TODAY’S FAYRE

TODAY’S FAYRE – Thursday 4th 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 ‘Remain’ press, the visual media and opposition political parties were almost universal in their condemnation of Theresa May’s very sharp rebuke to those politicians and bureaucrats in Brussels and elsewhere in the EU who had briefed against the PM post that eventful dinner at No:10 on the sensitive exit negotiations, that had yet to start. I think she was spot on. On no occasion did Messrs Juncker or his side-kick Selmayr attempt to deny the allegations or damn up the leaks. So the record needed setting straight, even if there was some election political capital to be made out of her interjection.

These negotiations were always going to be tricky and tough at best; so spoiling and subversive tactics were bound to be counter-productive, whichever party adopts them. I fail to understand why the visual media never bothered to challenge Brussels’s ludicrous divorce settlement of €100 billion. They just took that figure as fact! To my certain knowledge the EU has NEVER posted an audited set of accounts in the past 20 years; so why should anyone take any settlement figure as Gospel. Nor for that matter has HMRC or DWP posted audited accounts for many years.

 

Of course the EU wants to discourage other members from leaving; so its strategy of prevent defection by bandying around fictitious inflated numbers is understandable. However its high time respect returned to the diplomatic and negotiating table. Otherwise there will be no deal for many years and that would be disastrous for all concerned. In two words – GROW UP!

 

Yesterday the FTSE fell by 15 points to 7234. J Sainsbury grabbed most of the headlines with a poor sales performance, despite a major contribution from Argos – shares down 5.7%. Also after 7 successful years Adam Crozier is leaving as CEO of ITV. When he and Archie Norman assumed the helm at this ailing broadcaster, the share price was 56 pence – 207p yesterday. The business model is unrecognisable. ITV no longer relies entirely on advertising for its revenue. It makes quality programmes for its self and others through its production company. The shares dipped 1.75% yesterday. Whether Crozier is going as he feels he’s done all he can remains conjecture. Others think he feels uncomfortable as John Malone of Liberty Media breathes down his neck as an unwanted predator. I think he is smart to leave whatever the reason. It is very easy to become stale. Ask Sir John Rose of Rolls Royce!!? It was also great to see CEO Stephen Kelly post encouraging numbers for Sage Group

 

On the Street of Dreams it was all about attempting to digest the rather hawkish approach of the FED. Though there was no change in the FED rate it seems very unlikely that another hike of 25 basis points in June can be avoided despite the perceived slow-down in growth. Kraft Heinz did not please its acolytes in terms of sales but profits were decent – shares up +0.16%. As for Facebook the numbers were block buster, though the shares travelled and arrived – down 2.5% after hours to £148.01, but their value has increased by 29% this year. Sales were up 50% to $8 billion for the last quarter with net income coming in at $3.1 billion. The staggering piece of data is the 17% increase in users to 1.94 billion. Mobile advertising revenue was up 85%. EPS came in a$1.04 (up 73 cents from last year). Facebook will be employing another 3,000 people to check the quality of input. New York based markets closed as follows plus YTD achievements –DOW: 20,957 +0.04% +6.048%, S&P:2,388   -0.13% +6.669%  NASDAQ: 5,625 -0.34% +15.658%. Asian markets had little to cheer about with Tokyo closed – NIKKEI: 19,445 CLOSED +1.733% HANG SENG: 24,571- 0.50% +11.706% CHINA: 3,419 +0.20% +3. 306% ASX: 5,893 -0.30% +3.646%.

 

There were a slew of earnings in London this AM starting with HSBC. Pre-tax profits fell by 19% to $5.01 billion – better than expected for the last quarter. Mark Tucker – ex Prudential and AIA – will replace Douglas Flint as chairman and CEO Stuart Gulliver will be leaving in 2018. Tier One capital came in at a very healthy level of 14.3%. The bank completed a $1 billion share buy-back. Insurance sales were up 17% and assets under management by 13%. The market bought the story and shares were up 3.1% and over 50% in the last year! Royal Dutch Shell proved what a good acquisition BG Group was and thanks to an increase in crude oil prices profits increased from $1.5 billion this time last year to $3.5 billion this past quarter. A tasty dividend of $3.9 billion will be paid. Share buy backs are now on the cards in 2018. Shares were up 2.3% on the day and 19% in the last year. Wm Morrison’s trading statement – like for like sales up 3.4% – proved what an average effort by Sainsbury yesterday. Next’s trading statement was rather dire with retail sales down 8.1% and the Directory sales up 3.3% – net down 3% for the last quarter. NEXT shares are down 5.2%. 18 months ago these shares stood at 7700p!

 

UK companies posting numbers this week – Thursday – Royal Dutch Shell, HSBC, G4S, RSA, Wm Morrison, NEXT, Imagination, Friday – IAG, Millennium & Copthorne, Smurfit Kappa, McCarthy & Stone

 

 US companies posting numbers –Thursday – Hyatt Hotels, Viacom, Kellogg, CBS, Zynga, Shake Shack, Motorola, Friday – Revlon, Cigna

 

Economic data this week – 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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