THE WEEK’S FAYRE– Sunday 28th January 2018
Clownlike, happiest on your hands,
Feet to the stars, and moon-skulled,
Gilled like a fish. A common-sense
Thumbs-down on the dodo’s mode.
Wrapped up in yourself like a spool,
Trawling your dark as owls do.
Mute as a turnip from the Fourth
Of July to All Fools’ Day,
O high-riser, my little loaf.
Vague as fog and looked for like mail.
Farther off than Australia.
Bent-backed Atlas, our traveled prawn.
Snug as a bud and at home
Like a sprat in a pickle jug.
A creel of eels, all ripples.
Jumpy as a Mexican bean.
Right, like a well-done sum.
A clean slate, with your own face on.”
Sylvia Plath – poet – 1932-1963
Last Monday morning at 11.00am at the Electric Cinema in Notting Hill Gate was a new experience for me. The only people allowed in to the cinema for showing of the much-heralded film ‘Post’ had to be the guest of a baby under one year old. This film is about the Washington Post’s obsessive endeavours to have the Pentagon Papers on the Vietnam War released to the public. The Post was hell-bent on exposing the White House for keeping the public in the dark on the futility of the Vietnam War. A procession of Presidents from Eisenhower to Kennedy to Johnson and finally to Nixon had been guilty of this cover-up. The spell-binding episode certainly shifted American journalism’s relationship to Government power. Tom Hanks as the editor and Meryl Streep as the owner of the ‘Post’ gave their usual high-class polished performances in this dramatic story. This film was really a precursor to what happened when the Post’s two top investigative journalists, Bob Woodward and Carl Bernstein exposed the skulduggery of Richard Nixon’s administration in Watergate ‘cover-up’ in 1972. I have to confess I was extremely grateful for the sub-titles to this film as the cacophony of screaming and crying made it impossible for the ‘yummy mummies’ and the grandparents to hear the dialogue!
Though President Trump would probably not be my number one choice to my dinner table on Saturday night – well maybe, out of novelty value, he might! Nonetheless he certainly put his points of views across very succinctly in Davos and the delegates’ interest in him was all-consuming! Just look at the crowds that queued to watch his entry and to hear his speech. ‘America will always be first but engaging with the rest of the free world.’ It went down better than most could ever have believed. PM May seems to be back in the President’s good books with encouraging noises being made about trade. However PM May was very low-key in Davos. She is right to be so. No point updating the world on BREXIT when there is nothing to say. Macron’s brilliant superficial Gallic charm was there for all to see as he weaved his spider’s web around many gullible international CEOS from around the world to set down their stalls in Paris at London’s cost. French labour laws are penal. Not everyone speaks French and speaking on London’s behalf 70 years of infrastructure is unlikely to be chucked out of the window, on a whim that Paris and Frankfurt might be fun places to work. Shifting thousands of jobs is expensive and the damage to a business by moving reluctant employees could be irrevocable.
Though Davos grabbed most of the major headlines last week there was still much to ponder, ruminate and react to from the world of business, economics and politics. Firstly the IMF couldn’t resist having its annual ‘pop’ against the UK downgrading its growth for 2018 to 1.5% from 1.6%, whilst at the same time raising most other countries, apart from South Africa, and the world’s GDP to nearly 4%. Ever since the IMF bailed out the UK in 1975/6 for a record £3.9 billion, it has had a problem with the UK and its prognosis for its economy over 40 years has very often been wrong. I think it will be this year as the annual rate looks nearer 1.8%, as posted on Thursday, which in fairness was at its lowest level since 2012. Unemployment in the UK also continued to fall by approximately 100k in the last quarter (rate 4.2%). However as Panmure Gordon’s Simon French points out “Private sector wages falling steadily for a decade – now £100/week below 2006 levels.” In regards to the UK’s PSBR, Mr French says “Even allowing for £1.2bn repayment from EU the December the numbers are encouraging – down to £2.6bn in December. Chimes with his view that the UK economy (ex-London-specific challenges) is doing rather well!”
Growth for the US came in at a disappointing level of 2.3%, somewhat below Trump’s vision of 3%, but the outlook is very positive. The fall in the Dollar against the Euro (-16.5%) since August 2017 and 17% against the Pound since March 2017 may have helped US trade according to Treasury Secretary Steve Mnuchin. Next week the FOMC meets. No change is expected though two small increase are expected in 2018. The month of January has been great news for US markets. The DOW has rallied by 7.5% in the last month to a record level of 26616, the S&P by 6.8% to 2872 and the NASDAQ by 7.9% – much of the euphoria is due to the tax cuts! Conversely the FTSE 100 only added 0.6% in the same period – its comparatively sluggish performance was down to the strength of Sterling. The US earnings season last week did well with Netflix acting as the standard bearer, but there were also good numbers from Johnson & Johnson, General Dynamics, Caterpillar, Raytheon, Intel and Honeywell amongst others. Trump’s tax cuts looks like good news for bank employees with the likes of Walt Disney also likely to spread its largesse around.
Here in Old Blighty the demise of Carillion took up so much air and press time. However the news that Sky news could go as a result of the Government’s culture department dragging its feet over 21st Century’s bid for the remaining 61% of Sky, was sad. I suspect that if Bob Eisner is successful with Disney’s bid for 21st Century, Sky could be superfluous to requirement. Tesco and Sainsbury could be laying off some staff in the months to come, as Lidl and Aldi dig in to their market share. Melrose’s hostile bid for GKN will come under closer Government scrutiny as it appears security issues may be of some concern. Having zapped ARM Holdings for £24 billion, Softbank now has its beady eyes taking on PayPal in its backyard. It is likely to be funded from Sofbank’s $100 billion vision fund. This week is another hugely important earnings week in the US, with Facebook, Apple, Amazon and Microsoft to the fore. Results from Unilever, BT, Astra and Royal Dutch Shell will be significant.
UK Companies posting results this week – Tuesday – CYBG, PZ Cussons, Domino Pizza, Filtronic, Wednesday – SSE Group, Dairy Crest, Britvic, Angle, Wizz Air, Thursday – Royal Dutch Shell, Unilever, RPC Group, 3is, Cranswick, Vodafone, Euromoney, Rank, AG Barr, Glencore, Friday – Astra Zeneca, BT, AON
US companies posting results this week – Monday – Rambus, Lockheed Martin, Tuesday – Aetna, Zimmer, HCA Healthcare, Pfizer, Harley-Davidson, Corning, AMD, Wednesday – DR Horton, Spire, Eli Lily, Boeing, Pitney Bowes, PayPal, eBay, Qualcomm, Facebook, Metlife, Mondolez, Microsoft, Thursday – MasterCard, Altria, Time Warner, Hershey, Conoco-Phillips, Amgen, Motorola Solutions, Apple, Alphabet, Amazon, Visa, Mattel, Friday – Ester Lauder, Exxon Mobil, Chevron, Johnson Outdoors
Economic data posted this week – Monday – US personal spending, Tuesday – UK Mortgage approvals and consumer Credit, US Consumer Confidence, Wednesday – FOMC Meeting, Gfk Consumer Confidence, US ADP index, Thursday – US Construction Spending, US & UK PMI Manufacturing, Friday – UK PMI Construction