TODAY’S FAYRE – Sunday, 5th February 2017


I imagine this midnight moment’s forest:
Something else is alive
Beside the clock’s loneliness
And this blank page where my fingers move.

Through the window I see no star:
Something more near

Though deeper within darkness
Is entering the loneliness:

Cold, delicately as the dark snow,
A fox’s nose touches twig, leaf;
Two eyes serve a movement, that now
And again now, and now, and now

Sets neat prints into the snow
Between trees, and warily a lame
Shadow lags by stump and in hollow
Of a body that is bold to come

Across clearings, an eye,

A widening deepening greenness,
Brilliantly, concentratedly,
Coming about its own business

Till, with a sudden sharp hot stink of fox

It enters the dark hole of the head.

The window is starless still; the clock ticks,

The page is printed.”


Ted Hughes – poet laureate– 1930-1998


There may be an excess of gratuitous violence in Mel Gibson’s production of ‘Hacksaw Ridge.’ Notwithstanding that fact, it is one hell of a war film. The American born British Actor, Andrew Garfield puts in a breath-taking and brilliant performance as Desmond Doff. If he does not win the ‘Oscar’ as best actor on 26th February 2017, he will only have been ‘short-headed.’ I know everyone has gone weak at the knees over Ryan Gosling in ‘La La Land’, but acting? – Never – But a great piano player, though!


Having seen the ‘good and the great’ from the EU gathering in Valetta, Malta to hear PM May report back on her visit to meet Donald J Trump, their body language tells you that we were never really welcome. Since the days when the UK’S application was dismissed with contempt by Charles de Gaulle, the UK has always given the impression of being a reluctant member, apart from the Blair days, when he seemed consumed and mesmerised by power. Also I am not sure I shall ever forgive Gordon Brown for signing the Treaty of Lisbon in such a reckless manner.


Let’s hope Mrs May’s ability to deal with President Trump, can persuade him not to keep slagging off Germany.  It might just help the UK’S cause when dealing with sensitive trade negotiations.  However there are only two ‘certs’ in life – rent day and death! It also appears from comments made in the media that the EU is happy to communicate with President Trump through Twitter! I hope the comment was frivolous, but such is that arrogance of some politicians.


For the S&P 500 to end last week +0.09%, the FTSE +0.05% and European bourses to have eased by 0.72%, you would be forgiven for thinking that the week’s stock exchange business was of no consequence and that it had been a week of political and economic somnolence! – Au contraire!  It was full of action, sound and fury! I suppose stocks markets are sufficiently resilient to take the ‘whips and scorns of time’ on the chin and just roll with the punches!  In passing the NIKKEI closed down 2.82% – much of the loss due to a very strong Yen. Gold rose a little to $1218 an ounce and Brent crude was up 0.5% to $56.80 a barrel.


It seems remarkable that markets had to continue to deal with a very erratic President Trump (incredibly now more popular in the US than 2 weeks ago), the findings of the FOMC meeting, the results of UK inflation report and MPC and at the end of the week the content of US Non-Farm payroll and employment numbers and in conclusion the closing vibes that emanated from EU members meeting in Malta. It was noteworthy that equities just shrugged off a number of these edicts, prognoses and imponderables.   


To start with the States of Washington and Minnesota managed to obtain a ruling against President Trump’s immigration ban on grounds that it was unconstitutional. Then there was the Iran nuclear test, which necessitated further sanctions demanded by Defence Secretary Mattis.


Then finally on US issues there was the question of deregulation and bureaucracy, which Trump is reputed to want to cut by as much as 70% in places. Financial services is at the top of the tree with Trump hoping to have much of the Dodd/Frank bill repealed allowing the reintroduction of softer regulation on investment banking.  Personally, I think Congress will give the government a really hard time with this amendment. Bank shares rallied to the cause yesterday, taking the DOW back up through the 20k threshold.


Friday’s US Non-Farm payroll number was robust enough superficially. 227k jobs were created in January though the unemployment rate rose a pip to 4.8% and wage inflation was fairly benign.  However it is generally thought that if the US economy remains on track two rate increases in 2017 is on the cards.


Here in Old Blighty it was the quarterly Bank of England Inflation Report and the MPC meeting that captured most imaginations.  There wasn’t much in the way of ‘Mea Culpa’ or contrition from Mark Carney for hopelessly underestimating the robustness of the UK economy post the BREXIT vote. Suffice to say the BOE upgraded the GDP forecast for the economy for the second time from 0.8% for 2017 to 1.8% and then on Thursday to 2%.  Inflation is expected to reach 2.75% by first quarter of 2018.  There was no change in bank rate – lest at 0.25%.  I thought there was a case for taking it back to its pre-23rd June level of 0.5%. The Bank unsurprisingly warned of a possible crackdown on Consumer Credit.


UK interim and final results posted last week were adequate rather than spectacular. Britvic and Ocado pleased their acolytes.  Efforts from Vodafone and Astra Zeneca were tolerable and though Shell’s headline numbers looked a little short, the balance sheet looks in good shape, which should enable the dividend to be maintained for 2017, post the acquisition of BG Group. Reckitt Benckiser expressed an interest to buy Mead Johnson for $16 billion. This baby food titan seems to have been in conversation with other predators which included Johnson & Johnson. Mead Johnson has been very reliant on China for sales and Wal-Mart.  


Much the same could be said of the US, with Facebook posting numbers which included $26 of revenue with a profit of $10 billion from 1.23 billion subscribers. The shares were near enough unchanged on the week and 29% up in the year. Over the week banks were the best performing sector in the US adding 2.3%, with Morgan Stanley and Goldman vying for the yellow jersey adding 5% and 4% respectively. Trump’s immigration plans gave airlines a good slapping either side of the pond, though the sector recovered some poise towards the end of the week. Visa was in good form on decent numbers adding 5% in value. Snapchat’s eagerly awaited $3 billion IPO valuing this aspiring operation at $25 billion has attracted much comment –many feeling it may be grossly overvalued.


What great news to hear that Bank of America Merrill are looking for new premises in London. That might help to alleviate the idea that London will suffer badly from the BREXIT fall out. News on the high street that Top Shop and parts of Arcadia had a poor Christmas may just make the former ‘King of Gowns and Blouses’ have a rethink over his moral responsibilities over the BHS pension black hole, reputedly having increased to £571 million.


UK companies posting interim results this week – Monday – Randgold Resources, Tuesday – BP, First Group, Bellway, GW Pharma, Wednesday – Rio Tinto, Tullow Oil, Dunelm, Redrow, Hargreaves Lansdown, Glaxo Smithkline, Severn Trent, Thursday – Smith & Nephew, Ashmore, Henderson, Thos Cook, Pennon, Grainger, Enterprise Inns, Manchester United, Dairy Crest, Enterprise Inns, DFS, Friday – Electrocomponents, Aon, Greene King


US companies posting interim results – Monday – L-Brands, Tyson Food, Loew’s, GAP, Tuesday – Archer Daniels Midland, Omnicom, Walt Disney, Wednesday – Time Warner, Allergan, Goodyear, Brinks, Thursday – BGC Partners, Kellogg, Twitter, KKR, Viacom, Yum Brands!, Coca-Cola, Zynga


Economic data posted this week – Tuesday – Halifax House Prices, US Trade Balance, Wednesday – US Federal Budget Balance, NIESR UK GDP estimate, Thursday – US initial Jobless Claims, US FOMC, Friday – RICS Housing data, UK Manufacturing, UK industrial Production, UK Goods Trade Balance


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


Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

%d bloggers like this: