TODAY’S FAYRE – Wednesday, 31st May 2017
“Not we the conquered! Not to us the blame
Of them that flee, of them that basely yield;
Nor ours the shout of victory, the fame
Of them that vanquish in a stricken field.
That day of battle in the dusty heat
We lay and heard the bullets swish and sing
Like scythes amid the over-ripened wheat,
And we the harvest of their garnering.
Some yielded, No, not we! Not we, we swear
By these our wounds; this trench upon the hill
Where all the shell-strewn earth is seamed and bare,
Was ours to keep; and lo! we have it still.
We might have yielded, even we, but death
Came for our helper; like a sudden flood
The crashing darkness fell; our painful breath
We drew with gasps amid the choking blood.
The roar fell faint and farther off, and soon
Sank to a foolish humming in our ears,
Like crickets in the long, hot afternoon
Among the wheat fields of the olden years.
Before our eyes a boundless wall of red
Shot through by sudden streaks of jagged pain!
Then a slow-gathering darkness overhead
And rest came on us like a quiet rain.
Not we the conquered! Not to us the shame,
Who hold our earthen ramparts, nor shall cease
To hold them ever; victors we, who came
In that fierce moment to our honoured peace.”
John McCrae – Canadian soldier & poet – 1872 –1918
Like millions of others I found it very sad to see the sports pages plastered with a disheveled looking Tiger Woods. This golfing legend and sporting icon is in need of help and some TLC, despite the domestic problems of his past.
Lord’s looked magnificent last Sunday with the new Warner stand finished and full to the rafters. Sir Pelham would have chortled with approval and delight. Such a pity England’s woeful performance against South Africa did not do justice to the occasion.
Perhaps BA’S corporate communications and their PR advisors did not do as good a job as they thought they had over the weekend’s debacle, which grounded all flights and ruined thousands of holidays. It appears that no power company has come forward to endorse BA’S comments that its computer breakdown was power driven. Even if it was, where was the emergency/disaster back-up? IAG’s share price fell only 1%. If, after due diligence and further investigation, BA is found to have been economical with the truth, I think we might see the market show a degree of irritation. However I must confess these prickly issues tend to be conveniently lost in the small print. It strikes me that excessive cuts and insufficient contingency plans for technological breakdowns may be closer to the nub of the problem. The public waits in trepidation, Mr Cruz, for the full explanation. The silence may be deafening.
Global equity markets have been very frothy of late, either breaching record levels or flirting with them, despite political uncertainty in recent months in US, France and Holland, culminating with a bit of a wobble in the last week here in Old Blighty. The Times’ recent ‘YouGov’ model is not really a poll, but it certainly did the job of providing a wake-up-call to those, particularly in the city, who believe that a Corbyn led left-wing Government, would lead the UK down a rocky road into penury and economic damnation. Equity geeks refuse to believe in the possibility of that option, as the FTSE 100 only lost 21 points at 7526 yesterday and the FTSE 250 33 to 19991. Those working on the ‘Square Mile and down the road in Canary Wharf are resolute in the thought that Corbyn can wait another 5 years before such profligate policies are inflicted on the voters of this ‘Sceptred Isle!’
Much of yesterday’s gossip revolved around BA’S ‘weekend-horriblis’. Apart from that apathy set in with some miners like Glencore doing well, others remained somnolent. Drugs were mixed and banks were failing to create much in the way of interest, apart from Barclays, which lost 1.1%. This morning the Gfk Consumer Confidence Index came in at a 4 month high. The Pound wobbled towards the $1.28 threshold as the Times attempted to frighten us with ‘YouGov’s’ latest prognosis, suggesting a hung parliament. Equity markets this morning refused to countenance the idea and the FTSE was rock solid – up 10 points at 7536 at 8.30am. IAG’S shares are up by 0.5% – amazing and IG Group, which reported decent numbers were up 2%. BUT since the regulatory changes on CFDS IG’S share price has fallen 32% in 6 months since November 2016.
On the Street of Dreams it was again an anemic session and here are the closing levels &YTD performances – DOW: 21,029 -0.24%% +6.41% S&P: 2,412 -0.12% +7.775% NASDAQ: 5,794 +0.11% +19.142%. Banks were in the doldrums with Goldman down 1.9% and JP Morgan 1.7%. Oil stocks were also friendless in the ring – Chevron -0.63% and Exxon Mobil -0.55%. Telecoms provided a few bright spots with Verizon +1.94% and AT&T +1.13%. Amazon.com, responsible for 43% of all on-line retail business in the US and valued at £476 billion beat Alphabet to the punch in reaching $1000 share price, though it finally settled at $996. CEO Jeff Bezos brought this company to the market in May 1997 at $25 a share.
Asian markets seemed moribund with the strong Yen not helping Japanese stocks. Its performance so far plus YTD as follows: NIKKEI 19,623 -0.28% +2.66% HANG SENG 25,689 -0.05% +16.82% CHINA 3,478 -0.04% +5.13%, ASX 5,721 +0.07% +0.95%
LSE CEO Xavier Rolet certainly picked himself up and dusted himself down after the implosion of the merger with Deutsche Boerse. He has been back in to action adding shareholder value to the LSE’S excellent reputation. LSE paid £535 million for Citi World Leading Bond Index – and an IT analysis business – another two arrows to its already powerful bow. The share price rose 1.5% to 3442p. We all wait with awe and trepidation for the ‘big-deal’ – a merger with the likes of CME, making a truly global operation. Perhaps I am dreaming.
Ireland, despite having a population of only 4.76 million, has shown the EU how to beat austerity with consummate ease. Allied Irish Banks went down in the 2008/9 banking crisis for €21 billion. It has risen like the Phoenix from the Ashes and has returned to profit over the last 3 years and the Irish Government will be offering 25% of this bank for sale, probably next month, in both London and Dublin, valuing the operation at between €11-13 billion. This is good news for London. The bond between London and Dublin governments is strong despite the threat of BREXIT. This deal endorses that perception.
I notice that Greek 10-year bonds are close to yielding 6% again as Greece’s government looks to scrap with the EU over debt issues. €7.5 billion bonds mature in July as PM Tsipras looks to renew. The EU is venturing to suggest Greece has not suffered enough austerity. Greece’s total debt is €314 billion – 180% of GDP. Hell has a better chance of freezing over than Greece being in a position to service that debt let alone repay it. How can it with a population of 11 million and limited industry & commerce with just tourism and agriculture showing the way. So we go through the same old charade rather than let Greece go with a 40% devaluation of the Drachma, which would attract huge business. But oh no! Frau Merkel would not want to see her federal dream turn into a nightmare post BREXIT!
UK companies posting numbers this week – Wednesday – London Metric Property, Alpha Bank, IG Group, Thursday – Johnson Matthey, First Group, Friday – KCOM Group
US companies posting numbers – Wednesday – Analog Devices
Economic data this week – Wednesday – Gfk Consumer Confidence, UK Mortgage approvals, US ADP Employment Index, Chicago PMI, Thursday – UK PMI Manufacturing, US PMI Construction, Initial Jobless Claims, Friday US Non-Farm Payrolls (+183k) & employment data (unemployment 4.5%).
Market Commentator – Panmure Gordon & Co
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