TODAY’S FAYRE – Wednesday 10th May 2017


“The moment when, after many years
of hard work and a long voyage
you stand in the centre of your room,
house, half-acre, square mile, island, country,
knowing at last how you got there,
and say, I own this,

is the same moment when the trees unloose
their soft arms from around you,
the birds take back their language,
the cliffs fissure and collapse,
the air moves back from you like a wave
and you can’t breathe.

No, they whisper. You own nothing.
You were a visitor, time after time
climbing the hill, planting the flag, proclaiming.
We never belonged to you.
You never found us.
It was always the other way round.”


Margaret Atwood – poet – 1939 –



Ever since the general election was announced, I felt that the notice given by the PM was far too long and would almost certainly attract many more banana skins to skid on than is ideal. Though I doubt Mrs May will lose this election there are one or two policies which are simply not natural Tory policies or are just plain wrong. The idea that energy costs could be capped for a protracted period is crazy.  Oil and gas prices move!  They are not like door numbers! If the Government wants price constraint then legislate for the energy companies to bid for consumers on an annual basis for their custom – say first week in June. That auction would create a high degree of competition. And as for immigration to be kept to tens of thousands from 2019 is totally unrealistic.  Surely there was no need for the May government to stick its neck out unnecessarily. In closing on this subject I think Sir Lynton Crosby’s influence on this General Election has been very clever and inspired – a personal contest – May v Corbyn! There can only be one winner, I suspect.  


US stock markets had the wind taken out of their sails with news of a 6th, I am right in saying, nuclear test imminent from North Korea and the firing of FBI chief James Coney by President Trump.  I wonder if he might regret this action.  US markets closed as follows – DOW -0.17%, S&P -0.10%, NASDAQ +0.29% (another record level).


As the earning season draws to a close yesterday’s fayre was mainly focused on entertainment when Walt Disney and Liberty Media posted their results, though Apple +0.64% and Amazon +0.40% continued to make grounds in a tricky market overshadowed by geo-political events. Disney posted an 11% profit of $2.4 billion on a 3% increase in revenue of $13.3 billion, despite ESPN seeing a 3% dip in business.  The EPS came in at $1.0 against estimations of $1.41. As for John Malone’s Liberty Media which seems to be mulling over an investment in ITV, the numbers were rather more complex with two rather large one-off charges. A loss of $21 million was posted against a profit of $364 million last year thanks in the main to $49 million loss by Liberty Braves Group and a $96 billion charge taken against F1.


As for Asia this morning there is a school of thought that believes that the record levels attained by the S&P and the NASDAQ has had a very positive effect on many Far East bourses.  Tough taxation in Australia has almost certainly blighted progress of the ASX. At the time of writing these are the Asian market performances and YTD efforts – NIKKEI: 19,888 +0.23% +4.047%, HANG SENG: 25,113 +0.88% +14.035%, CHINA: 3,368 +0.48% +1.079, ASX: 5,875 +0.61% +3.579%



Yesterday European markets got it into their heads that European equity markets, boosted by a Macron victory, should crack on.  They did so cautiously with the FTSE adding 41 points to 7342, with mining stocks recently under duress recovering some poise.  Centrica’s shares were very volatile thanks to the spat over capping with the government, which CEO Ian Conn bitterly rejects – down 1.2% on the day. Poor Micro-Focus had a shocker.  It fell initially by 12% but closed down 5.6%, wiping about £500k in value off the shares. M-F is paying about £7 billion for Hewlett-Packard’s HPE Software and M-F announced that sales had recently dropped by 10%.  Many will remember that HWP bought Autonomy for $10 billion and after an unpleasant legal battle with CEO Mike Lynch had to write-off 75% of its value. With news that Standard Life’s merger in a £11 billion merger, which employs 9,000 staff, it has become apparent that the professional fees earned have been far from shabby – about £100 million with JP Morgan and Credit Suisse to the fore. PR has cost £500k and accountants £400k. Micro-Focus is a multinational software and information technology business. The firm provides software and consultancy services for clients updating legacy systems to more modern platforms. The DAX added 0.4% and the CAC 0.28%.


The introduction of the minimum wage cost John Lewis £36 million last year.  Profits were up from £289.9m to £452.2 million.  However the 86,700 partners saw their bonus down to 6% down from 15% 4 years ago.  Chairman Sir Charlie Mayfield has kindly waved his bonus of £66k but has had a 4.9% increase in his salary to £1.1 million.  ITV posted its numbers this morning in the wake of CEO Adam Crozier’s imminent departure after 7 years at the helm. Shareholders are displeased that he may receive £2m bonus and Chairman Sir Peter Bazalgette’s re-election has yet to be confirmed. ITV trading statement made solid if unspectacular reading with on-line sales up 32% catching the eye and viewing numbers up 4%.  It is worth mentioning that the quality of ITV’s programming and drama production has improved beyond all recognition. Finally since just before Adam Crozier took over ITV’s share price has rallied from 18p in 2009 to 203p today.



UK companies posting numbers this week – Wednesday – TalkTalk, Vertu, Compass, Barratt Development, ITV, National Express, Thursday – BT, SuperGroup, Amex Foster Wheeler,  Mondi, Coca-Cola HBC, Vedanta Resources, Beazley, Aldermore


US companies posting numbers – Tuesday – Wednesday – Snap Inc, Dean Foods, Wendy’s, Thursday – Kohl’s, Nordstrom, Friday – JC Penney


Economic data this week – Wednesday – NIESR GDP estimate, US FED budget balance, Thursday – BOE Inflation Report, RICS Housing, UK Manufacturing, Friday – US Retail Sales


 David Buik

Market Commentator – Panmure Gordon & Co

+44 (0)20 7886 2775
Mobile – 0044 7788 144 877
Panmure Gordon & Co


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