TODAY’S FAYRE – Thursday 11th May 2017


“You’re sad because you’re sad. It’s psychic.

It’s the age. It’s chemical.

Go see a shrink or take a pill, or hug your sadness l

Like an eyeless doll you need to sleep.


Well, all children are sad but some get over it.

Count your blessings. Better than that, buy a hat.

Buy a coat or pet.

Take up dancing to forget. Forget what? 


Your sadness, your shadow, whatever it was

that was done to you the day of the lawn party

when you came inside flushed with the sun,

your mouth sulky with sugar, in your new dress


with the ribbon and the ice-cream smear,

and said to yourself in the bathroom,

I am not the favorite child.


My darling, when it comes right down to it

and the light fails and the fog rolls

in and you’re trapped in your overturned

body under a blanket or burning car,


and the red flame is seeping out of you

and igniting the tarmac beside your head or else the floor,

or else the pillow, none of us is; 

or else we all are.” 


Margaret Atwood – poet – 1939 –


Even allowing for my advancing years, I really do understand that enormous cities like London generate huge amounts of poisonous fumes and congestion. Of course everything must be done to combat this situation. Yes, I also ‘get it’ from a practical perspective that cycling should be encouraged. However there is no point gridlocking London, when your road system resembles a builder’s yard and the public transport on offer is marginally less than a joke. Also, without offending my good friend, Jim Moore of the Independent, a former cycling aficionado, something has to be done about the behaviour of a minority number of cyclists, who believe they have a divine right to aim their machines like missiles rather than ride them. For fitness and transport purposes cycling is great, but it should not be used as an opportunity to behave like a mad dervish! Cyclists have no right to be selfish and to act in an inconsiderate manner towards motorists and pedestrians alike – yes pedestrians, certainly in SW London – it’s your life in their hands! I think it’s time for readable registration plates and a £50 annual levy for cyclist above 18 years of age, with a view to enforcing the law against persistent transgressors. It will be hard to implement, but the current flagrant abuse is hard to put up with. Cyclists in Amsterdam behave properly, why can’t they in London? Yes, I know London is 10-times bigger. However we just have a bad culture of excessive aggression – cars and cyclists alike!

Boris Johnson may have given his assent to the cycle road – NOT path – on the Embankment; but whoever designed it and approved it must be brain dead. Cyclists don’t even stay in that lane. Too many of them don’t go fast enough to prevent a fair few using the hopelessly narrow road/lane as an alternative. London remains the most brilliant city, but it teeters on the brink of inefficiency. Mayor Khan – you have a 4 year mandate – do something practical about transport and our road system that will receive the accolade of the public, regardless of political persuasion, rather than swan around in photo shoots or constantly carping at Mrs May.


Yesterday equity acolytes on the Street of Dreams did not know whether to laugh or cry. FBI’S James Comey was summarily dismissed by President Trump – “He was not doing a good job!” Cover-up was being muttered under the breath of several of the eastern seaboard intelligentsia. The Dollar hit an eight day high against the Yen and oil prices started firming again. The earnings season continued to dribble on satisfactorily, with the NASDAQ hitting yet another record, until after hours when Evan Spiegel of Snap Inc posted its first set of earnings since its IPO in February, which valued the company at $24 billion.


Snap’s shares, originally issued at $17, rallied to over $25 until yesterday evening when disenchanted punters took the stock down 23% to $17.68 almost at the stroke of a pen. Revenue came in short at $149m for the last quarter against estimations of $159m, despite daily active users increasing 36% to from 122m to 166 million. The loss for the quarter was $2.2 billion. I was horrified from a social perspective that many active users spend 30 minutes a day on this app! 3 billion messages were sent every day up from 2.5 billion in the previous quarter. There was always a feeling that this social media giant was hopelessly over-valued. Advertising revenues will need to increase substantially. New York closed relatively flat – DOW: 20943 -0.16% +5.973%, S&P: 2,398 +0.08% +7.145%  NASDAQ: 5,681 +0.06% +16.82% (New record highs).


As for Asia, the Yen remained weak and oil prices continued with its modest rally in a market that was lacking in interest. NIKKEI: 19,962 +0.31% +4.487%, HANG SENG: 25,062 +0.19% +13.923%, CHINA: 3,316 -0.667 +0.197%, ASX: 5,875 unch +3.712%


Yesterday session in Europe apart from the FTSE 100, which gained 43 points to 7385, was a moribund affair with limited activity. Mining stocks had their moment and ITV and Barratt Development had modest issues going forward – both shares were down a short 2% on the day. AB Foods was upgraded by Citibank and added 2.4%. This morning BT posted its quarterly numbers. This company has fallen slightly from grace in the last year. The share price has fallen 30% from 440p a year ago to 307p. Why? CEO Gavin Paterson is perceived to have too much of a love affair with sport, with spending on football almost profligate. Openreach has been severely criticised and agreement has been reached on separate governance for this business. BT has been fined £42m and £300 million has been returned to suppliers as compensation. Then there was the Italian loss of circa £530 million over many years and it may eventually be a great deal more. Consequently profits were down 19% for the year and 48% for the quarter. It seems as though Mr Paterson may be forced to waive his bonus this year. About 4000 jobs will be dispensed with in the next 2 years.


Finally let’s consider the possible content of today’s ‘Inflation Report’ and the MPC meeting. The BOE is likely to ease GDP from 2% to 1.8% for 2017. Inflation is expected to taper off towards the end of the year to 2.7%. The recent strength of the Pound will have contributed to the easing of inflation by December. The MPC will have no stomach to raise rates this year unless inflation reaches 3%. Kirsten Forbes will probably remain alone as the one member of the MPC committee to seek a hike, though maybe Michael Saunders will have given the idea due consideration.


UK companies posting numbers this week – Thursday – BT, SuperGroup, Amec Foster Wheeler, Mondi, Coca-Cola HBC, Vedanta Resources, Beazley, Aldermore


US companies posting numbers – Snap Inc, Thursday – Kohl’s, Nordstrom, Friday – JC Penney


Economic data this week – 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

One New Change | London | EC4M 9AF



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