TODAY’S FAYRE,- The Palace of Westminster , Retirement (whatever that means) & markets

TODAY’S FAYRE – Thursday, 20th July 2017

“Come, dear children, let us away;

Down and away below!

Now my brothers call from the bay,

Now the great winds shoreward blow,

Now the salt tides seaward flow;

Now the wild white horses play,

Champ and chafe and toss in the spray.

Children dear, let us away!

This way, this way!


Call her once before you go—

Call once yet!

In a voice that she will know:

“Margaret! Margaret!”

Children’s voices should be dear

(Call once more) to a mother’s ear;


Children’s voices, wild with pain—

Surely she will come again!

Call her once and come away;

This way, this way!

“Mother dear, we cannot stay!

The wild white horses foam and fret.”

Margaret! Margaret!


Come, dear children, come away down;

Call no more!

One last look at the white-wall’d town

And the little grey church on the windy shore,

Then come down!

She will not come though you call all day;

Come away, come away!”


Matthew Arnold – poet & author – 1822-1888


I had the most pleasurable of days yesterday, as the guest of Baroness Jenkin and also courtesy of my good friend James Max, with a guided tour of the Palace of Westminster including lunch in the House of Lords dining room, probably the most exclusive club in the country – What an exquisite emporium of history over the centuries! It was such a huge privilege; one that I shall treasure for a very long time. However the Palace is in a dilapidated state and in urgent need of reconstruction. Some of the facilities are anachronistically feudal. I understand that the renovation could cost £6 billion. Such is the decayed state of the whole building, I can believe it. This is money the country probably cannot afford. Perhaps, as my colleague Simon French has suggested, Parliament could be moved to Birmingham, if there is a purpose built building to house a thousand people. Maybe that would cost a great deal less than £6 billion and the Houses of Parliament could be renovated slowly as a museum for the great histories of this great democratic nation.


Many people muttering under their breath at the ignominy of having the retirement threshold raised to 68 by 2037-39 to qualify for OAP, need to wake up and smell the coffee. As we live to be older and whilst interest rates remain benign, there will be no money available. I genuinely believe that. I hope to be proved wrong. In the event of me being too pessimistic, I believe blue collar workers should have special dispensation, as physical work can takes its toll. They should be allowed to enjoy the twilight of their lives at 65.


Even though the Greenback remained weak, the Street of Dreams reached new records, with the S&P and the NASDAQ to the fore – DOW: 21,574 -0.25% +9.169% S&P: 2,460 +0.06% +9.906% NASDAQ: 5,880 +0.69% +20.90%. Yesterday’s earnings were better than expected, even though IBM was marginally disappointing – down 4.2% as were results from CSX – down 5.1%. The S&P 500 tech sector, which has been the best performing sector this year, broke its previous record closing high that it had held since March 2000. Vertex jumped as much as 26.4% to an all-time high of $167, a day after it reported positive results for its cystic fibrosis treatment. The stock ended up 20.8% at $159.69. Morgan Stanley added 3.3% after reporting better-than-expected numbers, with bond trading revenue declining only 4%. From the tech sector the usual suspects – Facebook, Amazon, Alphabet and Microsoft all enjoyed a bit of a run on the rails.


Simon French, Panmure’s chief economist made the following insightful observations on the Japanese economy post the BOJ meeting today. With Japan maintaining its 2.7% unemployment rate, -0.1% bank rate, QE on-going at Y80tn a year, it generates an inflation rate of just 0.4% YoY. Governor Kuroda has just revealed the BoJ thinks Japan’s inflation will now not hit 2% until FY2019, despite them injecting monetary heroin into every part of the economy. For example the BoJ now owns 45% of all JGBs and 71% of all Japanese equity ETFs. Easily dismissed as “well that is just Japan” the low inflation now being seen in the US, Eurozone is something that will worry the Fed/ ECB as in academic circles the Japan 90s case study is the precedent that no central banker wants to replicate.  Asian Markets headed towards the close in quite a buoyant mood as follows – NIKKEI: 20,020 +0.11% +4.657% HANG SENG: 26,646 +0.47% +21.165% CHINA: 3,699 +0.88% +11.793% ASX: 5,738 +0.91%, +1.257%.


Yesterday the FTSE 100 gained 40 odd points to 7431 with house builders leading the charge, aided and abetted by the Reckitt/McCormick deal. This morning the moderately upbeat mood filtered in to this morning’s opening salvos– up 35 points at 7466 at 10.00am. Though Moneysupermarket did not pass muster – down 13%, there were solid or encouraging numbers out there. Unilever saw sales up 3% and turnover by 5.5% in the last quarter, with net profits up 22%. It’s amazing how shareholder objection on failing to deliver adequate shareholder value can truly have the desired effect – shares up 0.8%. easyJet’s efforts were solid with passenger numbers increasing by 10.8% to 24 million with profits guidance for the year posted at between £380-£420 million. Now finally for Sports Direct’s Mike Ashley’s 10th anniversary since this high street cheap and cheerful outfitter came to the market with its shares priced at 330p. These shares hit 836p in 2014. Since then the company has been dogged by bad corporate governance, employment issues at its warehouse culminating with a court case of whether Mr Ashley promised Jeff Blue of Merrill a bonus of £14 million if SD’S share price reached a certain level. Anyway today’s profits for the last trading period fell by 57.8% to £113 million thanks mainly to currency vagaries. However Mike Ashley was quick to dismiss this number as a blip and was quick to point out that the company had paid £1.8 billion in tax as well as distributing £320 million of bonuses to 4,800 staff in the last decade.


UK Retail Sales were posted at 9.30am today. Simon French said – “These numbers were reasonable UK retail sales print. In the 3 months to June 2017, the quantity bought (volume) in the retail industry is estimated to have increased by 1.5%. The growth for Quarter 2 (Apr to June) 2017, follows a decline of 1.4% in Quarter 1 (Jan Mar) 2017. June itself was a 0.6% MoM increase – with online sales (16.2% of all sales hitting a new all-time record and up 15.9% YoY). We are not boom times as it was for retailers in 2016 but the wallets have not been slammed shut consistent with decent credit availability and a strong labour market.


UK companies posting numbers this week – Thursday – Sports Direct, Moneysupermarket, Unilever, Howden Joinery, Premier Foods, Anglo-American, SSE, EasyJet, Friday – Acacia Mining, Euromoney, Close Brothers, Vodafone.


US companies posting results this week – Thursday – Omnicom, Bank of New York Mellon, Travelers, Abbott Labs, Microsoft, eBay, Snap-on Inc, Philip Morris


Economic data posted this week – Thursday – CBI Industrial Order Expectations, US Initial Jobless Claims, Friday – UK PSBR, US PMI Manufacturing


 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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