TODAY’S FAYRE – Sunday, 25th June 2017


“The charcoal -burner has tales to tell.

He lives in the Forest,

Alone in the Forest;

He sits in the Forest,

Alone in the Forest.

And the sun comes slanting between the trees,

And rabbits come up, and they give him good-morning,

And rabbits come up and say, “Beautiful morning”…

And the moon swings clear of the tall black trees,

And owls fly over and wish him good-night,

Quietly over to wish him good night…


And he sits and thinks of the things they know,

He and the Forest, alone together-

The springs that come and the summers that go,

Autumn dew on bracken and heather,

The drip of the Forest beneath the snow…

All the things they have seen,

All the things they have heard:

An April sky swept clean as a bird…..


Oh, the charcoal-burner has tales to tell!

And he lives in the Forest and knows us well.”

Darkest days experienced


AA Milne – poet – 1882–1956


 Though the country will never get over the horrors of the Grenfell Tower fire and the barbaric the terrorist attacks in Manchester and London and nor should they, these crises seem to have provided a springboard for political hysteria and unnecessary hatred.  It needs to stop. Political turmoil is one thing but personal vilification such as that aimed at PM May in recent weeks, is unacceptable. Not even Gordon Brown, in his most desperate moments or days or perhaps even the darkest days experienced by Jeremy Corbyn, Ed Miliband, Michael Foot, William Hague and Michael Howard in recent years, have ever seen these leaders subjected to such personal humiliation by the media, as PM May has been in the past 2 weeks. Yes, her General Election campaign under the lamentable stewardship of Crosby, Timothy and Hill was woeful. However, it is a terrifying thought that, with these BREXIT negotiations now at a sensitive stage, the visual media seems hell-bent in baying for her blood.  Yes, television has to be objective and truthful, but I never thought I would see the day when our press would go in and bat for the EU against the UK.  I just pray that PM May has the strength of character to stand up to the barrage of visceral attacks until her time is up – whenever that may be. It was good to see David Davis talking to Marr with a degree of conciliatory stability and a bit of loyalty, sadly missing in recent times in the Tory party. Thank God, I am in the twilight zone of life! I do not like what I see unfolding before my eyes!  


    As if that was not sufficient for one week, but no, the British & Irish Lions were subjected to the harsh realities of New Zealand rugby – professionally drubbed at Eden Park 30-15. England also lost it T-20 game against South Africa at Taunton and HM the Queen’s ‘Dartmouth’ was nowhere in the Hardwicke Stakes and Andy Murray was ‘blown away’ in the first round at Queen’s.  It has been a week to forget! However I suspect, in terms of the domestic political scene, it is just the start of the castigation process, due to come under a wet sail.


Since the end of June 2016 the FTSE 100 has been a currency play, with 60% of constituent stocks posting profits in Dollars.  It opened the year at 6261 and fell to 5982 on 27th June.  It closed at 7424 on Friday – up 24% in the last year.  With growth for 2017 now dipping below 2%, how long can this ‘currency play’ be trusted, particularly as oil prices have fallen quite significantly this year (circa 20%), down to below $45 a barrel?  There is a shortage of tech stocks in the FTSE 100 and export stocks cannot always be reliant on BAE Systems, Rolls Royce and Diageo. Governor Mark Carney has indicated that rates are unlikely to go up until after March 2019, despite the fact that the BOE’S Chief Economist, Andy Haldane has threatened to vote for an increase. This index is starting look a little fully valued, despite dropping below its record of 7547 achieved on 26th May 2017, two weeks before the disastrous election result. In the case of the FTSE 250, its recovery, based on the performance of the constituents companies is up 31% at 19639 in the same period, having breached the 20k threshold to 20024 on 26th May 2017. Recently there have been outstanding performances from Ferrexpo, Ocado, Capita, Coats, CLS, Melrose, Homeserve and Marshall – proper barometers of UK economic activity.


BREXIT could be tortuous in the next few months.  This will not be good for stability. Also the demographics of UK politics have changed – It’s now the young v the old. It social justice against disciplined economics and I know logic will go out of the window on a wave of understandable anger.  Investors must realise they could pay the price for mob oratory!


So with all this in mind your scribe remains astonished that UK equity markets, despite surrendering modest value in the last three weeks remains as resilient as they appears to be.  In the case of the US Donald Trump seems to have found the same defence mechanism as one of the previous incumbents in the White House – one William Jefferson Clinton – it’s called TEFLON.  Both were and are impervious to heat in the kitchen.  Despite the FED raising rates, US equities seem on an even keel, despite experiencing a bit of a wobble in energy and tech stocks recently, though the NASDAQ has largely rebounded. Last week the S&P 500 ended the week 0.24% in positive territory, though the FTSE 100 slipped 0.53% below the Plimsoll line. As for European stocks there was an air of inertia that prevailed – down 0.21%. The Nikkei enjoyed a tech rebound and added a short 1% in value on the week.  


In London, Whitbread produced an adequate trading statement.  Qatar served notice that it wanted a greater stake than 10% in American Airlines, presumably a start to rebuilding trust with the US post the Saudi spat. The Chinese banking system, not for the first time, came under close scrutiny. How robust is it?  Overseas Chinese investors saw their stocks savaged on Thursday, though there was a slight recovery on Friday, thanks to bad vibes from property investments abroad, the purchase of football clubs and other challenging assets. We have been here before and the problem will rear its ugly head again.  However the Chinese authorities seem to have the ability to politically paper over the cracks.  However, in recent years GDP has fallen from 12% to 6.7% officially, with many tower blocks in Chinese cities remaining empty – worrying! Also consumer credit is also all but off the scale. Thanks to the demolition job done by Apple on Imagination Technology, it is finally up for sale, having lost 60% of its value. Maybe Microsoft or Google might consider that this company might sit comfortably in their respective portfolios.


The big story of the week was the SFO’S decision to charge John Varley and four other former Barclays’ executives with fraud. I am cognoscenti of the threat and dangers of ‘perverting the court of justice’, but I would like to know WHAT FRAUD?  Could we know the nature of the charges please? This bank would have taken legal advice as what was required to consummate an injection of £8 billion of fresh capital by Qatar on both sides of the Pond. I fear that the Labour Government of the day was less than happy that Barclays refused to fall in to the nationalisation ‘in-tray.’ We wait with bated breath for the official charges. The public is not in command of the full facts or all the evidence; but there seems to be an air of desperation to get a conviction at all costs. At the same time the board of Barclays will be flat to the boards defending itself against the US Department of Justice over sub-prime lending activities. I suspect that the vivacious and ‘not to be tripled with’ Amanda Staveley is salivating at the prospect of Barclays having its pips squeezed in Court!  So it’s all go at No: 1 Churchill Place, Canary Wharf E14 5RD. Next week we should hear about any more adverse comment from its members on Sainsbury’s acquisition of Nisa.  The MOD wants to hear more news on Lockheed Martin delaying the delivery of parts for the Warrior tank. Finally keep an eye out for any interjection the BOE may make on credit-card-lending, which is threatening to over-heat!


UK companies posting numbers this week – Monday – Sirius, HSS Hire, Tuesday – Debenhams, Northgate, Carpetright, Petrofac, Wednesday – Dixons Carphone, Stagecoach, Bunzl, Tullow Oil, Kier Group, Thursday – Blur Group, Purple Bricks, Greene King, JD Sports, John Laing, Wood Group, Friday – Trinity Mirror, Serco


US Companies posting interim results this week – Tuesday – Darden Restaurants, KB Homes, Wednesday – General Mills, HB Fuller, Thursday – Walgreen Boots Alliance, Constellation Brands, Micron Technology, Nike, American Outdoor Group


Economic data posted this week – Monday – US Durable Good, Germany IFO, Tuesday – BBA Mortgage Approvals, Wednesday – Nationwide HPI, Friday – UK Gfk Consumer Confidence, UK GDP estimate, UK Revised Business Investment.


 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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