TODAY’S FAYRE – Sunday, 30th July 2017



Here is the hard-bitten country of my birth.
In a dank corner between monkey-puzzle and sawpit
Lived, drunken Dick Spargo: how he made a living
I’ve often wondered – occasional cattle-dealing
And his wife’s bit of property, I suppose.
Fridays he’d come rolling home from market,
His breeches as tight, and every variety
Of knobbly stick or cane or switch to brandish,
Long moustaches dripping booze at ends. […]
Higher and higher, mount the last heave of the hill
To where the china-clay country begins:
The pyramids rise pure in colour and line,
On the other hand, the chasms torn in the earth
Vertiginously deep and frightening. […]
The road runs downwards now through china-clay
Villages with ancient rebarbative names:
Scredda, Rescorla, Hallaze and Stenalees,
A hog’s spine of hill mounding the western sky,
Carluddon, Carloggas and Resugga Green,
Penwithick Stents and Treverbyn vean, a tree
Or two in a hollow by the cemetery.
The view to the right across prehistoric moors,
Full of crosses, quoits and standing stones,
Circles and monoliths and dead men’s bones,
To Luxulyan tower suddenly lit by the sun. […]
Enter the last lap, a shallow valley
Of settling-pools, clay-dries and small farms,
Tall chimneys punctuate the tilted slope
To where at the top of the immense, frowning Rock
Of the medieval hermit looms and threatens,
Broken arch of chapel an eyehole at summit,
The eye of a needle the rich may not enter…
Down the descent by cobwalled Rock Inn
To the sombre garden where my ancient friend awaits me,
Eyes as blue as periwinkle in the border,
A rich and warm expressive Cornish voice,
With the crackle in it like foot on autumn leaves,
Smile like the early April sun coming out
Among windswept daffodils, their heads blown,
Spilled cups of gold upon clumps of heather
In this rockbound moorland fastness hemmed about
By all the temerarious flowers of spring.”



AL Rouse – historian & poet – 1903-1997


I paid a memorable visit to Ascot on Saturday. Prince Khalid Abdullah’s ‘Enable’, trained by John Gosden, is probably the best filly we have had in this country since ‘Ouija Board’, ‘Bosra Sham’ and ‘Oh So Sharp.’ She was a very worthy winner of the King George & Queen Elizabeth Stakes in fairly challenging conditions and awful weather.  I know she had the filly’s allowance, but no one really got a blow in, though Sir Michael Stoute’s ‘Ulysses’ ran a great race, beaten two lengths.  Surely her next stop is L’Arc de Triomphe on the first Sunday in October.  She must have an outstanding chance, is she gets there in good shape, without coming in to season.


Considering the sun is high on the yardarm, with holiday makers setting off ‘hot-foot’ to the French Riviera, the Costa del Crime, the Hamptons, Martha’s Vineyard or Rock in Cornwall, there was plenty of corporate news to keep punters and analysts on their toes last week. Starting in the US it was a huge week for technology, Solid Microsoft results pleased its acolytes last Friday week with Facebook posting revenue up 45% with profits up 71% last quarter, resulting in its shares rallying by 4% after hours on Wednesday (34%) for the year. Twitter has made little progress and its shares were larruped – down 14% on news of CEO Jack Dorney’s dispiriting news. The market held its breath as Jeff Bezos, CEO of Amazon (business started in 1995 and posted losses for 18 years!) went to the rostrum with the latest quarter’s results.  They were not as expected.  Though earnings were gargantuan $38 billion with sales up 25%, profits were down 77%.  Amazon is incurring huge expenditure such as taking on Netflix in its own backyard.  It will take time for these expansion plans to turn in to profit.


For 24 hours Amazon and Jeff Bezos had their day in the sun.  Briefly Amazon’s capital value breached through $500 billion threshold, though still behind Apple ($796 billion) and Alphabet ($664 billion) – an incredible achievement.  At the same time Jeff Bezos for a day was the richest man in the world – $91 billion with Bill Gates at $90 billion.  On Friday they flip-flopped as Amazon’s shares shed circa 3%. McDonald’s cracked on with the likes of Boeing, Caterpillar and Merck delivering the goods, with Intel on Friday posting a solid performance. Starbucks did not pass muster (shares down 9.2%); nor did Altria for reasons slightly beyond their control. The strength of nicotine has become a major issue with the FDA. Altria’s shares fell 9.4%.


Altria was not the only tobacco titan to suffer a battering.  Such was the case of BATS – down 6.8%, having been down 11% mid-morning and Imperial Brands, down 3.7% on Friday. And then, of course, there was the unfortunate plight of Astra Zeneca, whose share price fell 15% on news that Infinzi had failed to pass muster with the drug regulator and this fact exasperated expectations for Mystic, AZ’S lung cancer treatment which will hopefully replace chemotherapy one day. Many believe the visceral treatment of AZ’S share price was unwarranted and maybe overdone. 


It was also the start of the bank reporting season in London, with Lloyds stepping up to the plate on Thursday and Barclays on Friday. Both have cleaner balance sheets than before. However both are still continuing to be plagued by PPI claims. Both have had to make provision for another £700 million. However with the claims end date now agreed for spring 2018, perhaps there is light at the end of the tunnel. PPI claims have been almost as damaging as sub-prime lending and its derivatives coupled with poor credit decisions that plagued the 2008/9 banking crisis. PPI has cost Lloyds and Barclays £17 billion and £9 billion respectively. Barclays’ CEO Jes Staley says that the ‘Bald-Eagle’ has finished with restructuring. In line with other banks involved in investment banking Barclays saw its revenue down by 20% in the last half year. A one-off impairment of £1.2 billion was incurred in selling its African operation. No comment was made about the Qatar capital raising exercise or his personal issues with the FCA in regards to whistle-blowing!


There were also top efforts from IAG with profits up 37% and a real recovery effort from Ladbrokes Coral. However the market expressed its concern over the treatment of interest by Virgin Money. The headline numbers were good, but the market took the shares down by 8% on Tuesday but the stocks was only down 3.5% on the week. Royal Dutch Shell seems to have digested the £47 billion acquisition of BG and is well on the way to divesting itself on $30 billion of non-core assets. At the end of the week the S&P 500 finished just below the Plimsoll line – down 0.11%.  The FTSE was 1.1% lower, which was not a bad effort considering what happened to tobacco and drug sectors. Euro stocks remained in the doldrums – down 0.4% despite very good numbers from UBS and an improved effort by Deutsche Bank.


UK GDP for the second quarter came in at a slower rate than many hoped for – +0.3%.  This was lower than Germany 0.6%, France 0.5% and Spain 0.4%. However it should not be forgotten that our EU neighbours have improved from a much lower base than the UK has. Centrica may well have kept it promise not to raise tariffs, but this will affect profits, when it posts numbers on Tuesday. It is nine years since RBS had its disastrous £12 billion rights issue prior to Fred Goodwin and his colleagues dived in to the vortex of despair in buying ABN AMRO for £26 billion. It has just paid £4.2 billion to the US regulator for bond miss-selling and another £5 billion may well be heading in the direction of the DOJ.  Perhaps there is some light at the end of the tunnel with the possibility of RBS (71% owned by taxpayer) returning to private ownership in a couple of years.  The fact that the Williams & Glyn branches will not have to be sold will help contribute to the recovery process in SME lending. A profit of £600 million may be posted on Friday against a £2 billion loss last year. The Bank of England has served 5 weeks’ notice to provide information on how each bank is monitoring its lending, particularly those with doubtful credit ratings.  Consumer lending is getting out of control as it increases by about 10% per annum. HSBC is the first major company to set the earning ball rolling on Monday.  There may be a £2 billion share buy-back.  Mark Tucker of AIA will replace Douglas Flint on 1st October.


UK companies posting numbers this week – Monday – HSBC, Fidessa, Keller Group, Senior, Tuesday – Centrica, Taylor Wimpey, SDL, Man Group, Rolls Royce, Greggs, Direct Line, Meggitt, BP, Greggs, Genel, NWF Group, Filtronic, International Game Technology, Wednesday – Rio Tinto, Dignity, Travis Perkins, Aggreko, BAE Systems, Johnston Press, RSA Group, William Hill, StatPro, Standard Chartered Bank, Thursday – Cobham, Mondi, Serco, Shire, Inmarsat, eSure, LSE, Spirent, Portmeirion, Friday – RPS Group, Pearson, Aon, Royal Bank of Scotland, Merlin Entertainment, Millennium Copthorne,


 US companies posting results this week – Monday – Loew’s, Tuesday – Xerox, Pitney-Bowes, Sprint, Pfizer – Wednesday – Groupon, Time Warner, Metlife, Tesla, Zynga, Thursday – Aetna, Allergan, Yum Brands!, Kraft Heinz, Viacom, Friday – Revlon, Calgon Carbon


Economic Data – Monday – UK Mortgage approvals, Tuesday – Tuesday, UK PMI Manufacturing, Wednesday – UK PMI Construction, Wednesday – UK PMI Services, MPC Meeting, Friday – US Non-farm Payrolls & employment data.




 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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