TODAY’S FAYRE – Friday, 28th July 2017



“He was a mighty hunter in his youth

At Polmear all day on the mound, on the pounce

For anything moving, rabbit or bird or mouse-

My cat and I grow old together.


After a day’s hunting he’d come into the house

Delicate ears all stuck with fleas.

At Trenarren I’ve heard him sigh with pleasure

After a summer’s day in the long-grown leas-

My cat and I grow old together.


When I was a boy I wandered the roads

Up to the downs by gaunt Carn Grey,

Wrapt in a dream at end of day,

All around me the moor, below me the bay-

My cat and I grow old together.


Now we are too often apart, yet

Turning out of Central Park into the Plaza,

Or walking Lake Michigan Avenue against the lake-wind,

I see a little white shade in the shrubbery

Of far-off Trenarren, never far from my mind-

My cat and I grow old together.


When I come home from too much travelling

Cautiously he comes out of his lair to my call;

Receives me at first with a shy reproach

At long absence to him incomprehensible-

My cat and I grow old together.


No more frisking as of old

Or chasing his shadow over the lawn,

But a dignified old person, tickling

His nose against twig or flower in the border

Careful of his licked and polished appearance,

Ears like shell-whorls pink and transparent,

White plume waving proudly over the paths

Against a background of sea and blue hydrangeas-

My cat and I grow old together.”



AL Rouse – historian & poet – 1903-1997



The film ‘Dunkirk’ was all that it was cracked up to be! – Exciting, nationalistic, terrifying, courageous and beautifully filmed. Everyone from the age of 8 to 80 should see it. The most effective and chilling attribute of the film was the lack of talking in the script.  The action did the talking. There were wonderful cameo parts from Kenneth Branagh, Mark Rylance, Tom Hardy, Cillian Murphy and of course the thousands of civilian small boats who bravely made the journey to and from Dunkirk to the English coast line, shipping back 300,000 troops, desperately needed to bolster the war effort.  Even Harry Styles proved that there was a bit of a Thespian in him. It was a riveting production with very clever life-like special effects, filmed as if they really did take place in the Channel.


The earnings season really is under a wet sail on both sides of the Pond. In the US 2nd quarter earnings are expected to increase 10.7% from Q2 2016. Excluding the energy sector, the earnings growth estimate declines to 8.0%. Of the 239 companies in the S&P 500 that have reported earnings to date for Q2 2017, 73.6% have reported earnings above analyst expectations, according to Reuters. This is above the long-term average of 64% and above the prior four quarter average of 71%. The fact that the FED attached a benign note to their decision to leave interest rates unchanged until such time as inflation gets hold of the bit (2% circa at present) and or wage inflation gathers some momentum, no doubt helped Wall Street keep its equilibrium. Market experts remain somewhat flummoxed and frustrated that President Trump has failed to get much of his stimulating policies for business through Congress.  So the generally positive quality of earnings has prevented any sort of meaningful correction to equity bourses that remain at record levels or flirting with them.


Following in the wake of Facebook’s decent numbers on Wednesday (shares +4.02%) with sales +45% and profits up 71% to $3.89 billion for the last quarter on the back of 2 billion subscribers and 1 billion What’s App users, inevitably Twitter’s efforts were all but pitiful by comparison yesterday.  Subscriber were constant at 328 million, though US subscribers fell from 70 million to 68 million.  Sadly advertising revenue was wholly inadequate. Twitter’s shares tumbled by 14% to $16.84, having been $24 last October.  Amazon’s results saw profits down 77% ($197 million from $857 million last year) due to massive expansion plans in UK, Germany (Fresh) and TV on demand Channels. Sales were up 25% to $38 billion. Amazon shares fell 3.22% yesterday.  Amazon’s founder Jeff Bezos (company formed in 1995), remains just behind Bill Gates in terms of wealth – $88 billion against $89 billion. 

Wednesday and Thursday produced a massive slew of earnings.  The pick were decent numbers from Diageo and Royal Dutch Shell.  Shell’s £47 billion acquisition of BG is starting to pay dividends after a quiet period in terms of Shell’s share performance in the last year.  The oil mogul is making a fair fist of selling $30 billion of assets that are not core to the business going forward. Shell’s dividend remains attractive (47 cents). The yield to date is close to 6%.Lloyds Banking Group posted an 8% increase in pre-tax profits with a 16.6% return on equity. Tier One Capital stands at a very solid 14%. PPI is still a problem with a further £1 billion provision being made (£18 billion in total). The dividend is 1p – up 18%. Lloyds Banking share price dipped 2.3% to 67.48p yesterday (breakeven was 73p). However the taxpayer is finally out of this investment.  Shares have been dribbled out in the last 18 months thanks to some deft handling by Morgan Stanley. £21.2 billion has been returned to the taxpayer – £894 million more than the original investment, including a £400 million dividend.

Astra Zeneca really hit the buffers with news that its lung cancer drug, Mystic failed to pass muster with the regulator. The shares fell by 15% (£10 billion in value) to 4325p (remember Pfizer offered 5500 a share!). It was thought that this alternative to chemotherapy could be worth billions going forward.   CEO Pascal Soirot offered some solace with a £6.5 billion research tie up with Merck. Cynics could be forgiven for their diseased-ridden minds working overtime for the persistent rumours that prevailed that Soirot was off to Israel’s Teva.  Soirot’s riposte was ‘I am not a quitter!’


Today Barclays posted a profit of £2.34 billion for the half year. Tier One Capital was 13.1%. A write-down of £1.21 billion was made – provision for sale of Africa. PPI further provision of £700 million was made.  Return on equity was 7.2%, though investment banking revenue fell by 20% (equities interest rate products in the main). CEO Jes Staley said that restructuring was over and that Barclays would be spearheading its European banking from Dublin, but London remained in pole position as Europe’s leading financial centre. He made no comment about the Qatar court case or his outstanding ‘whistle blowing’ issues with FCA. Barclays’ shares are up 43% on the year, though down 12% since February 2017. BT’s results were average. Revenue was up 1% at £5.8 billion with profits down 42% as expected at £418 million. We await management changes in Italy and news on broadband front – So important for the company’s image as broadband is 3rd world quality.


It has become clear that the Financial Conduct Authority, according to CEO Andrew Bailey intends to replace LIBOR in 2021. Regulators intends to move the banking sector to a more reliable marker. It was insanity that until just a short time ago that a trade association should be responsible for acting as a mediator for $350 trillion worth of loans in an array of currencies. No decision has yet been made as to how the cost of loans and money will be calculated.  There is talk of a combination of overnight interest rate swaps, introducing 3 and 6 month Treasury Bills and maintaining perhaps some role for LIBOR. 



UK companies posting numbers this week – Friday – Barclays, Rightmove, Essentra, BT Group, UBM, IAG, Lonmin



    US companies posting results this week – Friday – American Airlines, Goodyear, Chevron, Exxon Mobil




 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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