TODAY’S FAYRE – Tuesday 2nd May 2017
“Where sunless rivers weep
Their waves into the deep,
She sleeps a charmed sleep:
Awake her not. Led by a single star,
She came from very far
To seek where shadows are
Her pleasant lot.
She left the rosy morn,
She left the fields of corn,
For twilight cold and lorn
And water springs.
Through sleep, as through a veil,
She sees the sky look pale,
And hears the nightingale
That sadly sings.
Rest, rest, a perfect rest
Shed over brow and breast;
Her face is toward the west,
The purple land.
She cannot see the grain
Ripening on hill and plain;
She cannot feel the rain
Upon her hand.
Rest, rest, for evermore
Upon a mossy shore;
Rest, rest at the heart’s core
Till time shall cease:
Sleep that no pain shall wake;
Night that no morn shall break
Till joy shall overtake
Her perfect peace.”
Christina Rossetti – poet – 1830-1894
The idea that Tony Blair could return as a ‘matinee idol’ to the top political stage, as ‘the return of the prodigal son, is not realistic or plausible in the wake of the toxic sentiment he left behind over the Iraq war. However in conjunction with heavyweights like Ken Clarke, the Lords Heseltine and Mandelson, he has every right to stand tall in his contempt of BREXIT. His passion on the subject, if you are that way inclined, is worth hearing – but not for me! I suspect that in the next year or so he will be very vociferous on this sensitive issue.
Whether the reports on the dinner hosted by PM May for J-C Juncker and Michel Barnier were accurate or whether the level of the European Commission’s President’s contempt was exaggerated, for sure any evidence of ‘entente-cordial’ was not that obvious. This is a big week for the EU. A small win for M Macron would be perceived as damaging. France seems horribly split on whether it should remain in the EU! The UK Government must keep its cool against the onslaught from the heavy artillery in Brussels, Strasbourg, Berlin, Paris, Warsaw, Rome, Lisbon, Madrid and pretty much anywhere else in Europe you can think of! Nil desperandum!
London and the rest of Europe enjoyed a May-Day Bank holiday yesterday, but New York did not indulge in such trifling matters. They were there, though activity was limited as Europe was looking for ‘rays’ not of a political or financial nature! The S&P 500 technology index, the best performing major group this year, gained 0.9%, with big tech names including Microsoft, Alphabet and Facebook reaching fresh records. Netflix Inc. shares also hit a new all-time high of $157.70, and closed up 2.1%. It was the same with shares of Amazon.com Inc. which closed up 2.5% at a record $948.43, after hitting an all-time high of $954.40 in the session. Jeff Bezos, the CEO is a whisker short of eclipsing the Mexican Bill Gates as the richest man in the world. President Trump is threatening to break up the big banks. I suspect that is ‘just ‘huffing & puffing’ in regards to deregulation. The US Secretary of the Treasury Steve Mnuchin said that economic growth of 3% is achievable in the next two years as the Trump administration sets out to dramatically cut taxes. Consumer spending was unchanged in March, while personal income climbed 0.2%. US markets closed as follows accompanied by YTD performance – DOW: 20,913 +0.13% +5.823%, S&P: 2,388 +0.19% +6.693% NASDAQ: 5,629 +0.83% +15.75% (Another record close). The FOMC is likely to leave rates unchanged this week. The FED would have been looking for slightly more robust data to have recommended a hike. Non-Farm payrolls will be posted on Friday. We expect 180k jobs to have been created with unemployment to remain at 4.5%.
Asian markets were mixed though there was life in Tokyo thanks to a weaker Yen (+0.69%). Shanghai and the Hang Seng were light by a quarter per-cent thanks in the main to sluggish economic data. In London BP posted much improved results with profits almost trebled on this time last year to $1.449 billion from $497 million courtesy of the price of oil rising from an average of $34 last year to $52 a barrel this first quarter and the end of the Deep Water Horizon $40 billion nightmare – just $4.4 billion this quarter. The dividend was maintained.
Marks & Spencer and Ocado are rumoured to be agreeing a surprise tie-up that could result in the high street stalwart finally launching an online grocery delivery service after years of resistance to the industry-wide trend. At last I think M&S CEO Steve Rowe is starting to realise that M&S influence in fashion on the high street is diminishing by the day. Ocado’s shares have jumped like the proverbial grilse by 8.9%.
Lord Lupton, former founder of Greenhill and deputy Chairman of Barings International has been appointed chairman of Lloyds Banking Group’s non-ring-fenced operations. His knowledge of investment and international banking could be invaluable.
Finally I was not surprised to see the EU flexing its muscles over the €850 billion daily clearing turnover through LCH and the LSE, with a view to re-routing it to the hinterland of Europe. This is not the first time the EU has started its jingoistic warnings and won’t be the last. I must remind it, that though it can impose legislation post 2019, it might be illegal for them to do so before. Apart from EU business much of London’s clearing business has nothing to do with the EU. It is felt that as many as 80k jobs could be affected. In the City we are all getting very tired of EU politicians and bureaucrats metaphorically constantly using their hob-nailed boots to bully, rather than sitting down and talking. The beneficiary won’t be the EU; it will be New York – such folly to behave in such a puerile manner!
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.
Market Commentator – Panmure Gordon & Co
Mobile – 0044 7788 144 877
Panmure Gordon & Co
One New Change | London | EC4M 9AF