TODAY’S FAYRE – Thursday, 26th January 2017


“What passing-bells for these who die as cattle?

— Only the monstrous anger of the guns.

Only the stuttering rifles’ rapid rattle

Can patter out their hasty orisons.

No mockeries now for them; no prayers nor bells;

Nor any voice of mourning save the choirs,—

The shrill, demented choirs of wailing shells;

And bugles calling for them from sad shires.


What candles may be held to speed them all?

Not in the hands of boys, but in their eyes

Shall shine the holy glimmers of goodbyes.

The pallor of girls’ brows shall be their pall;

Their flowers the tenderness of patient minds,

And each slow dusk a drawing-down of blinds.”


 Wilfred Owen – soldier & poet – 1893-1918


 With about four hours it was interesting to note that 82,000 had endorsed President Trump’s tweet on his perceived successful meeting with senior executives from the US automobile industry. Will this trend continue? Will tweeters head in their droves to twitter to be updates on the President’s policies? President Donald Trump is due to sign off on a tsunami styled waves of executive orders on national security, including measures to start the construction of a wall on the Mexican border and the imposition of a ban on refugees from the Middle East. The new US president is expected to sign orders setting out federal funding for the wall during a visit to the Department of Homeland Security on Wednesday, two administration officials told the Associated Press. I cannot believe for a minute that he will get that controversial policy initiative through Congress.  President Trump has as many enemies as well as supporters in the GOP. However I am reliably informed that potentially dissenting GOP Congressmen have had their lapels tugged!

Downing Street today confirmed plans to publish Article 50 bill today.


A word on the Oscar nominations for 89th Academy Awards at the Kodak Center in Los Angeles on 26th February 2017 – We all know ‘La La Land’ will clean up grabbing a high percentage of its 14 nominations. I don’t think Ryan Gosling deserves best actor, despite learning to be a top notch jazz pianist.  I think Casey Afflek should receive that coveted gold statuette for his performance in ‘Manchester by the Sea’ – outstanding!  I sincerely hope that Naomi Harris receives best supporting actress award for her performance in ‘Moonlight.’


The idea of a US isolationist approach to business and trade could significant appeal to investors may seem unlikely. Notwithstanding that thought, the DOW, yesterday, blazed through the 20k threshold for the first time. It was only a few days ago that the S&P reached its record level with the NASDAQ breaching through the 5K threshold. It is interesting to note that not once in his 8 year presidency did Obama post a 3% quarterly growth for the US. He is the only President not to do so in living memory. Part of the reason will be down to the financial crisis in 2008/9.  So a combination of tax cuts, infrastructure spending and the slashing of regulation is an intoxicating cocktail for investors to enthuse over! I just hope President Trump does not go ‘all-out’ for a trade war with China. If he does, all the positive reaction to his initial initiatives will dissipate.

Anyway the market believes those new measures are good for business – hence the appetite for risk. Just look at the list of those stocks that benefitted yesterday – Boeing +6.9% (aided by good interim results), Caterpillar +1.9%, Apple +1.9%, Goldman Sachs +3.5%, IBM +2.9% and Johnson & Jonson +1%.


I know I should show some humility but 4th quarter UK GDP was better than expected – +0.6%. The economy is still too unbalanced with the service sector absolutely rampant – + 0.8%, with construction rising by 0.1%. PMI’S around the world are stronger – so let’s hope manufacturing output gets a leg up in the months to come. Inflation will rise and disposable income may not rise fast enough; hence retail may look a little vulnerable by the autumn. The robustness of consumer spending has been very important in the last year, as has the car assembly, which is at a 17 year high! The prophets of doom will tell you that cumuli nimbus clouds hang in a threatening manner over BREXIT. So what? There is 2 years to go – so as the expression goes a la Michael Winner – ‘Calm down, dear!”


RBS has deemed in prudent to make provision for a further £3.1bn ($3.8bn) provision in relation to various investigations and litigation matters relating to RBS’s issuance and underwriting of US residential mortgage-backed securities. This takes the total aggregate of such provisions to £6.7bn ($8.3bn) as at 31 December 2016. This further provision would have reduced RBS’s Tangible Net Asset Value, leaving its Tier One capital ratio at a sensible level of 13.6%. This is another blow for the taxpayer, but no a shock in terms of what could have been levied by the DOJ in New York.


Asia had a grand session today, hanging on the coattails of US euphoria, with the Yen remaining unchanged – Markets closed as follows – ASX (closed), Nikkei +1.8%, Hang Seng +1.4% and Shanghai Composite +0.3%.


A slew of earnings have been presented this side of the Atlantic today and later in the day it will be the turn of US companies to step up to the plate. Diageo did really well considering the currency vagaries which will have been a minefield for this titanic drinks operator – +4.5%. Unilever’s efforts were very lack-lustre with Paul Polman complaining that markets would be very challenging! How often have we heard that excuse? – Its shares down 4.5%. Acolytes of Whitbread would have been disappointed with the sales forecast of Premier Inns – down 4.1%. Sky’s share price was near enough flat. Today’s decent numbers have little to do with anything. What everyone wants to know is if, where and when 21st Century’s £18.5 billion bid (1075p per share) for the remaining 61% will be accepted.


Since Kate Swann took over the reins at SSP it has really come together as a food conglomerate – shares up 40% in the last year. Today they fell 0.9% – probably profit taking. Other companies reporting include – Sage -5%, Card Factory +3%, Kier +0.8%, DMGT -6.2%,St James’s Place -0.37%, Renishaw -2.3% and Rank unchanged. The FTSE is up 12 points at 7172 at 13.05pm.


 UK companies posting interim results this week – 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 – 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 –  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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