'Tis the season for stable earnings and a UK election

01 November 2019

The Noise

  • Its official, Brits are getting an early Christmas present this year; with a general election on the 12th of December. The Tories are currently considerably ahead in the polls, but as we have all learned in recent years, this by no means guarantees their position come Election Day.
  • The announcement of a successor to Mark Carney as governor of the Bank of England has now been postponed until after the election. Chancellor Sajid Javid is understood to have made the decision to preserve the independence of the Bank, during a politically sensitive time. Current front runners for the post include Andrew Bailey, chief executive of the FCA and Minouche Shafik, head of the London School of Economics.
  • Across the pond, the Fed once again snipped interest rates by a quarter of a point, but announced that there would be no further cuts unless we see a material deterioration in the economic strength of the US.

The Numbers



The Nuance

Results season has ground on with very little in the way of either positive or negative surprises, the only real comment to be made on a general basis is that so far, companies seem to be holding up fairly well in what is doubtless a difficult environment.

Global trade disputes have now started to eat into world trade volumes, and show little sign of finding a lasting compromise. The music in the US is a little more upbeat; unemployment numbers continue to look good and inflation remains contained despite extravagant government spending.

As Powel continues to capitulate to market demands for lower interest rates we suspect that this move is insufficient to satiate the White House, which continues to push for rates to be reduced more dramatically. As the re-election battle gets underway it seems doubtless that the FED will be drawn in to the firing line, bringing Jay Powell under further political pressure. Ultimately time will tell if this is a temporary moderation of growth, or a deeper economic adjustment to flush out the wards of QE-infused companies floating on

Quote of the week

 When a unique work of a painting as rare as Cimabue comes to market, you have to be ready for surprises”. Dominique Le Coent, auctioneer
For decades a small religious painting was hung above a hot plate in the house of an elderly woman in northern France. This week that painting, believed by its owner to be little more than an old religious icon, broke a new world record by selling at auction for €24m. Tests revealed it to be the work of Cimabue, a medieval Florentine artist active in the 13th and 14th centuries, often described as the “father” of Western painting. The work was subsequently expected to fetch up to €6m, but managed to reach four times that estimate, ending up in the hands of a pair of anonymous buyers. The owner, now in her 90s, is set to receive the majority of the sum.
Source: www.bbc.co.uk

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