo!, Tuesday – Travellers, 3Ms. Lockheed Martin, DuPont, Corning, Johnson & Johnson, Alcoa, Texas Instruments, Wednesday – Boeing, Freeport McMoRan, AT&T, eBay, Thursday – Xlinx, Alphabet, Whirlpool, Baker Hughes, Ford, Caterpillar, Pulte, Bristol Myers Squibb, Raytheon, Biogen, Intel, Microsoft, Friday – American Airlines, Abbvie, Colgate-Palmolive, Chevron, Honeywell, General Dynamics.


Economic data posted this week – Tuesday – UK Public Sector Borrowing Requirement, Wednesday – Nationwide House Prices, Thursday – UK index of Services & BBA Mortgage approvals, Friday – US GDP estimate


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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