TODAY’S FAYRE – Tuesday, 13th June 2017


“Out of the starless night that covers me,

(O tribulation of the wind that rolls!)

Black as the cloud of some tremendous spell,

The susurration of the sighing sea 

Sounds like the sobbing whisper of two souls

That tremble in a passion of farewell.


To the desires that trebled life in me,

(O melancholy of the wind that rolls!)

The dreams that seemed the future to foretell,

The hopes that mounted herward like the sea,

To all the sweet things sent on happy souls,

I cannot choose but bid a mute farewell.


And to the girl who was so much to me

(O lamentation of this wind that rolls!)

Since I may not the life of her compel, 

Out of the night, beside the sounding sea,

Full of the love that might have blent our souls,

A sad, a last, a long, supreme farewell.”


William E Henley – poet – 1849 –1902


Most of the country is either reeling from the unexpected and inconclusive result of the General Election or the likely instability and ramifications for business, industry and commerce in the months to come. We know that the Presidential campaign run by PM may was an unmitigated disaster, but perhaps we should all reflect on why this actually happened.

Recriminations are never very constructive. However the actions of two of the leading ‘dramatis personae’ – David Cameron and George Osborne – triggered the rather tawdry political fall-out from last week’s General Election.  Both in my opinion were respectively a very good PM and a very decent Chancellor, until ‘Project Fear’ started to ‘come under a wet sail.’ It is only fair to remember that David Cameron brought absolutely nothing meaningful back from his negotiations in Brussels.  The EU Referendum should have been a breeze for ‘remain.’ However the situation was compounded when both of them together with the help of the ‘establishment’ presented a shocking case for ‘remaining’ in the EU and since the 23rd June 2016, when ‘Leave’ prevailed, neither has shown the slightest remorse or any ‘mea culpa’ for their role in the most ill-judged campaign.


So here we are now with a very weak government, led by a PM who looks as though the ‘last rites’ have just been read to her and with members of her party and the media baying for her blood. We hear that skulduggery in terms of forcing a soft Brexit is being hatched amongst some Cabinet members.  If successful in persuading PM to soften her stance, it seems untenable that she can even consider remaining in situ, despite her protestations that having put us in this mess, she will get us out of it. The importance of the DUP and Scottish Conservatives to the Government’s voting power also makes PM May’s position look desperately fragile.


The EU, with President Macron likely to be endorsed by an unassailable majority and looking omnipotent, could well toy with the British government over BREXIT terms. The EU head honchos and bureaucrats have zero interest in being accommodating and will inevitably make ‘our pips squeak’. PM May and David Davis need to get back on the front foot PDQ. Business, industry and commerce have no appetite for indecision or delay.  Already there is an acrid stench of jingoistic bile from JC Juncker and the headlines in the FT, which suggest that Barnier thinks the UK is wasting time, do not augur well for the opening salvos of negotiation. He has a point that it nearly 3 months since Article 50 was triggered. However the EU was unavailable for the first 6 weeks.

The longer it takes to make decisions, the more investment will dry up and that could be disastrous for growth. The situation has changed, like it or not. The UK Government has no mandate.  So I venture to suggest that David Davis agrees that 3 million EU immigrants should be allowed to stay and that the million UK passport holders should be allowed to remain in the EU without delay. An olive branch should be immediately handed out.  Magnanimity could well be received positively. Let’s face having stood confidently tall a week ago, today our negotiating stance is very much weaker.

Yesterday the markets experienced a day of emotional atonement in the wake of the fall-out from the General Election coupled with the mountain the UK has to climb to reach agreement on leaving the EU. However the FTSE only fell 15 points to 7511, despite Sterling weakening to $126.50. What was really surprising was the FTSE 250 only falling 0.44%.  Mitie, under a new CEO Phil Bentley, recently CEO of British Gas who walked out of the ring with £10 million having failed to secure the top job at Centrica posted an upbeat statement. Despite a one off loss of £88 million, this service provider for the energy seemed to please its shareholders after an extended period in the doldrums, which included three profits warnings. BP and Vodafone were in good order in a very quiet and reflective market.


On the Street of Dreams US oil production provided some momentum for the likes of Exxon Mobile, but GE was the stand out stock from the DOW – up 3% on news that the chairman and CEO would be retiring. Jeff Immelt has been there since Jack Walsh retired over a decade ago!


However the big story of the day was the continued decline of the tech sector which saw the NASDAQ ease by another 0.52%. In real terms, tech stocks, the wake of a note from Goldman Sachs has seen tech stocks surrender $60 billion value since Friday morning, with Alphabet, Apple, Netflix, Amazon, Snap and Facebook suffering loses between 3 and 4.5%. In fairness since the beginning of the year these companies have gained between 25-34%, so a correction was inevitable. They will come again maybe in the autumn coats. It was interesting to note that Micro-Focus about to buy HWP Software and Sage manage to avoid really violent treatment. Yesterday Wall Street closed as follows – DOW -0.17%, S&P -0.10%, NASDAQ -0.52%. Asia was a bit more upbeat with the Hang up 0.6%, the ASX +1.6%, though the Nikkei closed flat.


This morning the FTSE is up 25 at 7535 at 9.05am. Capita rallied by 13.8% – a huge recovery after several profit warnings. The trading update looked very promising. Merlin eased by 3% and TED Baker, not without its problems in recent months saw sales up by 7% in the last trading period – shares up 3%. Tesco also looked positive ahead of Friday’s trading update. We await inflation numbers at 9.30am.


UK companies posting numbers this week – Tuesday – Halma, Ashtead, Oxford Instruments, Capita, Merlin Entertainment, Ted Baker, Wednesday – Charles, Stanley, Norcross, Mulberry, Bellway, WH Smith, Gym Group, Thursday – Consort Medical, Majestic Wine, WS Atkins, PZ Cussons, Drax, Friday – Tesco



Economic data this week – Tuesday – BRC Retail Sales Monitor, Inflation, Wednesday – UK Unemployment and wage data, Thursday – Retail Sales, MPC Meeting, Friday BOE Quarterly bulletin.


 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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