TODAY’S FAYRE – Monday 1st May 2017


“Winter is cold-hearted 
Spring is yea and nay,
Autumn is a weather-cock
Blown every way:
Summer days for me
When every leaf is on its tree;

When Robin’s not a beggar, 
And Jenny Wren’s a bride,
And larks hang singing, singing, singing,
Over the wheat-fields wide,
And anchored lilies ride,
And the pendulum spider
Swings from side to side,

And blue-black beetles transact business, 
And gnats fly in a host,
And furry caterpillars hasten
That no time be lost,
And moths grow fat and thrive,
And ladybirds arrive.

Before green apples blush, 
Before green nuts embrown,
Why, one day in the country
Is worth a month in town;
Is worth a day and a year
Of the dusty, musty, lag-last fashion
That days drone elsewhere.


Christina Rossetti – poet – 1830-1894


My colleague Simon French made a very poignant comment to me on Thursday about the deteriorating behaviour in the House of Commons and on the ‘hustings’, with particular reference to the treatment of Jeremy Corbyn. Few would argue that his credentials are far from being perfect to hand him the keys of Number: 10 on the morning of 9th of June.  However as Simon put it, he is due some courtesy over some very regulation questions and challenges on policy. The opposition might not agree with his policies on nurses, NHS, taxation, education, defence and foreign policy. I don’t on most of them.  However Mr Corbyn is entitled to raise these issues and have them debated.  He should be treated with courtesy and respect and not as a congenital throwback not worthy of anything more than contempt.  This ‘Yah-boo-sucks’ derision culture has gone too far.  If political parties and foes, opposed to his ideas think he is misguided, then tell him and debate with him and his colleagues in a measured and respectful manner.


Talk by Juncker of Galaxies and bad food at No: 10, by Merkel of delusions and of a lack of realism by Barnier is insolent jingoistic nonsense, totally lacking in courtesy and diplomatic prowess.  Who the hell does the EU think it is to dictate inflexible terms for negotiation?  The UK had a democratic referendum that voted to leave the EU.  The UK served the required notice of two years. The EU must accept that the UK will and cannot be dictated to on unrealistic terms.


All reasonable people accept that the EU is on the back foot with a compendium of danger in France, Germany, Italy and Greece all posing electoral difficulties – hence a tough aggressive stance. Both sides want to agree that nationals should be allowed to stay in the country of their choice – 3 million in UK and one million UK passport holders in the EU. Of course there has to be a divorce settlement.  However it would be diplomatic madness and political suicide for the UK to agree those two issues and leave itself dangerously exposed over no resolution in trade talks.  The UK government would be on a hiding to nothing.  It really would be better to have no deal than such an insane exposure which could deliver the UK into penury.  The EU needs to think again or both sides will be forced to head-off into a severe economic downturn, cutting off their noses to spite their faces.  Otherwise EEA and WTO beckons? Call me old fashion but it’s the arrogance and/or naivety of the EU that bemuses me.


What a splendid fellow Anthony Joshua is. Not only is he a magnificent boxer, who entertained fight fans on Saturday night, but he is also a real credit to his sport. He is absolutely delightful and like millions of others I took great pleasure in hearing what he had to say about his life. He came across as humility personified. Perhaps some highly paid athletes who kick a bit of synthetic leather about for a few million quid a year should sit up, read, mark, learn and inwardly digest! Just in passing the pre-fight-commentary on the night was about as awful as anything I have ever been audibly subjected to!


Markets had a huge amount of news to digest and contend with starting with the first 100 days of Donald Trump’s unorthodox presidency, frothed up in recent days by yet another failed but provocative North Korean missile launch. Then of course the stand-off between the EU and the UK over divorce settlement and trade talks. This issue will have considerable ramifications in the ensuing two years. Then it appears that the UK’s economy is coming off the boil.  The ONS posted only a 0.3% increase in GDP for the first quarter against a 0.7% for the last quarter of 2016.  Inflation is on the march and could reach 2.7% by August.  Imports are more expensive and wage inflation is stagnant resulting in people having less disposable income.  This not good for growth as a result of stifled consumer expenditure.  However by the end of the year, conditions may have improved a little as the Pound starts to look a little stronger with the political climate in Europe possibly starting to look rather more volatile than the EU would like. Last week, despite these imponderables the S&P 500 closed up 1.58%, the FTSE by 1.26% and European bourses by an average of 2.36% (risk-off dissipating, resulting in European bourses attracting funds which normally would be heading for the US). The Nikkei enjoyed a 3.09% rally courtesy of a softer Yen.


This coming week there is a slew of earnings to ruminate over on both sides of the Pond.  BP’s profits, posted on Tuesday, are expected to have doubled from $1.26 billion from $532 in 2016 and Royal Dutch Shell, due on Wednesday, from $1.55bn to $3.05bn – The price of oil in the 1st quarter of 2016 was $34 a barrel having dipped at one point to $28 a barrel. In the first quarter of 2017 oil averaged $54 a barrel. Chevron and Exxon Mobil posted strong results last week. Shell is starting to feel the real benefit of the £47 billion acquisition of BG Group and BP starting to flourish from its recovery from the $40 billion plus cost of Deepwater Horizon. J Sainsbury’s efforts may not be anything to write home about – with sales possibly flat to down 1.5% despite the contribution made by the £1.4 billion purchase of Argos. In fairness some analysts disagree and think the news will be better. We may hear more about a joint venture between M&S and Ocado. M&S certainly need some good news as their fashions remain so dowdy. The Coop Bank will hopefully find some more money from their existing hedge fund managers to meet the BOE’s capital requirements to carry on trading. This bank is unlikely to be sold in the current climate at an attractive price. Barclays’ results last week were good, but investors concerned themselves with Jes Staley’s future as CEO and unfairly took the share price by 5%. In fairness corporate and investment banking continued to make a disproportionate amount of the profit – £1.3 billion out of £1.6 billion. On Friday RBS returned to profit but this operation is nowhere near out of the woods. Again news of Chancellor Hammond’s plans to take this bank out of the taxpayers’ control will be eagerly awaited after the election, were the Tories to win. Rumour has it that Saudi Arabia’s IPO of 5% of Aramco (valued at circa £65 billion) could be shared by the LSE and HK rather than New York.


UK companies posting numbers this week – Tuesday – Aberdeen Asset Management, Oxford Instruments, BP, Shire Pharmaceuticals, Wednesday – J Sainsbury, Sage, Focusrite, Imperial Brands, Paddy Power Betfair, JD WETHERSPOON, Intu Properties, Direct Line, Carillion, eSure, Centamin, OneSavings Bank, Thursday – Royal Dutch Shell, HSBC, Friday – IAG, Millennium & Copthorne, Smurfit Kappa, McCarthy & Stone



US companies posting numbers – Tuesday – Aetna, Altria, Coach, Pfizer, Mastercard, Pitney-Bowes, Ford (sales), Conoco-Phillips, Denny’s, Apple, FMC, Wednesday – Humana, Sprint, Groupon, Yum Brands!, Time Warner, Kraft Heinz, Metlife, Facebook, Tesla, Thursday – Hyatt Hotels, Viacom, Kellogg, CBS, Zynga, Shake Shack, Motorola, Friday – Revlon, Cigna


Economic data this week – Tuesday – UK PMI Construction, Wednesday – UK PMI Service Sector, US ISM Non-Manufacturing, FOMC statement – Thursday – BOE Mortgage approvals & lending, US Factory orders, US Initial Jobless Claims, Friday – US Non-Farm Payrolls, Employment data.


 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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