TODAY’S FAYRE

TODAY’S FAYRE – Tuesday, 4th July 2017

 

“The force that through the green fuse drives the flower

Drives my green age; that blasts the roots of trees

Is my destroyer.

And I am dumb to tell the crooked rose

My youth is bent by the same wintry fever.

 

The force that drives the water through the rocks

Drives my red blood; that dries the mouthing streams

Turns mine to wax.

And I am dumb to mouth unto my veins

How at the mountain spring the same mouth sucks.

 

The hand that whirls the water in the pool

Stirs the quicksand; that ropes the blowing wind

Hauls my shroud sail.

And I am dumb to tell the hanging man

How of my clay is made the hangman’s lime.

 

The lips of time leech to the fountain head;

Love drips and gathers, but the fallen blood

Shall cam her sores.

And I am dumb to tell  a weather’s wind

How time has ticked a heaven round the stars.

 

And I am dumb to tell the lover’s tomb

How at my sheet goes the same crooked worm.”

 

Dylan Thomas– poet – 1914-1953

 

After such a desperate General Election campaign, you would have thought that the warring factions within this very fragile government would have buckled down and shown some unanimity behind their rather battle-scarred Prime Minister. By all means have robust debates on policy matters such a public sector pay and Brexit, but hanging out conflicting dirty linen for the media to ridicule must be folly in the extreme! We should all be mindful that for every 1% extra pay rise for the 5 million or so public sector workers costs £1.8 billion. Someone has to pay. So its higher taxation, borrowing or redundancies – two are unattractive options. As for taxation the government will need to be careful not to throw the baby out with the bath water.

 

The Street of Dreams only put in a half-day-shift ahead of Independence Day holiday today. But it was far from a bad shift. Here is how the session ended with YTD performances, with the DOW breaching through to a record level – DOW: 21,479 +0.61% +8.686 S&P: 2,429 +0.23%+8.495% NASDAQ: 5,596 -0.88% +15.078%. There was a touch of euphoria around, as there very often is on the first trading day of a new quarter. More often than not fresh funds trigger a modest rally. Last month the best performing sectors were as follows – biotech +9&, banks +8%, house builders +6% and pharmaceuticals+5%. The losers were oil services -5%, gold and mining -3% and telecoms -3%. Elon Musk’s Tesla Motors added 2% on news that its $35k electric car would be ready 2 weeks ahead of schedule. It is hoped that production will reach 20k a month by December and 500k in full capacity. If you’d bought these shares 5 years ago at $35 a pop, you would be preening yourself like a peacock – $352 a share! This company is valued at $59 billion against GM at $54 billion and Ford at $46 billion.

 

Yesterday the FTSE 100 enjoyed a decent quarter start adding 64 points at 7377. It was mining stocks that blazed the trail and despite caps being discussed on energy prices, the performance put in by utilities was far from shabby. Asian markets were mixed in the wake of Kim Jong Un’s capacity to rebel rouse with another missile test. I fear he is trying President Trump’s patience. Heading towards the close their bourses behaved as follows with YTD performances – NIKKEI: 20,004 -0.25% +4.587% HANG SENG: 25,365 -1.65% +15.43% CHINA: 3,616 -0.94% +9.31% ASX: 5,773 +1.57%, +1.881%.

 

This morning the market would have been surprised by J Sainsbury’s trading update. Many hedge fund managers were contemplating getting their teeth into retail by shorting some constituent stocks within the sector such as M&S, Next, Morrison, Sainsbury and Kingfisher, as a result of inflation and consumers having less disposable income. However CEO Mike Coupe posted very adequate like for like sales figures for the last quarter +2.3% excl fuel. Overall sales were up 4%. These numbers include Argos and we are led to believe that Argos outperformed the market. Overall transactions were up 1.9%. However shares have only risen 1% to 251p. These shares are up 10% on the year but 18% down since May 2017. Imagination Technology, despite the damage inflicted by Apple, which has withdrawn business support taking the shares down 60%, posted a 19% increase in revenues, with shares responding accordingly – up 6%.

 

It was good to hear that despite concerns over BREXIT, IPO business in London is still buoyant with 18 companies having raised £4.2 billion in the last quarter – one more company than in the previous quarter. Needless to say Allied Irish Banks accounted for 2.62 billion. Other companies of note included Eddie Stobart and Alfa Financial Software. To end on a fairly tacky note, many people will have been sad to hear of Mike Ashley’s alleged behavior at meetings concerning his £14 million spat with Merrill’s Jeff Blue. Talk of 12 pints of bear being drunk with kebabs being eaten at the board table and vomiting in the fireplace is disappointing. Hardly high class corporate governance.

 

UK companies posting numbers this week – Tuesday – Imagination Technology, J Sainsbury, Wednesday – Ocado, Booker, Topps Tiles, IAG, SIG, Persimmon, Thursday – AB Foods, Great Portland Estates, Friday – Dunelm

 

US Companies posting interim results this week – Wednesday – Yum China Holdings, Thursday – Cherokee Inc

 

Economic data posted this week – Tuesday – US PMI Construction, Wednesday – BRC Shop price Index, US Factory orders, Thursday – US Balance of Trade, Friday – Halifax House Price Index, UK Trade Balance, UK Industrial Production, US Non-Farm Payrolls & unemployment rate (4.3%)

 

 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 ​

Advertisements

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

%d bloggers like this: