WEEKLY FAYRE – Monday 25th June 2018
I remember, I remember,
The house where I was born,
The little window where the sun
Came peeping in at morn;
He never came a wink too soon,
Nor brought too long a day,
But now, I often wish the night
Had borne my breath away!
I remember, I remember,
The roses, red and white,
The vi’lets, and the lily-cups,
Those flowers made of light!
The lilacs where the robin built,
And where my brother set
The laburnum on his birthday,—
The tree is living yet!
I remember, I remember,
Where I was used to swing,
And thought the air must rush as fresh
To swallows on the wing;
My spirit flew in feathers then,
That is so heavy now,
And summer pools could hardly cool
The fever on my brow!
I remember, I remember,
The fir trees dark and high;
I used to think their slender tops
Were close against the sky:
It was a childish ignorance,
But now ’tis little joy
To know I’m farther off from heav’n
Than when I was a boy.
Thomas Hood – poet – 1799-1845
Isn’t it amazing how in a period of two weeks the fortunes and the form of a sporting team can be turned on its head. Such has been the case of the England ODI cricket team. Vanquished on merit at the Grange cricket Club against unfancied Scotland two weeks ago, Eoin Morgan’s mob have bounced back with a vengeance, taking the recent ODI series 5-0 against Australia, admittedly a very depleted side. Nonetheless, the clinical manner they have beaten the boys from ‘Down Under’ has been nothing less than emphatic. Trent Bridge saw the ODI single innings record smashed by England in making 481 for 6. There has been some great batting by Buttler, Roy, Bairstow, and Hales with the odd delightful cameo effort from Skipper Morgan; the batting proving to be cornerstone of their success.
The highlight of a memorable Royal Ascot was witnessing Sir Michael Stoute eclipsing Sir Henry Cecil’s record of 75 winners at the Royal Meeting. He ended the 5-day racing epic with 3 winners taking his tally to 78. Surely there has never been a greater English trainer of older middle distant thoroughbreds?
Until yesterday afternoon, when England trounced Panama 6-1 in a thoroughly clinical manner, despite some ‘strong-armed’ tactics adopted by the South American debutantes, I was making rather heavy weather of getting in to a positive World Cup mood or frenzy. Yes, there was merit in the 3-3 draw between Spain and Portugal, England’s 2-1 win against Tunisia and Germany getting out of jail with Kroos’s later winner against Sweden. However, many of the games have been dull affairs. There is, of course, so much at stake; hence some very boring negative defensive tactics adopted by so many countries – not very pleasing on the eye and for good measure many football ‘purists’ are singularly under-whelmed by the occasionally flawed use of VAR. But now that England have progressed to the knock-out stage, expectations are running high, as all England fans tingle with excitement.
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| S&P 500
The same old problem that has dogged markets since time immemorial returned to the agenda last week – UNCERTAINTY – and it returned in spades. Looking at the table above, it does not quite reflect, firstly the very negative level of sentiment that prevailed in the first part of the week, nor the level of volatility. Some of the global indices had quite a strong run on the rails on Friday, particularly the FTSE 100 which benefitted from a rally in oil and the subsequent surge in energy stocks such as BP and Shell and in Europe – ENI and Total – most of whom rallied by an average of 3%. Brent rose by 5.7% on Friday, triggered by the OPEC meeting, when members struck a deal to increase production.
Early last week the retaliatory trade tariffs imposed by the EU to add to those involving the original Sino-US trade spat took their toll on market confidence. European bourses suffered and only on Friday did the Dow Jones break an 8-day losing streak. The FTSE 100 was the only main global index to finish the week with its head marginally above the Plimsoll line. As the new Italian Government starts winding itself up in to action with a few controversial policies, with immigration to the fore, there was some unexpected but welcome good news over its ailing banking sector. BPER Banca rallied by 7% on confirmation that Unipol had agreed to increase its stake to almost 20%. By some extraordinary reason Greek 10-year bond yields fell by about 25 basis points thanks to an agreed debt relief plan to 4.08%.
It is no coincident that Airbus’s Tom Williams, fired another salvo at the UK Government by threatening to take business away from its 25 units in the UK which employs about 14,000 people, unless there is immediate clarity over the customs union and the single market. Of course, Airbus is state-controlled (30% owned by Germany, France and Spain and currently far from our best mates). I do take this threat seriously as the UK Government has provided little clarity and needs to do so before too long. However, there is more than a touch of jingoism in this threat as it will not be easy to up sticks in Bristol and in other specialised areas, without seriously damaging the business. Boeing must be licking its chops at the prospect of this folly. This is a very clever ploy by Airbus in fuelling UK media, which in many influential places will just love to fan the flames of fear. It appears that BMW has used Airbus’s intervention to jump on the bandwagon warning about the future of its Goodwood operation amongst other UK interests. It is as well to note that the CBI, BCC, Institute of Directors and the Federation of Small Businesses have rounded on the Government over its inept handling of BREXIT. Inadequate progress has been made and with the clock ticking it is not surprising that these influential trade associations want to bring their influence to bear in the wake of many companies threatening to withdraw investment.
On Thursday the MPC voted 6-3 in favour of no change in base rate with BOE Chief Economist Andy Haldane surprisingly voting in favour of a change with McCaffrey and Saunders. The likelihood of an August rate hike moved up from a 40% to 55% chance, according to Panmure Gordon’s Chief Economist, Simon French. He believes that the next round of consumer borrowing, retail & Index of Services data are key for whether this marks an inflection for Gilt yields & GBP/USD, or blip in a downward pattern. He also observes that data-agnostic points for BoE watchers. McCafferty’s last MPC vote is in August with the Brexit negotiation process heading for a fractious Q4, which could favour an August move over November one. An MPC quorum may conclude that the window to start gradual normalisation path could close quickly later in 2018.
It looks as though the House of Fraser has agreed terms with its bankers and financial advisors to keep the operation going, but it also means that 31 out of its 59 stores will close including its Oxford Street flagship store, resulting in significant redundancies.
We hear very little about the financial machinations of famous private companies, but last week luxury fashion house Chanel bucked that trend by revealing its profit figures for the first time. This international fashion brand luminary, famous for its perfumes, jackets, ties and handbags posted profits $1.79bn (£1.35bn) last year, up 18% on the year before, on sales up 11% at almost $10bn. Chanel decided to unveil these figures to show the strength of its balance sheet. Its main rivals include Louis Vuitton owner LVMH and Hermes – both all listed on the stock market. Chanel’s chief financial officer, Philippe Blondiaux, made it clear it had no ambition or intention of seeking a public quotation.
Finally, CityAM tells us gratifying and encouraging news that German asset managers call for ‘unhindered access’ to City post-Brexit.
UK companies posting results this week – Tuesday – Northgate, HIS Markit, Carpetright, Petrofac, Carnival – Wednesday – Whitbread, LionTrust Asset Management, Bunzl – Thursday – Tullow Oil, Greene King, Stagecoach, Wood Group, Friday – Serco
US companies posting results this week – Tuesday – Lennar, Sonic, Wednesday – General Mills, HB Fuller, Bed, Bath & Beyond, Thursday – Walgreen, Boots Alliance, ConAgra Brands, KB Homes, Friday – Constellation Brands
Economic data posted this week – Monday – US New Home Sales, Tuesday – UK Housing loans – Wednesday – US Durable Goods & Pending Home Sales, Thursday – US 1st quarter final GDP forecast, Friday – UK Gfk Consumer Confidence, UK GDP 1st Quarter estimate, UK Lending data
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