TODAY’S FAYRE

TODAY’S FAYRE – Wednesday, 28th June 2017

 

Thou who seest all thing below,

Grant that Thy servants may go slow,

That they may study to comply

With regulations till they die.

 

Teach us, O Lord, to reverence

Committees more than common sense;

To train our minds to make no plan

And pass the baby when we can.

 

So when the tempter seeks to give

Us feelings of initiative,

Or when alone we go too far,

Chastise us with a circular.

 

Mid war and tumult, fire and storms

Give strength  O Lord, to deal out forms.

Thus may Thy servants ever be

A flock of perfect sheep for Thee.”

 

Anonymous

 

 

There are no better months in the year than June and July here in Old Blighty, with a plethora of world class sport, with the sun more often than not high on the yard arm, the smell of cut grass, the taste of Pimm’s No:1 and strawberries to savour!  We will always have the horrendous terrorist attacks in Manchester and in London plus the Grenfell Tower tragedy on our minds in perpetuity. However, Let’s try and put the dire General Election campaign behind us as well as the acrid stench of fear and hatred surrounding the BREXIT negotiations to the side whilst we attempt to enjoy two rugby tests – New Zealand v British & Irish Lions, a Test match v South Africa, the Wimbledon Championships and the Open Golf Championship – all to relish and enjoy! 

 

Yesterday’s session on the Street of Dreams was not one to relish. President Trump failed to get his healthcare bill through Congress. That did not help the mood in beautiful downtown Manhattan. Though banks held their own, tech stocks were under the cosh for most of the session. The gargantuan fine of €2.4 imposed on Google by Brussels for abusing its dominance in search as well parallel sales, which has been on the cards for some time, took the wind out of the sails of this flag ship sector. Shares dropped 2.25% yesterday. Margarethe Vestager the EU’S Competition Competitor, claims that Google’s stance has denied other companies the chance to compete and has left consumers with inadequate genuine choices. I know it’s not PC, but I find protectionism disingenuous. I am a great believer in charge what the traffic will bear and tend to dislike government or bureaucratic interference. Obviously Google will appeal.  There are concerns permeating around Washington that Google and other US companies are being discriminated against. Apple is still appealing against the writ to pay €13 billion for taxes incurred in Ireland, despite the Irish being against this claim.  There are serious ramifications with the US Government likely to be less accommodating over any trade deal going forward. Also the floodgates may be open for future civil claims against Google. Perhaps the arrogance of the EU may need to be tapered in dealing with US authorities, unless of course, the EU just doesn’t care! The EU has of course a bit of ‘previous’ against the US, when Neelie Kroes, one of Vestager’s predecessors, fined Microsoft $732 million for web-browsing misdemeanours in 2013, having served notice in 2009.

 

So unsurprisingly other tech stocks took some hits – Netflix -4.1%, Facebook -2%, Microsoft -1% and Amazon -1.73% – a combination of the Google syndrome and valuations. General Motors has adjusted its sales targets to lower levels. All in all it was a dispiriting session. Set out below was how New York closed – US markets close & YTD – DOW: 21,310 -0.12 +7.833% S&P: 2,419 -0.81% +8.064% NASDAQ: 5,671 -1.83% +16.613%.

 

 

Asian markets were reflective of the US markets with tech stocks in South Korea taking enjoying a little rough treatment, as investors awaited on a speech to be made by Janet Yellen in London on the US economy.  Also included are ‘the year to date’ achievements – NIKKEI: 20,163 -0.31% +5.492%, HANG SENG: 25,732 -0.41 +16.949%, CHINA: 3,662 -0.32% +10.743%, ASX: 5,756 +0.74% +1.606%.

 

So after diagnosis the prescription! We had our cards marked yesterday that Household debt stood at £1.5 trillion in the UK with consumer credit standing at £200 billion – this debt has increased by 10% per annum to dangerous levels. Car debt currently stands at £58 billion.  So BOE Governor Mark Carney has told UK domestic banks that they must build a special buffer of extra capital totaling £11.4 billion to be raised by them to prevent and repetition of the 2008/9 banking crisis. The threat of inflation could easily mean that some consumers could fall behind with their payments.

 

Yesterday the FTSE 100 eased by 12 points to 7434.  It was a good day for Carpetright and a poor one for Debenhams – down 2.25% having been down 3.37%.  Like-for-like sales dipped by 0.9%.  Retail sector is under the cosh, as wages fail to keep track with inflation.  So expect the hedge funds to mass their troops and take out some short positions on the likes of Debenhams, M&S, Next and maybe even Morrison, which has had a terrific run in the last year. This morning the FTSE 100 is down 40 points at 7390 as I write at 9.18am. The mood is slightly negative following in the footsteps of New York and Asia. Bunzl pleaded its acolytes – up 4.1%, so did Dixons Carphone who like for like sales were up 4% on the year.  Profits were up to £291 million – shares up 2.7%.  Petra Diamonds faltered – down 4.32%.

 

 

UK companies posting numbers this week – 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 – Wednesday – General Mills, HB Fuller, Thursday – Walgreen Boots Alliance, Constellation Brands, Micron Technology, Nike, American Outdoor Group

 

​​Economic data posted this week – 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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