TODAY’S FAYRE

TODAY’S FAYRE – Thursday 20thApril 2017

 

“There it was I saw what I shall never forget
And never retrieve.
Monstrous and beautiful to human eyes, hard to
believe,
He lay, yet there he lay,
Asleep on the moss, his head on his polished cleft
small ebony hoves,
The child of the doe, the dappled child of the deer.

Surely his mother had never said, “Lie here
Till I return,” so spotty and plain to see
On the green moss lay he.
His eyes had opened; he considered me.

I would have given more than I care to say
To thrifty ears, might I have had him for my friend
One moment only of that forest day:

Might I have had the acceptance, not the love
Of those clear eyes;
Might I have been for him in the bough above
Or the root beneath his forest bed,
A part of the forest, seen without surprise.

Was it alarm, or was it the wind of my fear lest he
depart
That jerked him to his jointy knees,
And sent him crashing off, leaping and stumbling
On his new legs, between the stems of the white
trees?
 

 

Edna St Vincent Millay – poet – 1892 – 1950

 

 

After Tuesday’s surprise election announcement, it was only a matter of minutes before the bottles of vitriol and acrimony started to leak profusely. I have to admire PM May – perfect casting for the job in the current circumstances – irritated by small talk, cold, calculating, focused, resolute and appearing to be immune to serious criticism. She seems very determined to do a very decent job for the people of this country and will not be deterred by the endless barrage of Corbyn platitudes on redistribution of wealth, which is laudable but disastrous as the cost of his plans will bring the UK economy to its knees. Also it’s high time the saboteurs of BREXIT – Blair, Mandelson, Clegg, Farron, Campbell and Miller were put to the sword.  If they don’t like BREXIT and they have every right not to then galvanise the voters to remove Mrs May and the Conservatives from government on 8th June 2017.  Otherwise pipe-down, challenge by all means but respect democracy!

 

This election campaign is dangerously long. Therefore I believe Mrs May is spot on, in thinking that anything positive for her campaign could ever come out of TV debates. These debates tend to be of far more benefit to the underdog. David Cameron gained nothing from them at the last election.  The choice seems clear to her – LEADERSHIP – back me or sack me! Why skid on a few banana skins, when it isn’t necessary?

 

 

Many investors were trying to put geopolitical problems behind them yesterday, but the influence from the UK election call and the cloudy uncertainty that continues to permeate from the French Presidential scene has been too powerful. So the fact that in the US inadequate interim results were posted by Johnnie & Johnnie and Goldman on Tuesday took the wind out of market acolytes’ sails, thus failing to compensate for the other factors. American Express posted adequate numbers which saw its stock price rise by 2.23% after hours and by 15% in the last year. eBay’s efforts were rather good. Though this tech/retail giant certainly beat the Street’s estimates, the second quarter outlook was disappointing.  There is no doubt that this stock has travelled and arrived – down 1.9% yesterday but is has performed in a ‘gangbuster’ fashion in the last year – up 32%.  Perhaps not quite as good as Amazon but wow! – Amazon up 42% in the last year! There is concern about OPEC’S story line.  Their plans on production seem to be falling apart as oil prices have fallen 3.8% in recent days. Exxon Mobil’s share price has hit a 14 month low. That will concern Rex Tillerson or maybe he has sold all his stock options? Gold has also pulled back from $1290 to $1280 an ounce as the markets calms down over North Korea.

 

Yesterday the FTSE opened up just below the Plimsoll line cut its losses but eventually closed the session down 33 points at 7114. As Sterling strengthened, some Dollar related stocks suffered such as Diageo and a few of the miners.  Investors vented the spleens against Burberry down 7.94%.  Sales in the UK were good, BUT obviously suffered in the US and Asia due to the Pound’s weakness. Some domestic diehards without serious BREXIT connotations, rallied to the cause – Sainsbury +5%, EasyJet +4.9% and NEXT +3.2%, though rising inflation must be a concern. Conversely the FTSE 250, the real barometer to the UK economy added 0.62% – nearing a record.

 

At the IMF meeting in Washington, concern was expressed that banking debts, which are heading towards E1 trillion in size, incurred by the likes of Deutsche, Credit Suisse and RBS, was damaging recovery. That is like saying is the Pope a catholic, but point taken.  Having upgraded the UK economy a couple of days ago, the IMF apparently started muttering (unconfirmed) about BREXIT and how the UK did not understand the dangers to its financial markets.  I think we here in the UK have the matter in hand. There was also criticism of the possible dangers from relaxation on regulation in the US. Elliott Advisors amongst other shareholders in Akzo Nobel have rejected £1.3 billion sweetener for shareholders to prevent a takeover by Pittsburgh Glass. A hostile bid is expected for the Dutch mogul which bought ICI and Courtaulds in years gone by. Asian markets made a tepid effort to come to hand with sparse guidance from New York – ASX +0.21%, Shanghai -0.29%, HS +0.30%, Nikkei +0.23%.

 

When you are under the cosh from predators such as Kraft Heinz, it is amazing the size of the rabbit that can be pulled out of the hat.  Paul Polson of Unilever posted excellent results today for the last quarter with a 6.1% increase in sales to E13.3 billion. Dividend is up 12%. Sales growth for the year is expected to be maintained between 3.5-5%.  Emerging markets have done well.  The sale of Flora and Stork is under way. Shares have risen 18.8% in the last year much of that down to the Kraft bid of $115 billion on 27th February. Sky posted revenue of £9.46 billion for the last 9 months.  Revenue in UK only rose 4% but in Germany and Italy it was up 28% and 25% respectively.  100k new customers were added.  Though the churn rate last quarter was alarmingly high at 11.6% Sir Jeremy Darroch the CEO says it has evened out.  We await news on the 21st Century takeover.  Now that Bill O’Reilly the FOX presenter has been hosed maybe Karen Bradley will see her way clear by nodding it through. Debenhams like many retailers is having to cut costs as and may be closing as many as 10 stores and a similar number of warehouses with no doubt jobs to go too!  There are slew of earnings out there.  If I rattle them off I will bore people more than I do already!

 

UK companies posting results this week – Thursday – Hvivo, Debenhams, Unilever, Acacia Mining, Sky, Senior, Go-Ahead, Moneysupermarket, Evraz, Man Group, Essentra, Friday – Reckitt Benckiser

US companies posting results this week – Thursday – Philip Morris, PPG, Bank of New York, Mellon, DR Horton, Travelers, Visa, Mattel, Friday – GE

Economic data out this week – 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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