TODAY’S FAYRE – Wednesday, 6th December 2017

 

The anguish of the earth absolves our eyes

Till beauty shines in all that we can see.

War is our scourge; yet war has made us wise,

And, fighting for our freedom, we are free.

 

Horror of wounds and anger at the foe,

And loss of things desired; all these must pass.

We are the happy legion, for we know

Time’s but a golden wind that shakes the grass.

 

There was an hour when we were loth to part

From life we longed to share no less than others.

Now, having claimed this heritage of heart,

What need we more, my comrades and my brothers?

 

Siegfried Sassoon – poet & soldier – 1886-1967

 

 

Most of you who have time to read this trivial column won’t remember Christine Keeler or Mandy Rice-Davies, who died in 2014, having eventually enjoyed a really high-flying life, which included 3 marriages and many appearances in television and TV dramas. Christine and Mandy, through their relationship with Stephen Ward, the society osteopath, were introduced to the Cliveden set – John Profumo, Lord Astor and even the odd Russian diplomat Ivanov. At the time John Profumo, then Minister of War is alleged to have had an affair with Miss Keeler. He lied to the House of Commons, which in truth probably put Harold Macmillan’s Premiership to the sword. That scandal back in 1963 was unprecedented. Stephen Ward wilted under pressure and committed suicide.

 

Miss Keeler died yesterday aged 75, having probably led a very sad and lonely life. In her hay-day she was stunningly beautiful, but probably attempted to punch above her weight socially. She seemed nothing like as vivacious or ebullient as Mandy R-D. I often used to see her wandering around Camden Town and Regent’s Park on her own for many years after the scandal. Conversely John Profumo worked tirelessly for charity at the Toynbee Centre in Canning Town and lived his life quietly with the full support and devotion of his gracefully charming wife Valerie Hobson, the actress.

 

Miss Keeler was defended by the celebrated and distinguished barrister Jeremy Hutchinson, who died aged 102 last month. In his book he referred to the first meeting he had with Miss Keeler in Chambers, he noticed that all his colleagues had their doors open as she walked down to corridor to his rooms – such was the world’s fascination at that time with this femme-fatale!

 

The Street of Dreams seemed to have a ‘monkey on its back’ yesterday. Perhaps the euphoria over tax cuts was beginning to wear off and investors started to look at the realities of life, such as these indices are starting to look very fully valued and too rich for some peoples’ blood – hence some risk has been taken off the table. The US economy is doing well but, it’s not that groovy. Sustaining profit levels to justify current P/E ratios of S&P 22.5 X and NASDAQ at 42.4X may prove a bridge too far in 2018. Turnover was in line with 20-day moving average at circa 7 billion shares with the VIX down a smidgen. There were few bright sparks – just coal and software. Department stores, gold and telecoms were under-performers. The DOJ told AT&T and Time Warner that their $85 billion deal must remain in the in-tray. However there may well be more substance to 21st Century Fox selling assets to Walt Disney than was apparent before. There is a swirling momentum of opinion that believes Disney will lighten up 21st portfolio and take National Geographical, Star in Asia, regional sports network, movie and TV studios and its stake in Sky, less the news. It looks as though Comcast is currently out of the picture as a potential competing predator. Sky shares have quietly drifted up in the last week by 5% to 973p.

 

London had a rather nebulous session with its main index losing a mere bagatelle – 11 points to 7327. It was like pulling teeth with little corporate news. Investors and analysts alike were levitating 2 inches above the carpet wondering if Messrs May and Davis could dig themselves out of the quagmire over the EU negotiations and particularly the impasse with DUP over borders.

 

Asia has made great gains this year – Hang Seng +29% and the NIKKEI +16%. So the region required little in the way of encouragement to lower the flags of many key sectors especially tech, especially as the Dollar was showing signs of weakness. The Nikkei closed down 2% today with the ASX easier by 0.5%. Heading to the close the Hang Seng took a bit of a larruping down 2.1% and Shanghai was just o.3% lower.

 

This morning there was a slew of earnings from some smaller but interesting companies. Carillion was interesting by its absence. We thought, obviously erroneously so, that they had points to make today. Numis continues to excel as the premier stockbroker and investment bank for SMES – up 2% today. Stagecoach helped to lighten the gloom adding 4% – London’s main index down by 25 at present (9.07am) with buyers lurking in the wings for bargains. Cineworld completed its acquisition of Regal Entertainment which has 9542 screens in 10 countries. Cineworld required a rights issue of £1.7 billion to complete the transaction. Some fund managers are less than convinced that savings of $100 million can be made annually after the merger. Shares have fallen 17% since the announcement of the deal.

In closing it is interesting to note that the delay in distributing Apples iPhone X has seen its sales in the US of iphones drop from 40.6% to 32.9%, with the Google Android appearing to be the beneficiary. But the interesting news yesterday was the fact that the change in the tax laws could see Apple benefit to the tune of $47 billion. It will be worth Apple repatriating its overseas funds, which are alleged to total $252 billion back to the US as the rate of tax on these monies may drop from 35% to 14.5%. It is thought that US corporations hold $1.3 trillion off-shore.

 

UK Companies posting numbers this week –  Wednesday – RWS, Mulberry, Carillion, Stagecoach Numis Securities, Thursday – DS Smith, Capita, HSS Hire, Friday – Berkeley Group

 

US companies posting interim results this week – Wednesday – Brown-Forman, H&R Block, Fred’s, Korn/Ferry, Thursday – Vail Resorts, Dollar General, Ciena, Friday – Johnson Outdoors

 

Economic data due this coming week – Wednesday – US Mortgage applications, Thursday – US Consumer Credit, Friday – UK industrial production & Construction output, UK trade balance, NIESR GDP, 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 ​

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