Monthly Archives: October 2017

market update

As I write it is five minutes past the third hour. London’s main index, having started nervously in the wake of a poor performance in New York yesterday, followed by a neurotic effort in Asia, has held its own and is all square at 7490. It started down about 17 points rallied to +17 points , courtesy of a stellar gain by BP on good results (+3.8% but has drifted to being only up 1.5% as I write) and is now all square. WPP was down 2% on indifferent numbers, but the market quickly realised that the figures were considerably less awful than many expected and they have bounced sharply to stand +3%.


Ryanair, despite all its travails over pilots and fines is expected to meet its annual profit forecast and the punters believed the silvery-tongued Michael O’Leary, resulting in a 7% bounce in the shares. The government has posted its plans to curtail huge betting losses on slot machines. William Hill, Ladbrokes Coral and Paddy Power Betfair all rallied by 1.5%, 2.3% and 0.13%. Why? It is perceived that the government plans may be less draconian than many originally thought. The minimum bet is likely to be nearer £20 than £2 – so that move suggests any cut was more than priced it. Royal Mail Group was 5% easier on a bearish note from Berenberg. Other companies posting numbers today faired as follows – DS Smith +1%, Nostrum Oil & Gas -1.5% and Plus500 +2%.


On the Street of Dreams the DOW was up 20 points at the time of writing. Pfizer beat expectations but the shares had travelled and arrived – -1.5%.


TODAY’S FAYRE – Tuesday, 31st October 2017


“When melancholy Autumn comes to Wembley

And electric trains are lighted after tea

The poplars near the Stadium are trembly

With their tap and tap whispering to me,

Like the sound of little breakers

Spreading out along the surf-line

When the estuary’s filling

With the sea.


Then Harrow- on the– Hill’s a rocky island

And Harrow churchyard full of sailors’ graves

And the constant click and kissing of the trolley

Buses hissing

Is the level to the Wealdstone turned to waves

And the rumble of the railway

Is the thunder of the rollers

As they gather up for plunging

Into caves.


There’s a storm cloud to the westward over


There’s a line of harbour lights at Perivale,

Is it rounding rough Pentire in a flood of sunset


The little fleet of trawlers under sail?

Can those boats be only roof tops

As they stream along the skyline

In a race for port and Padstow

With the gale?”




Sir John Betjeman – poet laureate – 1906-1984




 Sir Winston Churchill once said: “We have our own dream and our own task. We are with Europe, but not of it. We are linked but not combined. We are interested and associated but not absorbed. If Britain must choose between Europe and the open sea she must always choose the open sea.”



I have to say, that in concert with thousands of others, how proud we should be of the England Under-17 team in winning their World Cup in Kolkota vanquishing Spain 5-2, having been down 0-2 after thirty minutes.  Let’s hope they can go on and establish themselves in the Premiership and thus make up the backbone of a great England team in 5 years’ time.  I suspect that I am dreaming, as ‘filthy-lucre’ will always attract many of the better players from around the world to come and play here in our ‘Sceptred Isle!’



You have to admire the flagrant contempt with which Messrs Clarke, Clegg and Adonis hold the British electorate.  Democracy be damned as far as they are concerned.  However I personally have far more issue with M Barnier.  He should have had the good grace, the good manners and the knowledge of etiquette to know it was entirely inappropriate for him to receive these three political titans, when negotiations have reached such a high degree of sensitivity.


So Netflix will no longer be screening Kevin Spacey’s ‘House of Cards!’ well there’s a surprise!


So the Bank of England posted a sensible though hysterical assessment of the damage a ‘no deal’ or ‘hard Brexit ‘would have on the financial sector. It would have been in dereliction of its duty not to have sent out a timely warning. Worst case scenario it could cost according to the BOE, 75k jobs, with 10k likely to be lost even in happier circumstances. The BOE is right for the metaphorical campanologists to ring ‘for whom the bell tolls!’ However I don’t believe a word of it. 75k jobs just cannot be transferred to Frankfurt (Micky Mouse town of 750k), Paris and Brussels. They don’t have the infrastructure and you know what? People do NOT want to work there! Good sense will prevail! It has to!



If Lloyd Blankfein want to keep goading the government about how attractive Frankfurt is and that Goldman’s European head office in London may be half-empty – so be it! Goldman has made millions of Dollars out of the UK Government over many years. To think they will replace that with German and French government business may be folly. France likes French banks and Germany likes Deutsche Bank!





Yesterday HSBC posted vastly improved results with last quarter’s profits coming in at $4.6 billion up by $3.8 billion this time last year on revenue of $13 billion (+3%) and for the last 9 months a profit before tax of $19.4 billion (up by $4.3 billion last year).  HSBC’S share price had risen by 19% in the last year and by a similar amount in the last 6 months to 737.47 (-1.45% on the day), so the market’s reception to these numbers was not really surprising – travelled and arrived. Tier One Capital improved to 14.6% from 13.0%. Asia and China are now responsible for 70% of the business with the US hardly a major feature. The bank spent £100 million ring fencing its UK operation with a new head office in Birmingham. Mark Tucker is now ensconced as chairman.  John Flint will take over from Stuart Gulliver next February as CEO. HSBC returned 8.2% on capital against 4.4% last year. Asset management grew by 17% and the dividend was maintained. There is now a very strong case for the ‘local’ bank to move its head office back to HK from London.


Yesterday the FTSE 100 lost 17 points to 7487 in a lack lustre session.  Apart from HSBC, EasyJet grabbed a few of the remaining headlines as CEO Carolyn McCall in an almost certainly valedictory move, before she heads off to ITV, bought a chunk of Air Berlin’s 25 leased aircraft (A320) for E40 million. EasyJet is also looking to take on 1000 air crew, which will give this budget airline a strong presence in Germany. The move will also rattle Ryanair’s Michael O’Leary’s cage. EasyJet’s share price has made a great recovery since March 2017 when it languished at 917p. It closed up 2.6% yesterday at 1306.6p. Today Ryanair posted its results for the last quarter. ASDA has not pleased its owner Walmart here in the UK.  Like the other supermarkets ASDA which was bought by the US juggernaut Walmart in 1999 has had a gruelling 3 years and saw its first quarterly sales rise in August 2017. CEO Sean Clarke, a lifer from Walmart is stepping down and will be replaced for the time being by Roger Burnley, a former B&Q, Sainsbury and Matalan director, who also worked under Archie Norman and Alan Leighton at ASDA in years gone by.


Ryanair posted numbers this morning – its profit after tax was 1.293 billion euros in the six months to the end of September, in line with an average forecast of 1.298 billion euros in a company poll of analysts. Ryanair reiterated its forecast that it would make a profit after tax of between 1.4 billion and 1.45 billion euros in its financial year, which ends on March 31, 2018. Ryanair has seen over 2 billion euros knocked off its share price since it announced the first wave of cancellations on Sept. 15, an emergency measure to free up standby pilots to ensure the smooth operation of its fleet of 400 planes. This aggressive budget airline said it had cut fares by 5% in the six months to months to Sept. 31, the first half of its financial year. Fares for the six months to March 31 will fall by between 4 and 6% rather than the 5 to 7% previously guided.


Wall Street pulled back from record-high territory on Monday as markets digested recent gains at the start of a week heavy on economic news. Merck shares declined weighing down the Dow jones and S&P 500. The Dow eased by 85 points, or 0.36%, to 23,349, the S&P 500 lost 8 points, or 0.32%, to 2,573 and the Nasdaq Composite dropped two points, or 0.03%, to 6,699.

Stocks pared losses late in the day amid signs that US President Donald Trump was close to picking Federal Reserve Governor Jerome Powell as head of the US central bank. Market watchers pointed to declines steepening after a Bloomberg report that the House of Representatives was discussing a gradual cut in corporate tax rates over several years.

Investors were also digesting the impact to Trump’s agenda from news that his former campaign manager, Paul Manafort, was charged with money laundering in the federal probe into Russian meddling in the 2016 presidential election. In corporate news, Apple shares gained 2.3% after analysts pointed to strong demand for the iPhone X. The board of Japan’s SoftBank Group Corp is having doubts about the merger it has been negotiating between its US wireless subsidiary Sprint Corp and T-Mobile US Inc, due to fears of losing control of a combined entity. Sprint shares fell 9.3% and T-Mobile ended off 5.4%.


This morning BP posted a much improved effort for the 3rd quarter – a replacement profit of $1.865 billion against $933 million last time. This was on revenues of $60.8 billion and an EPS of 6.98p. Now that the Gulf incident which cost over $40 billion is behind BP, let’s hope its ‘onwards and upwards!’ BP’s share price has been disappointing this year – up 7.5% including today’s rally. However the share price is up 50% from September 2015. WPP posted a disappointing though not unexpected trading statement. Like for like sales were down 1.1% and came in at 3.6 billion. CEO Sir Martin Sorrell gave the impression that apart from tech and healthcare the going is tough as business profits are wafer thin. WPP shares have fallen 16% this year and by 0.9% today.



UK companies posting results this week – Tuesday – BP, DS Smith, Croda, Getech, Ryanair, Earthport, WPP, Plus500, Nostrum Oil & Gas, Wednesday – Standard Chartered Bank, NEXT, Paddy Power Betfair, Just Group, Thursday – BT Group, Intu, Royal Dutch Shell, RSA, Tate & Lyle, Centamin, Howden Joinery, Wm Morrison, Amec, Foster, Wheeler, Randgold, Friday – Smith & Nephew, Informa


US companies posting interim results this week – Tuesday – Pfizer, Kellogg’s, US Steel Corpn, Wednesday – Pitney-Bowes, Bunge, Allergan, Facebook, Marathon Oil, Kraft Heinz, Metlife, Denny’s, Tesla, Thursday – Apple, Alibaba, Costco, Yum! Brands, Hyatt Hotels, Starbuck’s, Friday – Sotheby’s, Revlon


Economic data posted this coming week – UK mortgage approvals and net lending, US Personal Spending, Tuesday – Gfk Consumer Confidence, Wednesday – UK BRC index, UK PMI Manufacturing, Thursday – BOE Inflation Report & MPC, Friday – UK PMI Services, US Non-Farm Payrolls and 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



TODAY’S FAYRE – Sunday, 29th October 2017



“Thee too the years shall cover; thou shalt be 
As the rose born of one same blood with thee,
As a song sung, as a word said, and fall
Flower-wise, and be not any more at all,
Nor any memory of thee anywhere;
For never Muse has bound above thine hair
The high Pierian flower whose graft outgrows
All summer kinship of the mortal rose

Yea, thou shalt be forgotten like spilt wine,
Except these kisses of my lips on thine
Brand them with immortality; but me —
Men shall not see bright fire nor hear the sea,
Nor mix their hearts with music, nor behold
Cast forth of heaven, with feet of awful gold
And plumeless wings that make the right air blind,
Lightning, with thunder for a hound behind
Hunting through fields unfurrowed and unsown
But in the light and laughter, in the moan
And music, and in grasp of lip and hand
And shudder of water that makes felt on land
The immeasurable tremor of all the sea,
Memories shall mix and metaphors of me.”


Algernon Swinburne – poet – 1844-1909


I am in the process of reading an excellent book on ‘BREXIT’ and how it all came about – ‘ALL OUT WAR’ by the Sunday Times political editor Tim Shipman. Oh yes! I know what you all are saying, baying at me how you are sick to death of ‘BREXIT and how it has taken over our lives. However this book throws some real light on many of the dramatics personae in a balanced manner. It is brilliantly written.


Though I have yet to finish this ‘Magnus Opus’, what has come to light, which I would like to share with those of you who haven’t read this account, concern the main government players in the UK and the EU. Some of David Cameron’s and George Osborne’s advisors on the negotiations with the EU, thought they did not set their sights nearly high enough, when going in to bat in February 2016, when the ‘little’ they asked for became even more watered down, resulting in the poor PM coming back to London with virtually nothing.


Reading between the lines, Tusk, Juncker, Verhofstadt and unsurprisingly Merkel and Hollande had no intention of making the remotest sign of concessions on reform. In fact Hollande was hostile and the mood for federalism within the EU was growing like mushrooms. To all intents and purposes David Cameron should never have called for a referendum in June 2016. The PM and his followers’ case to remain was wafer thin and probably would not stand up to close and aggressive scrutiny. In fairness to George Osborne, he was never in favour of a referendum. It was his opinion that it was the government’s to lose. According to Nigel Farage the MEPS who used to gather for a glass or two after EU parliamentary sessions were absolutely bemused at how little the UK government demanded for reform! The rest is history. This book is a detailed, well-informed and outstanding account.



It’s been one ‘hell of a week’ again. Not only have markets had to digest the illegal decision by Catalonia to declare independence and the potentially dangerous ramifications, including the distinct possibility of damaging Spain by holing it below the waterline. This news also sent deeply unwelcome messages to the EU, who already have issues with the UK and possibly Italy, Poland, Hungary and Greece next year. There is also no doubt that the venomous Nicola Sturgeon will have been even more greatly heartened in her quest to gain independence for Scotland. Also President Trump has shown little appetite to get back on the bridle. This week he has focused on mainly on Syria, refusing, through Rex Tillerson, to support any kind of an Assad leadership. He will also make decision on the chairmanship of the FED and possibly more sanctions against Russia. The decision on the appointment of the FED chairman will be made next week.  Most punters do not expect Janet Yellen to be reappointed.  Informed sources expect either Powell, Taylor, Warsh or Cohn to land the spoils.


In Europe we had the ECB’S decision to postpone the tapering of quantitative easing until next September to consider as well as further bellicose and discouraging comments on the EU/UK negotiations – nothing particularly spiteful, but nothing particularly encouraging.


Here in the UK, though GDP for the 3rd quarter came in better than expected at +0.4% rather than 0.3% (annualised 1.5%), retail activity came in lower in September than for any month for eight years. The same applied to car sales – also in the doldrums! ‘Remainers’ could hardly contain their joy! BREXIT! Look I told you so! It is interesting to relate that on-line retail activity was as buoyant as ever. Despite this barrage of complex and potentially unsettling news, markets on a global basis remained quite calm and though there was a bit of a ‘sell-off’ on Wednesday, the net result on the week was extremely neutral – S&P +0.16%, FTSE 100 -0.24%, European bourses +0.80% and the NIKKEI +2.27% due to Abe-San’s euphoric election victory and a week Yen.  Though some way below 1989’s 38k level, the Nikkei hit its highest level for 21 years. Since the beginning of the year, the DOW is +18%, the S&P +14%, the Nasdaq +24.5%, the Hang Seng +28%, the Nikkei +28% and FTSE 100 +6%


Much of that recovery at the end of the week emanated in the US and was due to stellar results from Alphabet (+4.26%), Microsoft (+6.4%) and Amazon (+13.2%), whose shares blazed the trail. These astonishing share price movements have added gargantuan wealth to Jeff Bezos ($68 billion) and Bill Gates ($67 billion).  Both Amazon’s and Alphabet’s share prices have risen by close to 27% since the beginning of the year.  On the whole the earnings season has pleased investors with the likes of Caterpillar and 3Ms far exceeding expectations earlier in the week. Next week the market will eagerly await Apple’s numbers to be posted on Thursday. Slight concern has been expressed at the availability of the new iPhoneX.


Last week investors in London were preoccupied by bank results.  It took a bit of time for Lloyds’s results to be fairly digested but by the end of the week the shares were 3% to the good.  There were no further provisions for PPI, but investors may find this bank lacking in inspiration until we see some clarification over BREXIT. Though I am not an analyst, Lloyds should be well placed going forward.  As for Barclays, CEO Jes Staley’s presentation was not that convincing, as investment banking revenues, particularly trading, fell by 34% in comparison to this time last year. It should not be forgotten that Barclays have shed 60k staff globally and cuts its balance sheet by £300 million. Shares fell by 7% on Thursday. Jes Staley also has his own future to clarify re whistle-blowing problem.

Deutsche Bank saw trading revenues down by 24% with equity trading 16% light. UBS posted improved profits up 40% after massive restructuring.  It may also be that 1000 staff may not after all be leaving London.


It was RBS’s turn to step up on Friday.  Profits of £871m, Net £397m were posted. Tier One Capital stood at 15.5%, which was very encouraging.  No extra provisions for PPI were accounted for though there was a surprising £244 million restructuring costs.  There was no news on the DOJ fine estimated at between $5billion and $10 billion.  Until clarification, it will be difficult to sell the business back to the public, despite NatWest and others doing very well in isolation. Next week we hear from HSBC, knowing that John Flint will be replacing Stuart Gulliver as CEO next February.  Both BP and Royal Dutch Shell post numbers next Tuesday and Thursday respectively. With oil prices flying high profits are expected to double – BP to $1.5 billion for the 3rd quarter and Shell to $3.6 billion.


On Thursday the market expects the MPC to confirm a 25 basis point increase in bank rate to 0.5% – back to pre-referendum levels, where it stood for 8 years. This will be down to 3% inflation.  Regardless of what Mark Carney says it is difficult to see anything more than a symbolic increase with so many economic imponderables such as the value of the Pound and the so-called creaking UK economy under the strain of BREXIT.



UK companies posting results this week – HSBC, Millennium Copthorne, Glencore, Tuesday – BP, DS Smith, Croda, Getech, Ryanair, Earthport, WPP, Plus500, Nostrum Oil & Gas, Wednesday – Standard Chartered Bank, NEXT, Paddy Power Betfair,  Thursday – BT Group, Intu, Royal Dutch Shell, RSA, Tate & Lyle, Centamin, Howden Joinery, Wm Morrison, Amec, Foster, Wheeler, Randgold, Friday – Smith & Nephew, Informa


US companies posting interim results this week – Tuesday – Pfizer, Kellogg’s, US Steel Corpn, Wednesday – Pitney-Bowes, Bunge, Allergan, Facebook, Marathon Oil, Kraft Heinz, Metlife, Denny’s, Thursday – Apple, Costco, Yum! Brands, Hyatt Hotels, Starbuck’s, Friday – Sotheby’s, Revlon


Economic data posted this coming week – UK mortgage approvals and net lending, US Personal Spending, Tuesday – Gfk Consumer Confidence, Wednesday – UK BRC index, UK PMI Manufacturing, Thursday – BOE Inflation Report & MPC, Friday – UK PMI Services, US Non-Farm Payrolls and 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



TODAY’S FAYRE – Wednesday, 25th October 2017



On Sunday afternoons

In winter, snow in the air

People sit thick as birds

In the station buffet bar.

They know one another.

Some exchange a few words

But mostly they sit and stare

At the urns and the rock buns.


Not many trains today,

Not many are waiting for trains

Or waiting for anything

Except the time to pass.

The fug is thick on the glass

Beyond which, through honks and puffing,

An express shrugs and strains

To sidings not far away.


Here no one is saying goodbye;

Tears, promises to write,

Journeys, are not for them.

Here, there are other things

To mull over, till the dark brings

It’s usual burdensome

Thoughts of a place for the night,

A bit of warm and dry.


On Sunday afternoons

The loudspeaker has little to say

Of wherever the few trains go.

Not many are travellers.

But few are as still as these

Who sit here in the snow,

Passing the time away

Till night begins.”


Anthony Thwaite – poet – 1930


Kristin Scott-Thomas, Timothy Spall, Cillian Murphy, Emily Mortimer and Patricia Clarkson all starred in Sally Potter’s recently released black comedy – “The Party” Mmmm… – well certainly interesting but there were some beautiful cameo parts portrayed particularly adroitly by Scott-Thomas and Spall.  The humour was rather misplaced on me.  In fact I found it to be rather sick humour, which did not really capture my imagination. However the fact that it was filmed in ‘black & white’ added to the macabre atmosphere.  No accounting for taste these days and I suspect it will do very well.


Janet, celebrating her appointment as shadow health minister, invited her friends April, with her estranged German partner Gottfried, a life coach and professor Martha, with her partner, cook Jinny, and Janet’s colleague and subordinate Marianne, with her husband Tom, a casino banker. Before the party begins and even after the guests arrive, Janet’s husband Bill sits in his chair, listening to music, staring vacantly, and drinking wine. All invited guests come, with the exception of Marianne, who Tom says will arrive later. Tom is extremely nervous and immediately locks himself in the bathroom, where he sniffs some ‘white stuff’ examines a gun he has brought with him and encourages himself in the mirror. The plot unfolds! You won’t get close guessing what happens!


The BOE deputy governor for financial stability, Sir Jon Cunliffe has expressed confidence in the City of London’s standing as a financial hub post-Brexit.  He does not see its success being replicated on the continent. He thinks that whilst some job moves may well take place, the capital’s financial centre crown was unlikely to be displaced. “It may be that some activities that are carried out in London have to move to the continent and maybe some activities carried out in London no longer become efficient, and rather than moving to the continent, they just go back to New York or somewhere else, or maybe they don’t happen at all.”



Lloyds Banking Group posted a trading update today.  CEO Antonio Horta-Osorio, who has been in situ since March 2011 and apart from a couple of personal wobbles has done a great job in restoring some pride and respect in to the ‘Black Horse’, much of which disappeared when Lloyds bought HBOS in 2008 with indecent haste, which included its ‘Pandora’s box of ugly injudicious loans. The Government bailed the joint operation out for £20.3 billion and in fairness though the overall breakeven price for Lloyds was 73p, with various payments and dividends to UKFI, Lloyds is no longer obligated to the taxpayer, having dribbled out the final 15% stake in to the open market over a year with the final sale in May of this year, courtesy of the good offices of Morgan Stanley, who orchestrated much of the sale. In fact the government made a profit of £500 million from this regrettable transaction. Ironically when Horta-Osorio took over as CEO the share price was 67p where it is today, though it did get down to 40p in October 2012.



Lloyds posted a 38% increase for 9 months profits to £6.6 billion – profit after tax, up 50% at £3.1bn (£2.1bn for 9M 2016). 3rd quarter income was up 8%.  A pre-tax profits for Q3 of £1.95 billion was posted, a rise of 141% from the same period last year. Tier One Capital was solid at 14.9%. There were no provisions for PPI and no outstanding conduct issues – thank goodness! – The bank having already paid out £18 billion for these misdemeanours. Now that the bank has a clean balance sheet with no major commitment to investment banking it is hard to see where it goes for gravy. It must muster all its strength in to mortgage lending (judicious), lending to SMES and fin-tech. However for shareholders little sign of jam. It may be unreasonable to expect too much from Lloyd’s share price until this court case brought by shareholders over the negligent manner it bought HBOS.  The case is scheduled to last 14 weeks and could cost the bank £600 million. MBNA, the credit card operations, bought in December 2016 for £1.9 billion seems to have bedded down well, though yet to show outstanding results.


Yesterday the Dow added 168 points, or 0.72%, to end at 23,442, a record-high close. The S&P 500 gained four points, or 0.16%, to 2,569 and the Nasdaq Composite added 12 points, or 0.18%, to 6,598.  3M gained 5.9% and Caterpillar rose 5%, giving the Dow its biggest boost, after the companies reported quarterly results and gave upbeat outlooks.  Decent efforts also came from General Motors +3%. McDonald’s was + 0.3% with competent numbers.

Stocks trimmed gains late in the day amid reports Stanford University economist John Taylor may have won in a show of hands by Senate Republicans when asked by President Donald Trump about their support of potential nominees for Federal Reserve chair. Many market participants think Taylor, one of several names circulating for the Fed nomination, would be more hawkish than current Fed Chair Janet Yellen and other potential nominees. Biogen (BIIB.O) slipped 3.9% after disappointing US sales of a potential blockbuster drug, Spinraza and Whirlpool tumbled 10.5% after the home appliances maker reported profit and sales below estimates and lowered full-year earnings guidance


Yesterday the FTSE 100 finished near enough flat in a most uninteresting session with Whitbread down 5%.  Though Whitbread’s Premier Inn performance was good Costa’s sales were down 9% – Plenty of competition in the high street.  I think market makers were telling Alison Brittain the CEO that she may not have enough assortment of goods in her shopping basket. This morning Metro Bank disappointed, though superficially and historically, the numbers looked OK. Deposits from customers up £955m, 10% quarter-on-quarter to £10.8b ($14.4b), whilst the cost of deposits reduced from 53bp in Q2 2017 to 50bp in Q3 2017. Lending up £858m, 11% quarter-on-quarter to £8.6b ($11.5b) and a 1% increase in the loan to deposit ratio to 80%. Underlying profit before tax1 at £7.2m, a 77% increase from £4.0m in Q2 2017. Year to date underlying profit before tax1 is £13.2m versus £12.4m loss 2016. A record quarterly growth of 79,000 customer accounts to 1,124,000, up 33% year-on-year. GSK post numbers later this morning. At 9.30am UK GDP for the 3rd quarter is expected at +0.2% – 1.5% on an annualised basis. Industrial production and manufacturing only accounts for 15% of GDP – all eyes will be on the service sector.



Jayne-Anne Gadhia, chief executive of Virgin Money, has warned that sexism is deeply embedded in the financial services industry, citing several examples of discrimination she has encountered in her 25-year career and calling out investment banks for failing to back a government charter to promote gender diversity. Ms Gadhia, who led a government review of women in financial services, did not name the investment banks, but they are understood to be Goldman Sachs and JPMorgan Chase. Speaking to MPs on the Commons Treasury select committee yesterday, she also spoke of unsavoury behaviour at RBS, where she ran the mortgage business. Virgin Money is likely to be the first major financial operation with a female chairman and CEO, if Irene Dorner, ex HSBC is appointed chairman. 


UK companies posting results this week –Wednesday – Metro Bank, Lloyds Banking Group, GSK, Antofagasta, Thursday – BT Group, Barclays Bank, Debenhams, National Express, Vitesse Media, Relx, Kaz, Friday – RBS, AON, IAG, Shire, Hastings



US companies posting interim results this week – Tuesday – Caterpillar, Lockheed Martin, United Technologies, 3Ms, Biogen, Pulte, General Motors, Corning, AT&T, Texas Instruments, Wednesday – Walgreen Boots Alliance, General Dynamics, Boeing, Coca-Cola, Visa, Northrop Grumman, Amgen, Xilinx, Thursday – Xerox, BGC Partners, Hershey, Bristol Myers Squibb, Valero Energy, Alphabet, Microsoft, Expedia, Mattel, Twitter, Friday – Colgate-Palmolive, Chevron, Exxon Mobil, Weyerhaeuser, Goodyear, Abbvie, Merck

Economic data posted this coming week – Wednesday – UK GDP forecasts, US New Home Sales, Thursday – Nationwide UK House Prices, US Initial Jobless Claims – Friday – Preliminary US GDP


 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


TODAY’S FAYRE – Sunday, 22nd October 2017



I felt a Funeral, in my Brain,

And Mourners to and fro

Kept treading – treading – till it seemed

That Sense was breaking through –


And when they all were seated,

A Service, like a Drum –

Kept beating – beating – till I thought

My mind was going numb –


And then I heard them lift a Box

And creak across my Soul

With those same Boots of Lead, again,

Then Space – began to toll,


As all the Heavens were a Bell,

And Being, but an Ear,

And I, and Silence, some strange Race,

Wrecked, solitary, here –


And then a Plank in Reason, broke,

And I dropped down, and down –

And hit a World, at every plunge,

And Finished knowing – then –“



Emily Dickinson – poet – 1830-1886



Two weeks ago there appeared to be not a trace of ‘entente cordiale’ between EU politicians and negotiators with their UK counterparts. We seemed to be heading for ‘NO DEAL!’ After this weekend, is there a glimmer of hope? Maybe! But I won’t be holding my breath.  With the Tories so savagely split on this issue both in Cabinet and in the grass roots of the party, it is going to be painfully difficult to come to some accord, particularly as Labour appears, understandably, to be playing games, in the hope that they can bring the government down and win a quick General Election. I have been known to have a tilt at the ring and I am fairly confident that Labour would win the next election with a little in hand, unless the Government starts to show some leadership qualities on a domestic agenda rather than just carping over BREXIT all the time, Failure to do will just wean the public towards mad profligate economic policies. Also EU politicians will be cognoscent of not pushing Mrs May too far over a financial divorce settlement.  If they do, the alternative may be unattractive for the EU – a right wing HARD-BREXIT Government or a profligate rudderless Labour government!


I never or rarely knock Goldman Sachs – maybe over their handling of Greece’s economy in conjunction with Angela Merkel a decade or so ago. This investment bank makes a fortune for its clients and its employees and I am a great believer in paying on results. So no moaning from these cheap seats. The management has always tended to pay in stock options rather than in cash, even in the good old bad old days. So that endears them to me even more!


In recent years Lloyd Blankfein has been an excellent CEO, if a bit quirky or ‘left-field’ than one would expect from a Wall Street banker. Back in 2009 he referred to himself as ‘just a banker doing God’s work!’ In recent years he has made a brave and stoical recovery from cancer.


On Thursday he surprised us with a ‘tweet’ sent to the world at large ‘a la Trump’ extolling the virtues of Frankfurt as a great place to do financial transactions. Do me a favour! How can a ‘Mickey Mouse’ town like Frankfurt with 750k people compete with London as a major financial centre? It would take years to produce adequate infrastructure against a city like London stooped in trading/banking with 12 million people. I would also like to remind Mr Blankfein that for many years Goldman has earned millions of Dollars annually in fees from the UK government. Admittedly Goldman’s advice has been sound. However it might be folly to irritate the UK government by goading it. There are other investment banks this business could be placed with. I very much doubt he would replace this business with German and French fees. Germany is for Germans and France is for French – always has been always will be! Deutsche Bank and BNP Paribas would fancy their chances. Let’s hope Mr Blankfein is just being playful and urging Mrs May and Mr Davis and their advisors to ‘get the lead out!’


Sir Mike Rake – the quintessential FTSE 100 chairman – went in batting for the ‘Establishment’ on Friday, warning that BREXIT negotiations could take a decade to sort out and agree. I am sure he was speaking for big business and the anti-BREXIT media, but as for most SMES and small operations, which export and import a comparatively modest percentage of EU goods, I fear his comments would have fallen on deaf ears.



Forgive for smirking, in the same manner ‘Remainers’ do at the temporary setback there has been on BREXIT, but the fact that President Macron is faltering on his quest for a quick EU resolution on agreement on tax for US tech groups, has brought a smug smile to my face.  He will soon discover that he does not walk on water, which so many French voters thought he did.


Until Friday Kim Jong Un did his best not to grab all the headlines.  So there was plenty to go around.  US equities breached new records.  Global equities got through the 30th anniversary of Black Monday without a ‘whoopsy!’ The earning season was going adequately. Markets were unmoved at the possibility of Trump appointing another FED Chairman to replace Yellen – Could be Walsh, Cohn or even Taylor and also ‘play it again Sam’ with another term for Yellen.  We shall see.  In terms of the earning season, Goldman and Morgan Stanley posted good numbers, though trading profits were down.  Health care had a decent run on the rails with Johnson & Johnson and UnitedHealth both beating expectation.



Domestically unemployment fell by 54k in the last three months to its lowest level since April 2009. Retail sales dropped by 0.8% in September leaving the annual rate at +1.5%. The doomsters and the ‘Remainers’ were shouting euphorically from the roof-tops! So in conjunction with Sterling, which bobbed around like a cork in a bath dependent on Mrs May’s plight and the quality of the economic data, so did the FTSE 100 dance in concert with ‘Cable’ within a narrow range. The FTSE 100 ended the week just below the Plimsoll line -0.16%.  European bourses fell similarly by -0.19% and the NIKKEI continued to blaze the trail thanks to a weaker Yen – +1.42%. Unilever posted indifferent numbers (-5%). Merlin Entertainment took a good slapping down 16% on poor results blamed partly on terrorism. There were two bad profits warning from Interserve (-25%) and IWG (formerly Regus -35%). Banks grabbed more adverse headlines than they bargained for.  Lloyds Banking Group came under the cosh over shareholders’ civil trial for negligence in buying HBOS.  HSBC and Standard Chartered are both in the dock for alleged money laundering in South Africa in connection with Zuma and Gupta. Both banks have already been fined for similar misdemeanours in UK for issues in Iran (SC fined £187m) and Mexico (HSBC fined 1.9 billion). John Flynn will replace Stuart Gulliver as CEO of HSBC next year.  Gold fell to $1279 an ounce and Nymex oil was firm at $51.50 a barrel.



This week Lloyds Banking Group, Barclays and RBS post numbers on Wednesday, Thursday and Friday.  HSBC and Standard Chartered report in early November.  In the past month, bank shares in the UK with the exception of RBS (+12.4%) have performed quite conservatively in comparison to their counterparts in the US, where most have risen by in excess of 10%. Lloyds (+2.6%), Barclays (+4.3%) and HSBC (+5.3%).  BT also reports on Thursday. Jan Du Plessis will become chairman early in 2018.  He and many key shareholders want answers from Gavin Patterson, CEO, on BT Global business and its poor internet service and the excessive amount spent on sport (£900 million). In just under two years the share price has fallen from 499p to 272p! Spire, the healthcare group may be the subject of a £1.3 billion bid from South Africa. As UK growth shows signs of coming off the boil, profit warnings have increased from 45 to 75 in the last quarter.




UK companies posting results this week – Monday – Essential, Creech, Petra Diamonds, Tuesday – Gear4Music, St James’s Place, Whitbread, Bloomsbury Publishing, Pentair, Bunzl, Carpetright, Anglo-American, Wednesday – Metro Bank, Lloyds Banking Group, GSK, Antofagasta, Thursday – BT Group, Barclays Bank, Debenhams, National Express, Vitesse Media, Relx, Kaz, Friday – RBS, AON, IAG, Shire, Hastings


US companies posting interim results this week – Monday – Halliburton, Knoll, Whirlpool, Tuesday – Caterpillar, Lockheed Martin, United Technologies, 3Ms, Biogen, Pulte, General Motors, Corning, AT&T, Texas Instruments, Wednesday – Walgreen Boots Alliance, General Dynamics, Boeing, Coca-Cola, Visa, Northrop Grumman, Amgen, Xilinx, Thursday – Xerox, BGC Partners, Hershey, Bristol Myers Squibb, Valero Energy, Alphabet, Microsoft, Expedia, Mattel, Twitter, Friday – Colgate-Palmolive, Chevron, Exxon Mobil, Weyerhaeuser, Goodyear, Abbvie, Merck

Economic data posted this coming week – Monday – US PMI Manufacturing & Services, Wednesday – UK GDP forecasts, US New Home Sales, Thursday – Nationwide UK House Prices, US Initial Jobless Claims – Friday – Preliminary US GDP


 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


TODAY’S FAYRE – Thursday, 19th October 2017

“Because I could not stop for Death –

He kindly stopped for me –

The Carriage held but just Ourselves –

And Immortality.


We slowly drove – He knew no haste

And I had put away

My labor and my leisure too,

For His Civility –


We passed the School, where Children strove

At Recess – in the Ring –

We passed the Fields of Gazing Grain –

We passed the Setting Sun –


Or rather – He passed Us –

The Dews drew quivering and Chill –

For only Gossamer, my Gown –

My Tippet – only Tulle –


We paused before a House that seemed

A Swelling of the Ground –

The Roof was scarcely visible –

The Cornice – in the Ground –


Since then – ’tis Centuries – and yet

Feels shorter than the Day

I first surmised the Horses’ Heads

Were toward Eternity –“


Emily Dickinson – poet – 1830-1886


A very good friend of mine came up with this idea as a solution to BREXIT, which, if the Government had iron resolve to implement it or if there was any chance that the EU would show the slightest inclination to reform, many in the UK might go along with it.  Of course, we all know that on both counts that ‘hell has a better chance of freezing over’ than either side accommodating this idea. He said –


“I reckon time is coming to say ‘to hell with’ Brexit and for the Government to tell the E.U. we are staying, in the capacity of being the most obnoxious and troublesome member imaginable. We would be a focus for the non-federal enthusiasts and could become a nightmare for Merkel/Macron. A very Gallic approach of withholding monies would be adopted, generally disagreeing with Juncker and wreaking considerable havoc could be very effective and we would achieve all you want in both our lifetimes.” The very thought makes me smile.


Just in passing, as the EU negotiations seem to be grinding to a halt, though some think Barnier has been cut a bit of slack by EU leaders, let me send a message of warning to the EU, in good faith. When two juggernauts crash head on, both get hurt, maybe one more than another. Before EU, you wrap yourself in to what you perceived cocoon of immunity, so many of your business will be adversely affected by a ‘NO DEAL’ outcome. Can you imagine what IG Metall will be saying to Merkel as the hordes of redundant car workers leave factories in Wolfsburg and Munich?


I was cheered by the front page of CityAM this morning – ‘CITY’S BREXIT BLUEPRINT GAINS GROUND AS GERMANY LAYS OUT EU-UK TRADE PLAN!’ Now that’s better, think positive!


Today, as we all know is the 30th anniversary of Black Monday, when the DOW lost 23% in a day and the FTSE 10.8% (26% in the month of October). There have been other adverse movements in the month of October in 1993, 2000 and 2008. Will there be a serious sell-off this year with two weeks to go? It seems unlikely. The BREXIT impasse is of great concern. The Trump/Kim spat is even more terrifying. The earnings season is proving quite satisfactory. If interest rates are raised aggressively in the US, then that might be a signal for a correction. Come March or April 2018, there could well be an overdue shake-out on over-valuations, but I doubt that it would measure with the magnitude of 1987. Who knows?


Yesterday, the Dow Jones closed above the 23,000 level for the first time on, driven by strong quarterly results from IBM, which lifted its shares to their biggest one-day gain since 2009. The S&P 500 and Nasdaq Composite also ticked up to record closing highs. The Dow Jones rose 160 points, or 0.7%, to 23,158, the S&P 500 gained two points, or 0.07%, to 2,561 and the Nasdaq Composite added one point, or 0.01%, to 6,624.

IBM jumped 8.9% and was responsible for 89 points of the Dow’s increase. Bank stocks recovered from recent post-earnings losses. Bullish calls by brokerages helped to support the bank shares. Gains by Goldman Sachs accounted for another 40 points of the Dow’s climb. In deal news, Anthem, the second-largest US health insurer, rose 2.4% after announcing that it’s entered a prescription benefits management deal with CVS. After the bell, shares of eBay (EBAY.O) fell 4% following its results. Will Janet Yellen keep her job as chairman of the FED or will the job to Taylor, Walsh, Cohn or Powell? All will be revealed by President Trump in a couple of weeks’ time. As we headed towards the close in Asia, equities were mixed, despite China posting more than acceptable GDP data – ASX +0.09%, Shanghai -0.38%, Hang Seng -0.16%, Nikkei +0.66%.

This morning the FTSE 100 was down 20 points at 7525 at 10.30am. It dropped briefly to 7485, after Spain seeking a final deadline for Catalonia to drop a secession bid has passed, with Spain warning it will suspend the region’s autonomy. Cable dipped to £1.3150, slightly easier on poor EU negotiations perception. Unilever posted marginally disappointing results with sales looking slightly light and its shares fell 4.24%. Interserve posted another profits warning and shareholders vented their spleen taking the shares lower by an eye-watering 25%.


 The LSE announcement that its CEO Xavier Rolet was leaving, is a massive loss.  Clearly Rolet has thrown his toys out of his pram re BREXIT.  However his achievements have been considerable.  In the nine years he has been there, after an awful period of inertia under Dame Clara Furse spent her time fighting off financial predators, resulting in the LSE surrendering market share, Xavier Rolet restored the LSE’S pride, respect and global influence. The share price in that period has risen from 500p to 3875p. He was a colossus as a leader with his investment banking background, providing real impetus in developing this exchange. There have been more international IPOS, much better technology and greater attention paid to the AIM Market


One mistake he made in good faith was when he opened up all the LSE’S books including LCH’s in an abortive attempt to merge with Deutsche Boerse. With BREXIT hovering over the deal, it was always in doubt – suspect negative influence from German shareholders.  


Who could succeed? – One obvious candidate to me is MICHAEL SPENCER, assuming the LSE bought/merged with NEX which would make the joint venture the most complete exchange!  At least I can dream!!

UK companies posting results this week – Thursday – Unilever, Rank, Schroders, Genel, Segro, Friday – Acacia Mining, Dechra Pharmaceuticals


US companies posting interim results this week – Thursday – Philip Morris, Bank of New York Mellon, PayPal, Friday – Citizens Bank, Procter & Gamble, Schlumberger, General Electric


 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 



TODAY’S FAYRE – Wednesday, 18th October 2017


The curtains were half drawn, the floor was swept

And strewn with rushes, rosemary and may

Lay thick upon the bed on which I lay,

Where through the lattice ivy-shadows crept.

He leaned above me, thinking that I slept

And could not hear him; but I heard him say,

‘Poor child, poor child’: and as he turned away

Came a deep silence, and I knew he wept.

He did not touch the shroud, or raise the fold

That hid my face, or take my hand in his,

Or ruffle the smooth pillows for my head:

He did not love me living; but once dead

He pitied me; and very sweet it is

To know he still is warm though I am cold.”


Christina Rossetti – poet – 1830-1894


There was Mark Carney – Governor of the Bank of England, former alumni of Goldman Sachs, suave, with matinee idol looks at the age of 52, and fit as a butcher’s dog, giving evidence in Portcullis House!  He is the commensurate professional in terms of presentation whilst capturing his audience’s imagination on issues like inflation, interest rates and monetary policy. He gave evidence yesterday at the Treasury Select Committee chaired by the former Education Secretary Nicky Morgan. He was on top of his game answering questions on the latest inflation number for September, which was posted at 9.30am.


Inflation came in at 3% – the highest level since April 2012. The main thrust for this level of inflation was transport costs including flying and the cost of food, which was put down AGAIN on BREXIT. Pensioners will be pleased, as their remuneration will be increased by 3% for the next year – rather higher than most public sector workers. There is a strong suspicion that sufficient members of the MPC can now be persuaded that rates should go up next month by 0.25% back to the pre-referendum level. Officially wages rose by 2.1% for the three months to July. It is rumoured that this level may now be closer to 3% for the last three months.


Inflation now seems to be geared almost exclusively to the value of the Pound. Mark Carney’s remarks at the Treasury Select Committee on inflation and BREXIT coupled with the perception that UK/EU negotiations seem moribund, saw the Pound drift from $1.3250 against the Greenback to $1.3186.  Assuming the Pound does not fall out of bed in the next 6 months, which is a considerable assumption, inflation should peak next month to no higher than 3.2%.  By the end of next summer, with the sting now out of commodity and raw material prices, inflation is expected to be nearer 2% than 3%. Mark Carney seems very comfortable in his own skin.  However rarely have I seen a BOE Governor’s remarks be so influential on the movement of foreign exchange prices! Mind you, rarely has a BOE Governor been so high-profile! I think the City of London was more than grateful to Mr Carney for warning the EU of the dangers of moving clearing from London to a European centre just for the sake retribution for leaving the EU.  A spontaneous move could damage the system with the only beneficiary being the US.


I do hope that BIS Secretary Greg Clark’s intended legislation to protect companies from overseas predators will be adopted for PURELY security based reasons, as well as continued employment.  We do not want to deal or live in a protectionist society like Germany or France, who rarely, if ever, allow one of their companies to be taken over by an overseas operator – well not in my memory ‘since the Old King died.’ I hope the UK is all about free markets and capitalism. Failure to grasp this nettle could see a Conservative Government slam the door on foreign investment – the very time we need it the most. I didn’t much care for the Government’s idea that takeovers of tech operations may see the claw back of their subsidies. The whole idea is to encourage investment and employment.



I think we are all grateful for the comments made by the OECD’S highly respected Secretary General, Angel Gurria, that another referendum on EU membership for the UK would be a good idea for its economy.  The OECD is an independent think tank, which receives plenty of financial support from the EU. However I suspect ‘hell has a better chance of freezing over’ than that eventuality. Due to the very bad blood that is perceived to prevail between the EU and the UK, emotions are running very high on both sides of the argument, which makes the intransigence adopted by each interested party wholly understandable.


Andrew Bailey, Managing Director of the FCA speaking at a dinner in the Mansion House last night said –The City has a “well established” model of cross-border cooperation, which needs no intervention as a result of Brexit. Let’s not beat about the bush, this model works – it works well for investors and for investment managers. So, why disrupt it, or put another way, must it be disrupted?” he asked. “What we have done is to help to put into effect, with firms, a system that serves the public interest. Does it require membership of the EU to make this system work? No it does not.”



London experienced another cheerless session yesterday with the FTSE falling by a modest 11 points at 7516. Two FTSE 100 companies experienced diametrically different emotions.  Having been in the doldrums for three years, John Fallon, CEO of Pearson, the education publisher, which in years gone by used to own Lazard Bros, Chateau Latour, Madame Tussaud and the FT in their portfolio, finally posted sales and profits to please their investors, resulting in its shares rallying by 7.3%. Unfortunately Merlin Entertainments, the owners of Alton Towers, Thorpe, Park, Legoland, Madame Tussaud and the London Eye, had a shocker when CEO Nick Varney posted a shocker. Despite plans to open Peppa Pig Theme Hotels and a deal with Bear Grylls, Merlin posted a 0.3% increase in sales for the previous 40 weeks. Why?  Two reasons come to mind. Even though London and the UK are so very popular with tourists, it appears that the threat of terrorism is having an adverse effect on activity in their theme parks (down 2.1%0.  Also some foreign exchange hedging seems to have gone awry. The shares, on that dispiriting news fell by 15.9% to 378p.



Yesterday the Street of Dreams was underpinned by results from UnitedHealth (+5.5%) and Johnson & Johnson (+3.4%) boosting positive sentiment, thus extending the recent uptrend. The Dow Jones Industrial Average rose 40 points, or 0.18%, to end at 22,997 after rising as high as 23,002. The S&P 500 gained two points, or 0.07%, to 2,559 (both records) and the Nasdaq Composite was flat at 6,624. Financials were the biggest drag on the S&P 500, with shares of Goldman Sachs down 2.6% despite reporting a profit beat and smaller-than-expected trading revenue fall. Morgan Stanley rose 0.4% after the Wall Street bank reported earnings that easily beat forecasts as its wealth-management business continued to make reliable profits. Netflix slipped 1.6% after touching a record high as more subscribers signed up for its original content in the latest quarter. Boeing Co. shares were down 0.4% after rival aircraft maker Airbus took a 50.01% stake in Bombardier Inc.’s C-Series jets.  Asian stocks seem listless, as markets wait for news from Chinese Congress – ASX +0.18%, Shanghai +0.27%, Hang Seng +0.02%, Nikkei +0.13% – as we ahead to the close.


This morning Reckitt Benckiser posted numbers. CEO Rakesh Kapoor said – “Q3 was a soft quarter as we experienced both the tail end of known issues, and the impact of a continuing challenging market environment.  Our underlying performance was in line with current market growth of around 2%.  MJN had a better quarter, in particular in Greater China.  Given these moving parts, we are now targeting flat full year LFL net revenue for the RB base business.  MJN is progressing well against our reiterated H2 target of “-2% to flat”.   Shares may open down 2%


UK companies posting results this week – Wednesday – Reckitt Benckiser, Hochschild Mining, Hilton Food Group, Thursday – Rank, Schroders, Genel, Segro, Friday – Acacia Mining, Dechra Pharmaceuticals


US companies posting interim results this week – Wednesday – Abbotts Labs, eBay, American Express, Thursday – Philip Morris, Bank of New York Mellon, PayPal, Friday – Citizens Bank, Procter & Gamble, Schlumberger, General Electric


 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


TODAY’S FAYRE – Tuesday, 17th October 2017


 “I wish I could remember that first day,

First hour, first moment of your meeting me,

If bright or dim the season, it might be

Summer or Winter for aught I can say;

So unrecorded did it slip away,

So blind was I to see and to foresee,

So dull to mark the budding of my tree

That would not blossom yet for many a May.

If only I could recollect it, such

A day of days! I let it come and go

As traceless as a thaw of bygone snow;

It seemed to mean so little, meant so much;

If only now I could recall that touch,

First touch of hand in hand – Did one but know”


Christina Rossetti – poet – 1830-1894


The celebrated New York columnist and economist Martin Armstrong reminds us of a few indisputable facts – “A root cause for Congressional ineffectiveness will be found in the simple fact that the exercise of good governmental judgment cannot possibly compete with re-election pressures. This is why term limits are ABSOLUTELY MANDATORY, if the US ever hopes to have a reasonable government. There is a substantial conflict between good government and corrupt ineffective government. Congress has merely been transformed into a school how to be corrupt and get away with it.


Congress has only at best a 31% approval rating as against Trump at 41%. Democrats in Congress are at 29% with Republicans at 36%. Nancy Pelosi is at 35% and Chuck Summer is at 23%. Yet CNN and the New York Times bash Trump as being so unpopular while they ignore Congress’ approval rating.”  Could someone please explain that to us? No letters or emails of abuse, I merely pass on comment made in the US!


So Messrs May, Davis and Barrow headed for dinner to dine with Messrs Juncker and Barnier last night.  I must confess 90 minutes is not very long to experience Europe’s finest cuisine, washed down with a few glasses of decent Pomerol, and make sense of difficult divorce proceedings and an agenda of complicated trade negotiations. I suspect the EU does not really care whether a deal is done, though they ought to, as failure to do so, will also cost them.  However I suspect they would rather metaphorically cut off their noses to spite their faces than concede ground. I understand that officially J-C Juncker, with veiled charm at the dinner dug deep to make the right noises. Whether they are just platitudes remains to be seen. However PM May needs to understand that the longer we procrastinate hoping for an accord, the more the economy will be adversely affected. I think little or no progress will have been made by Friday. Positive intent would be helpful, but I cannot see it, so long as night follows day!  I sincerely hope I am wrong!



Though the FTSE 100 fell by 8 points yesterday to 7526, suggesting a somewhat boring session, there were in fact a few nuggets of news that kept dealers on their toes or the spirits buoyed or dispirited, depending on what side of various trades they were involved in. On the main market it was the mining sector that grabbed investors’ imagination. Rio Tinto posted an update, followed by BHP Billiton this morning, which saw Rio’s shares rally by a short one per cent to 3178p. Glencore have achieved amazing results in the last 21 months. Its share price has rallied from 75p to 382.4p and many investors believe that Glencore’s incredible franchise will deliver even greater success, particularly with China likely to return as the main contributor in precious metals, through its expanding economy.


Rightmove posted a 1.1% increase in UK House prices, but sadly this increase is not reflected in turnover – where sales were down 5.9% on last year. Having recently seen Lidl overtake Waitrose in terms of market share in supermarket business, the German operator announced the building of a massive warehouse in Peterborough which will create another 500 jobs. Daimler announced that it may have to recall 400,000 Mercedes Benz cars due to airbag safety issues. On the positive front a deal was announced whereby Airbus would take a 50.1% stake in the Bombardier C-series jet project. This should get round the visceral 300% import tariff that the US Government was proposing to impose, based on the perception that Boeing were being unfairly discriminated against. I find that idea astonishing as the planes manufactured by both are different. Also Boeing has a decent sized presence in the UK. Anyway this is an ideal solution to what could have been a very tricky political problem.



There were comments reported in the Sunday Times last weekend that RBS CEO Ross McEwan was tired of the bank being bad-mouthed over alleged sub-standard behaviour within the GRG Group. He said “if people are unhappy with our procedures then sue!” I have to say I rather agree with him. No doubt when Treasury Select Committee chairman Nicky Morgan finally sees the FCA’S report, all will be revealed and those who feel they have been wronged can take their cases to the high court!


The Street of Dreams rose to record closing highs yesterday, with the Dow Jones finishing less than 50 points below 23,000, as investors looked ahead to the release of major corporate earnings this week – +0.18% to 22957, with the S&P 500 gaining 0.18%, to 2,558 and the Nasdaq Composite +0.28%, to 6,624. Financial shares recovered from last week’s losses with JP Morgan Chase and Bank of America leading the charge. JP Morgan was up 2.1%, while Bank of America was up 1.6%. Netflix (NFLX.O) gained 1.6% during the session and rose another 2% after the bell following the release of its results. However this company is valued at $80 billion and its shares have risen 64% this year. Apple (AAPL.O) shares gained 1.8% following a bullish brokerage call on the iPhone maker. S&P healthcare stocks were among the biggest laggards, with the index falling 0.4%.


Asian markets felt relaxed rather than inspired this morning as Dollar rallies & oil firms – the main indices stood at the time of writing towards the close – ASX +0.77%, Shanghai -0.01%, Hang Seng +0.16%, Nikkei +0.28%. it is generally felt that China should tighten monetary policy as CPI growth will accelerate to about 3%, according to a 21st Century Business Herald commentary by a State Information Centre economist. The nation should keep its fiscal policy loose while preventing local debt risks and strengthening property controls.


The FTSE is down 5 points at 7520 at 8.45am. Merlin Entertainment took a real ‘purler!’ – Down 19% to 360p, thanks to total growth only rising 0.4% over the past 40 weeks. The company appears to have enjoyed adverse foreign exchange reverses. Pearson saw global revenue grow by 4% in the first nine months of the year, which was much better than expected! – Shares up 6.6%. ASOS posted bumper sales, with overseas sales bouncing by 145%. Shares however travelled and arrived.


Inflation is expected is expected to come in a 3% this morning (9.30am). This may well trigger a rate increase next month, back to pre-referendum levels, due as much to consumer borrowing boom as well as inflation – surely the only one in the foreseeable future with the UK economy coming off the boil due to BREXIT uncertainty. Inflation may well flat-line before easing a tad in the middle of 2018.


UK companies posting results this week – Tuesday – Pearson, Merlin Entertainment, Moneysupermarket, Virgin Money, BP Marsh & Partners, ASOS, Wednesday – Reckitt Benckiser, Hochschild Mining, Thursday – Rank, Schroders, Genel, Segro, Friday – Acacia Mining, Dechra Pharmaceuticals


US companies posting interim results this week – Monday – CSX group, Tuesday – Morgan Stanley, Goldman Sachs, Omnicom, Harley-Davidson, UnitedHealth, Wednesday – Abbotts Labs, eBay, American Express, Thursday – Philip Morris, Bank of New York Mellon, PayPal, Friday – Citizens Bank, Procter & Gamble, Schlumberger, General Electric


 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



TODAY’S FAYRE – Sunday, 15th October 2017


He saw her from the bottom of the stairs

Before she saw him. She was starting down,

Looking back over her shoulder at some fear.

She took a doubtful step and then undid it

To raise herself and look again. He spoke

Advancing toward her: ‘What is it you see

From up there always—for I want to know.’

She turned and sank upon her skirts at that,

And her face changed from terrified to dull.

He said to gain time: ‘What is it you see,’

Mounting until she cowered under him.

‘I will find out now—you must tell me, dear.’

She, in her place, refused him any help

With the least stiffening of her neck and silence.

She let him look, sure that he wouldn’t see,

Blind creature; and awhile he didn’t see.

But at last he murmured, ‘Oh,’ and again, ‘Oh.’


‘What is it—what?’ she said.


‘Just that I see.’


‘You don’t,’ she challenged. ‘Tell me what it is.”



Robert Frost– poet – 1874- 1963



In recent months I have been somewhat obsessed by the excellent debates and interviews put on by the ‘Spectator’ with the irrepressible Andrew Neil as inquisitor par excellence! Andrew, when it comes to political knowledge and savvy, he has no peer in the realm. The Spectator’s guest of honour was the former Chancellor of the Exchequer, George Osborne, who held the position for 6 years.  He has been a really influential and caustic editor of the Evening Standard for the last 6 months – a newspaper that grows in stature with its relentless Anti-BREXIT stance.  London voted to remain 70%-30%, so it is not that surprising that it’s leading paper should be very supportive.  Sometimes I think the editorial stance is shade vitriolic and unbalanced in its stance, but with a passionate editor it is totally understandable that the paper steadfast in its editor’s belief.


I thought George Osborne was one of the best Chancellors this country has had for decades. It is also generally known that he was against any referendum but promised to support PM Cameron. Unfortunately Mr Cameron came back from Brussels with nothing and the REMAIN Campaign was as bad as the BREXIT campaign.  Neither camp came out of the campaign with much in the way of credit. However the establishment was out of favour and the rest was history. Mr Osborne, as the captain of the Good Ship ‘Project Fear’ gave a truly dreadful account of himself.  No one in the audience asked him why?


The subject was ‘10 years after the financial crisis, what does the future hold?’ George was gracious towards both Gordon Brown and Alasdair Darling, not really holding them culpable for the crisis. What Mr Osborne did not point out was the fact that the banking crisis in the UK had little to do with sub-prime lending, as it did in the US, apart from RBS and more to do with light regulation and poor credit analysis. Osborne felt that it was a mistake that banking regulation had not been under the control of the Bank of England. We never found out why no senior banking executives were never brought to book, apart from lower grade managers.  Maybe proving the difference between fraud and incompetence was a bridge too far. We did discover that he sacked RBS CEO Stephen Hester, because he did not agree to split the UK’S largest bank from a good and a bad bank. In really difficult times the success of RBS’S Treasury and trading operation mitigated about £9 billion of losses.  That is a pretty good reason to me for not wanting to split it.


George Osborne was lucid all evening, explaining complex issues concisely and with panache.  He is clearly very fearful about BREXIT and the immediate future of the Conservative party. He refused to be drawn on Theresa May’s premiership. However he made one salient point.  He said Conservatives were only effective with the electorate, when confident and bulging with policies that were attractive to the young. The way the Tories were so horribly split now, he had difficulty believing in the party faithful’s ability to win marginal seats, with Corbyn now ‘under a wet sail’, with attractive promises to the young, despite the fact he is unlikely to be able to deliver them with financial probity. 


A return to politics for George Osborne? Maybe in a decade.  He’s having too much fun for now.  However he still loves courting controversy with his wooden spoon close at hand, recently seen dining with Philip Hammond in Caraffini’s.  I don’t suppose subverting BREXIT was on their agenda for discussion for one second! Perish the thought!  In closing, it is fair to say George Osborne was batting at home on a very placid wicket with no green grass that was playing very true.  His ‘REMAIN’ fans had gathered in their hundreds in Cadogan Hall and he had no awkward balls to fend off apart from his huge salary at Blackrock, which, as a private citizen, he is more than entitled to!



This coming week is the 30th anniversary of Black Monday – 19th October 1987. Greenspan had only recently been appointed chairman of the FED. There were a host of reasons that precipitated the global equity sell-off, which included programme tradingover-valuationilliquidity and market psychology. By the end of October, stock markets in Hong Kong, Australia, Spain, the United Kingdom, the United States and Canada had fallen 45.5%, 41.8%, 31%, 26.45%, 22.68% and 22.5% respectively. Though October is often a notoriously bad month, with 1987, 1993, 2000 and 2008 the most obvious examples, it seems unlikely that we will have any repetition this month.  New York’s three main indices are breached record levels recently, despite fearful geo-political threats and London’s FTSE 100 reached that goal on Thursday – 7553. Unless there is a strong indications that there will be several interest rate increases in the pipeline, equities, whose valuations already look very rich, may well flat-line providing this current earning season does not disappoint.  Dividends look to remain satisfactory.  Also the $10 billion monthly tapering of QE in the US seems fairly benign. However, apart from Tokyo’s Nikkei, which gained 2.217%, other global gains on the week were pretty marginal – S&P 500 +0.17%, FTSE 100 +0.17% and European bourses by an average +0.42%. Even the reaction to the IBEX in Spain throughout the Catalonia Referendum was relatively insignificant.


Despite the total lack of volatility in markets, it was nonetheless an interesting week. The IMF was upbeat about world growth but downbeat about the UK’S prospects and the lack of progress in BREXIT negotiations. In passing I have never thought that Mme Christine Lagarde has ever had much regard or respect for the UK: so let’s skate over the IMF’S deliberations. The quality of their economic prognosis in the past has been lamentable. Observers will surely have been concerned at the lack of any real rampant inflation for the FED to put rates anything more than once in December. It looks as though Philip Hammond will not have any goodies in his 22nd November budget, with growth dipping resulting in receipts coming in short of expectation. The Chancellor also seems determined to play BREXIT as a subtle ‘REMAINER!’ – A dangerous game with many Tory backbencher baying for ‘HARD BREXIT BLOOD!’ The Pound bounced around like a cork in a bath, based on the perceived vulnerability of PM May’s tenure at No: 10. At the end of the week it bounced from a low of $1.3150 to $1.3275. Oil bounced by 2.8% on the week. 


Last Thursday saw the start of the 3rd quarter earnings season on the Street of Dreams, with JP Morgan Chase’s efforts falling short of expectations from investment banking but overall they beat forecasts. Shareholders will have been pleased with Citigroup’s continued improvement, also posted on Thursday. On Friday it was the turn of Wells Fargo and Bank of America Merrill. Wells Fargo saw third-quarter profits tumbled by 18% because it set aside $1 billion for legal expenses (shares down 2.75%).   BOA (shares +1.49%) posted increased earnings per share up 17% to $0.48.  Revenue was up 1% to $22.08 billion, just beating forecasts for $21.981 billion. Again income from trading was disappointing.  It should not be forgotten that these overall results were expected to be good – hence the overall 10% increase in share valuations for most banks in the last month. 


Back here in Old Blighty it was all about retail and banking.  WH Smith posted lower sales on the high street but excellent returns from airports and outlets. Dunelm and Quiz posted stellar efforts. Sky’s trading statement in isolation was decent but no update from Culture Secretary Karen Bradley on 21st Century’s bid for the remaining 61%.  James Murdoch was re-elected as chairman – JUST!  There must have been fierce lobbying from jealous media peers and material shareholders. HSBC appointed John Flint to succeed Stuart Gulliver as CEO in the New Year. I doubt we have heard the last of Lloyds’s unfortunate purchase of HBOS and the mistakes incurred.  Also Treasury Select Committee’s chairman, Nicky Morgan, has insisted that the FCA’s Andrew Bailey the CEO provide more clarity on the RBS’S report into its now defunct Global Restructuring Group (GRG), which is accused of having “artificially distressed” otherwise viable firms. Finally has Provident Financial started its road to recovery? Though a new CEO has yet to be announced the shares bounced 12.2%, though fair to say that it has lost 80% of its value.


UK companies posting results this week – Tuesday – Pearson, Merlin Entertainment, Moneysupermarket, Wednesday – Reckitt Benckiser, Hochschild Mining, Thursday – Rank, Schroders, Genel, Segro, Friday – Acacia Mining, Dechra Pharmaceuticals


US companies posting interim results this week – Monday – CSX group, Tuesday – Morgan Stanley, Goldman Sachs, Omnicom, Harley-Davidson, UnitedHealth, Wednesday – Abbotts Labs, eBay, American Express, Thursday – Philip Morris, Bank of New York Mellon, PayPal, Friday – Citizens Bank, Procter & Gamble, Schlumberger, General Electric


 David Buik

Market Commentator – Panmure Gordon & Co

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Like millions of other people seeing Messrs Davis & Barnier treading water over these EU negotiations, I am suffering from a massive dose of the pip! I am sick to death with their intransigence. No more platitudes! PLEASE! That the ball is in the UK’s court is of little consequence. It takes two to tango, so if the EU does not want to negotiate, please stop wasting peoplestime and tell David Davis accordingly. The uncertainty is damaging. Whilst the EU faffs around playing mind-games and metaphorical spoof, it is messing not only with the UK’s economy but also your very own EU, though your arrogance won’t allow you to acknowledge that fact.


Certainly the foreign exchange market agrees with me. Cable has drifted from $1.3250 to $1.3149 with €/£ hitting 0.90123 for the first time almost since Noah left the Ark. The FTSE 100 is up 19 points at 7553 at 2.45pm. Obviously Dollar related stocks such as Reckitt Benckiser, Glaxo and Astra Zeneca plus the tobaccos know which side their bread is buttered on and have pushed on. Utilities have had a better day with Centrica, fresh from being ex-div, is up 3%. Oils were better but are now flat.


Of those companies that reported – SKY is unchanged and James Murdoch, after a bit of a struggle was re-elected chairman and so he should have been. There must have been some serious lobbying by its peers from the written media and TV to shareholders and the government for the result to have been relatively close. Booker, due to fall in to Tesco’s scratcher, was also unchanged. HAYS was +0.5% and N BROWN was the biggest laggard from the FTSE 100 – -4%. WH SMITH despite, falling sales, which was countered with good housekeeping were unchanged.


On the Street of Dreams the DOW was down 30 points. JP Morgan missed in terms of trading revenue but beat expectations overall and after early salvos was flat. Citigroup beat expectation with EPS at $1.42 against estimations of $1.32.