TODAY’S FAYRE – Thursday, 6th July 2017
“A thing of beauty is a joy for ever:
Its loveliness increases; it will never
Pass into nothingness; but still will keep
A bower quiet for us, and a sleep
Full of sweet dreams, and health, and quiet breathing.
Therefore, on every morrow, are we wreathing
A flowery band to bind us to the earth,
Spite of despondence, of the inhuman dearth
Of noble natures, of the gloomy days,
Of all the unhealthy and o’er-darkened ways
Made for our searching: yes, in spite of all,
Some shape of beauty moves away the pall
From our dark spirits. Such the sun, the moon,
Trees old, and young, sprouting a shady boon
For simple sheep; and such are daffodils
With the green world they live in; and clear rills
That for themselves a cooling covert make
‘Gainst the hot season; the mid-forest brake,
Rich with a sprinkling of fair musk-rose blooms:
And such too is the grandeur of the dooms
We have imagined for the mighty dead;
All lovely tales that we have heard or read:
An endless fountain of immortal drink,
Pouring unto us from the heaven’s brink.”
John Keats– poet – 1795-1821
I never thought there would ever be a time or an issue that I would find myself in wholesale agreement with J-C Juncker. Well I found one on Tuesday, when he castigated MEPS for not taking their duties seriously when only 30 turned up to ratify business. The European Commission President Jean-Claude Juncker launched a bitter attack on them, standing up in an almost empty chamber in Strasbourg, he denounced the body as “ridiculous, totally ridiculous”. He went on to say that their action proved that the parliament was “not serious”. Mr Juncker, I am sorry to have to remind you that the EU is a dysfunctional anachronism that simply does not work. Above all else I like to dream as well, for a perfect Utopia, but it will never be found in Strasbourg or Brussels.
I just love the way Frankfurt is gearing up for an assault of UK’S international bankers to re-house them in the historic town of Frankfurt – total population of 750k against London’s 12 million with tax concessions and bribes for ‘risk taking’ institutions, which of course can easily be reversed. It looks as though Nomura, Daiwa and Sumitomo Mitsui have been sucked in. Apparently some US banks are giving a move to Frankfurt serious consideration. No one seems to have thought about infrastructure issues, which suggest that a flight to Frankfurt post BREXIT may only be a trickle!
Today is the day I have been waiting for months – the start of the Lord’s Test Match – England v South Africa. As Fred Astaire sang all those years ago before even I was a twinkle in my father’s eye to Irving Berlin’s score of ‘Cheek to Cheek!’ back in 1935 – “ Heaven, I’m in heaven, And my heart beats so that I can hardly speak!”
Whilst I was on my way to a funeral, I listened intently to BBC Radio-5 Live’s Emma Barnett interview Lord Chris Patten – What a full life! – MP for Bath, Cabinet Minister, Conservative Party Chairman, EU Commissioner, Last Governor in Hong Kong, PR Advisor to Pope Francis, passionate European and chairman of BBC Trust. Not a bad CV! If you get a minute please download the conversation (Wednesday 5th July 10.00am) – a guinea a minute – visionary, lucid and clever. Don’t agree with him about BREXIT, but I would say that wouldn’t I?
G20 meeting takes place in Germany this weekend. China needs to step up to the plate to avoid a disastrous outcome to Kim Jong Un’s outrageous jingoistic behaviour. This is SERIOUS. It will be interesting to see what comes out of the first meeting between Donald Trump and Vladimir Putin!
Post-Independence Day machinations on Wall Street were hardly going to turn the earth on its axis. However crude prices settled about 4% lower, ending their longest bull run in more than five years, hurt by a stronger dollar and concerns about rising OPEC exports. Shares of Exxon and Chevron fell by more than 1.5% and were among the biggest drags on the Dow and S&P. The S&P energy index lost 2% and was the worst performing out of the 11 major S&P sectors. It is becoming apparent that recent tepid economic data and an inflation rate below the Fed’s 2% target may have a bearing on the US central bank’s plans for interest rate hikes.
The tech sector’s 1% rise led the S&P 500 gainers, with Advanced Micro Devices, Micron and Nvidia were among the best performers in the sector. The session on the Street of Dreams could justifiably be described as sepulchral. US Markets closed as follows with YTD achievements – DOW: 21,470 -0.01% +8.681% S&P: 2,432 +0.15% +8.652% NASDAQ: 5,548 +0.93% +16.144%
Yesterday poor UK productivity numbers did nothing to warm the cockles of investors’ hearts as activity fell below pre-2007 financial crisis levels. The FTSE 100 seemed unmoved as it gathered a measly 10 points to 7367. Still I suppose so many constituent companies have Dollar earnings. There were interesting figures from Ocado, which brushed aside the idea that Amazon could be a real danger to its business. I think it would be a good idea if Amazon bought it!! Persimmon posted a great set of numbers. JP Morgan dropped out of the race to buy WorldPay leaving Vantiv to pick up the £7.7 billion tab. Shares dropped 8.8%, but I shall not shed too many tears as the recent rise was meteoric (+28%). So it looks as though Antonio Horta Osorio will be staying on as CEO of Lloyds Banking Group. However after 5 years, Andrew Bester often thought of as Prince Regent and head of commercial banking will be moving on, as will Simon Davies, Head of legal and strategy. The two rising stars would appear to be Stephen Shelley, risk director of commercial division and Vim Maru head of the retail bank. I think the market will approve of Horta Osorio’s intended decision to remain in situ. AB Foods posted excellent progress by with its core business and Primark, which of course is very core! The performance for the year has been upgraded – shares rallied by 2.75% in early skirmishes. At 8.20am the FTSE 100 was down 5 points at 7362.
Despite a drop in oil and concern about North Korea, Asian markets remained calm – NIKKEI 19,976 -0.52% + 4.462% HS 25,504 -0.08% +15,805% CHINA 3,638 -0.55% +9.865% ASX 5,767 +0.07% +1.742%
Panmure Gordon’s chief economist SIMON FRENCH expresses the following comments on UK equities going forward – ”The backdrop to current UK equity valuations remains supportive. Global investors hunt for yield will not, in our view, diminish over the near term despite recent hawkishness from a number of prominent central bankers. Closer to home the domestic economy is proving resilient to political ineptitude. While the distributive impacts of globalization remain a concern, the immediate threats to the returns from risk assets have abated. We therefore reaffirm our upbeat outlook for UK equities – a position we have held since the start of Q4 2016.”
UK companies posting numbers this week – Thursday – AB Foods, Great Portland Estates, Friday – Dunelm
US Companies posting interim results this week – Thursday – Cherokee Inc
Economic data posted this week – Friday – Halifax House Price Index, UK Trade Balance, UK Industrial Production, US Non-Farm Payrolls & unemployment rate (4.3%)
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