TODAY’S FAYRE – Politics, Central Banks, Sky & Markets

TODAY’S FAYRE – Thursday, 29th June 2017

 

And death shall have no dominion.

Dead man naked they shall be one

With the man in the wind and the west moon;

When their bones are picked clean and the clean bones gone,

They shall have stars at elbow and foot;

Though they go mad they shall be sane,

Though they sink through the sea they shall rise again;

Though lovers be lost love shall not;

And death shall have no dominion.

 

And death shall have no dominion.

Under the windings of the sea

They lying long shall not die windily;

Twisting on racks when sinews give way,

Strapped to a wheel, yet they shall not break;

Faith in their hands shall snap in two,

And the unicorn evils run them through;

Split all ends up they shan’t crack;

And death shall have no dominion.

 

And death shall have no dominion.

No more may gulls cry at their ears

Or waves break loud on the seashores;

Where blew a flower may a flower no more

Lift its head to the blows of the rain;

Though they be mad and dead as nails,

Heads of the characters hammer through daisies;

Break in the sun till the sun breaks down,

And death shall have no dominion.

 

Dyan Thomas – 1914-1953

 

Having had 24 hours to calm down and reflect on life, I have come to the very obvious conclusion that this country has fallen in to a vortex of dangerous social despair. The gap between ‘those that have’ and ‘those that do not’ has widened unacceptably.

 

 We have an acute housing problem – both owner/occupier, ‘buy-to-let’ and affordable housing plus private renting and council renting. Unemployment has gone down, but wages are stagnant and have been so for too long! The generational gap is also widening. Why should the 30-50 age group pay for the social care of the elderly, when they become infirmed or for that matter their health. I am not suggesting that those who have accumulated wealth over the years should not be able to pass on the lion’s share to their children/grandchildren, but some measurable contribution should be made to alleviate the burden of the young, in terms of taxation to pay for elderly social care that is fair. What a shame that parts of the Tory manifesto was presented in such a ham-fisted manner, without proper explanation. It was a truly awful exercise in incompetence that appeared cruel and uncaring.

 

It is hard to blame the young for supporting Jeremy Corbyn, when butter would not melt in his mouth and who keeps offering them succulent sweets they do not have to pay for. To them anything is better than Tory austerity, so why not try Labour’s sack-full of ‘terminological inexactitudes.’ They don’t feel any worse and even if they pay for it two years down the line, at least that will have satisfied their curiosity. The Government really has to work out a social policy that is fair to all, which also pays some attention to balancing the books.

 

Like thousands of others I am astonished that it has taken 28 years to bring criminal charges against six people, who are alleged to have been responsible for the Hillsborough tragedy in 1989. I suspect that those who have suffered from the Grenfell Tower disaster will give this government no more than six months to bring those alleged of wrong doing to book before the courts.

 

It would appear that rather as Unilever responded to Elliott Advisors rattled Paul Polson CEO of Unilever’s cage about failing to deliver shareholder value, Loeb has done the same with Nestle. He has taken a 1.3% stake in the Swiss food processing giant. Nestle have already responded by buying-back CHF 20 billion of shares. Nestle’s share price rallied by 1.3% today. We wait eagerly for further action.

 

Housing Doyen Henry Pryor tells us that HM Land Registry confirmed that just 481 £1m+ sales in England & Wales last month. 304 were in London.

 

The Street of Dreams enjoyed improved fortunes yesterday, with President Trump managing to stay away from a plethora of negative press. Financials were the best performing S&P sector, rising 1.6%. JP Morgan Chase and Bank of America, both rose more than 2%. These stock also rose ahead of stress test results expected from the Federal Reserve that could pave the way for the banks to return more capital to shareholders. Technology shares gained 1.3%, surging back from their worst day in more than two weeks. Apple rose 1.5% and TripAdvisor jumped 4.5%. Energy companies rose as oil futures climbed for the fifth consecutive day.

Consumer-focused companies also enjoyed the warmth of the summer sun as stocks recovered the previous day’s losses. Staples jumped 8.5% on reports of a possible sale. Medical device company Spectranetics added 26% after Dutch electronics and health care technology company Philips agreed to buy the company for $38.50 a share, or $1.68 billion. General Mills shares rose 1.6% after the ‘Cheerios’ cereal maker reported a better-than-expected quarterly profit. Staples shares rose 8.4%. The company may announce its sale to private equity firm Sycamore Partners. US markets closed as follows & YTD performances – DOW: 21,454 +0.68% +8.562% S&P: 2,440 +0.88% +9.016% NASDAQ: 5,753 +1.44% +18.287%

 

Asian markets today rode on the back of New York’s coattails and Central bank clarification on policy & YTD – NIKKEI 20,206 +0.38% +5.669% HANG SENG 25,881 +0.79% +17.679% CHINA 3,655 +0.26% +10.455% ASX 5,808 +0.91% +2.566%.

 

 

Miscommunication by Central bankers Mario Draghi and Mark Carney not only led the currency market a merry dance yesterday, but they also threw equity markets in to confusion. The FTSE 100 behaved like the Grand old Duke of York, initially reacting to Draghi implying that he would start tapering stimulus and then in the next breath telling the market it misinterpreted his comments. QE was not finished. Meanwhile back at the ranch, Mark Carney, having stated unequivocally at the last MPC meeting, which voted 5-2 for no change, that it was not the time for a rate change, which Andy Haldane, BOE Chief Economist contradicted the next day, also appeared to change his mind? Why? – Inflation and BREXIT uncertainty. Consequently, confusion ruled in abundance. The Euro initially hit its highest level for a year but post these eminent central bankers’ comments, Sterling headed for the moon relatively speaking $1.2960.

 

Yesterday the FTSE 100 dropped 46 points to 7387, with Tesco announcing that 1200 jobs would be shed as part of a £1.5 billion savings plan. Dave Lewis and his troops are likely to focus more for ‘On-line business.’ This morning the FTSE was up 35 at 7415. It was up 60 points at the opening but Sterling is nudging $1.30, which has damaged Dollar earning related stocks. Banks are on a roll on the back of New York, with HSBC the pick of the bunch – up 4.3%. JD Sports disappointed -4.5%, so did Wood Group – energy stocks remain perilous – -5%. Greene King’s numbers were solid – unchanged.

 

Culture Secretary Karen Bradley should tell us within the next hour that 21st Century can buy the remaining 61% of Sky for £11.7 billion. Ofcom and the CMA, despite protestations from the media not owned by Sky objecting to Sky/Murdoch/News Corpn’s domination, should advise M/S Bradley to tick the acquiescent box without further delay. SKY has been a brilliant employer creating a tremendous network in the UK, Germany and Italy. Apart from jealousy, there is not a scrap of meaningful evidence to block the deal.

 

UK companies posting numbers this week Friday – Trinity Mirror, Serco

 

US Companies posting interim results this week Thursday Walgreen Boots Alliance, Constellation Brands, Micron Technology, Nike, American Outdoor Group

 

​​Economic data posted this week –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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