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
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
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.
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