TODAY’S FAYRE – Monday 17thApril 2017



Take this kiss upon the brow!

And, in parting from you now,

Thus much let me avow —

You are not wrong, who deem

That my days have been a dream;

Yet if hope has flown away

In a night, or in a day,

In a vision, or in none,

Is it therefore the less gone?

All that we see or seem

Is but a dream within a dream.


I stand amid the roar

Of a surf-tormented shore,

And I hold within my hand

Grains of the golden sand —

How few! yet how they creep

Through my fingers to the deep,

While I weep — while I weep!

O God! Can I not grasp

Them with a tighter clasp?

O God! can I not save

One from the pitiless wave?

Is all that we see or seem

But a dream within a dream?”


Edgar Allan Poe – poet – 1809 – 1849


It was with a degree of some trepidation that we took in Jim Broadbent’s latest film ‘The Sense of an Ending’ at the weekend, based on the book by the virulently anti-Brexit Julian Barnes. The critics had been underwhelmed, many only scoring it with two stars on the grounds that it was a frustrating story that perhaps lacked emotion with the story line occasionally dragging. Jim Broadbent is a sensational actor, but in his role as a divorced pensioner with some dark passages in his life, I thought occasionally he lacked contrition and warmth. But towards the end the story-line came alive.


There were some delightful cameo roles, played by Harriet Walters, Michelle Dockery and best of all by Charlotte Rampling, who said very little but her sullen and haunting facial expressions were worth the price of admission. I enjoyed this film enormously and felt the critics were unnecessarily hard on this very satisfactory movie.


So the parade in Pyongyang – attempting to convey the impression of a massive show of military strength – came and went. Then came the missile launch – plop! It failed but the threat and stench of fear remains. The keys to a cessation of military and nuclear proliferation lie in the hands of China and the mood of President Trump and more to the point his advisors such as Rex Tillerson, ‘Mad-Dog’ Jim Mattis and General David Petraeus, who are switched on sensible people.  The temperature, however seems a little lower than it was on Good Friday.


North Korea is an economic desert and if China truly understands the threat of nuclear weapons in the hands of an unreliable despot, President Xi will hopefully attempt to throw a bucket of cold water on this potential crisis before it gets out of hand. There is no economic doubt that Russia and China are keeping North Korea alive.  It is interesting to note that China has stopped importing coal from North Korea in recent days. So perhaps that was a veiled-threat to Kim Jong Un to cool his heels!


We wiled away a couple of hours on Saturday wandering around The Queen’s Gallery looking at self-portraits by the likes of David Hockney to Leonardo Da Vinci to Sir Joshua Reynolds to Sir Edwin Landseer to Sir Peter Paul Rubens to Lucien Freud.  A few shone through in what I thought was quite a thin gathering of masterpieces. On the whole as an exhibition it was disappointing.


It never ceases to amaze me how philosophical and relaxed so many traders and investors are when confronted by geopolitical crises of considerable magnitude and the threat of military turmoil in comparison to a decade ago. Considering what happened in Syria, the atrocities in Cairo and in Stockholm and the unbalanced Kim Jong Un thumping his nuclear tub, I am totally ‘non-plus’ that global indices have taken it all in their stride. Last week the S&P eased by 0.75%, with the FTSE shedding 2.8%, much of it down to a modest drop in the Dollar reflected in softer mining, Pharma, tobacco and bank stocks. European bourses fell by 2.66% with the Nikkei dropping 1.07% thanks to a strong Yen. The FTSE might have fallen further but for the fact that oil prices were up 1.4% on the week. Gold rallied to $1288 an ounce, encouraged by punters losing some appetite for risk.


On Easter Bank Holiday Monday many markets are shut, but Asian markets are down an average of about 0.5% as I write, despite decent growth figures out of China. GDP came in at 6.9% for the 1st quarter.  Government estimate for 2017 was 6.5%.  Last year China grew by 6.7% – the lowest growth rate for 26 years. The main issue concerning the Chinese economy is debt – both public and private.  Many believe the banks are very much under the cosh with underperforming loan portfolios. The OECD expressed concern that debt ratio to GDP in China came in at an alarming 250%. There is every chance that growth has been exaggerated, but it would appear that the heat is now out of the kitchen for the time being.


There was some interesting pieces of corporate news heading towards Easter last week, but everything was overshadowed by the atrocities in Syria and the sabre-rattling over North Korea.  Tesco posted an improved figures for last year, with sales overall up by 4.3% to £49 billion.  However one-off-disbursements like a £235 million fine for over-stating profits and an over-zealous outlook for 2017 bearing in mind inflation and hostile competition from Lidl and Aldi, saw investors take the shares south by over 5%.  At last major fund managers are finally taking their responsibilities seriously by bringing their influence to bear over excessive executive pay.  Many were highly amused that Credit Suisse senior managers volunteered a 40% bonus cut for the last year. I would not be too worried about Lloyds Banking Group moving a few people to Germany post BREXIT decision. Lloyds is a domestic bank and has virtually no European presence! It looks as though the World Bank may knock back Greece on new loan proposals. I was highly amused to see that BSG mining is going to sue George Soros for $10 billion for alleged accusations of defamation and fraud.


Friday was an extremely important day for the start of the US earnings season. Three major banks posted numbers – Citibank, JP Morgan Chase and Wells Fargo.  JPM and Citibank both saw profits up by 17% for the first quarter.  JPM also saw record investment bank earnings. The shares in these banks were up over 20% since the election on 8th November through hope and expectations that the Trump administrations would cut regulation (Dodd/Frank and even reintroduce Glass-Steagall), spending public money like water and cut taxes.  Congress is proving tricky for Trump over getting some of this legislation through.  Shares in Wells Fargo and Citibank are now only up 17%, though JPM remains up 22%. Banking results on the whole beat expectations in comparison to profits estimates for S&P constituent stocks, which are expected to increase by 11% on average.  No wonder Donald Trump is wanting a lower Dollar.  He needs it for exports, whilst his legislation programme flounders.


The start of next week will be nervous but interesting. I don’t see a major ‘sell-off’ as conditions feel a little less electric! However there may be small but temporary set-back.



UK companies posting results this week – Tuesday – Ashmore Wednesday – AB Foods, Segro, Burberry, Henderson, Bunzl, Fenner, RELX, Greggs, Rentokil Initial, Rio Tinto, Thursday – Hvivo, Debenhams, Unilever, Acacia Mining, Sky, Senior, Go-Ahead, Moneysupermarket, Evraz, Man Group, Essentra, Friday – Reckitt Benckiser

US companies posting results this week – Monday – Brown & Brown, Netflix, Tuesday – Bank of America Merrill, Abbotts Labs, Goldman Sachs, Charles Schwab, Harley-Davidson, Yahoo!, Wednesday – Blackrock,  American Express, Abbotts Labs, eBay, Thursday – Philip Morris, PPG, Bank of New York, Mellon, DR Horton, Travelers, Visa, Mattel, Friday – GE

Economic data out this week –  Monday – US Empire state manufacturing Index, Tuesday – NAHB Housing data, Germany’s ZEW, Wednesday – Beige Book, Thursday – Phili-Fed Manufacturing Index, Friday – UK Retail Sales


 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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