“On Waterloo Bridge, where we said our goodbyes,
the weather conditions bring tears to my eyes.
I wipe them away with a black woolly glove
And try not to notice I’ve fallen in love.

On Waterloo Bridge I am trying to think:
This is nothing, you’re high on the charm and the drink.
But the juke-box inside me is playing a song
That says something different. And when was it wrong?

On Waterloo Bridge with the wind in my hair
I am tempted to skip. You’re a fool. I don’t care.
the head does its best but the heart is the boss —
I admit it before I am halfway across.”


Wendy Cope – poet – 1945 –


One of life’s great privileges is to be invited to Glyndebourne to not only experience opera of the very highest quality, but also to witness the great beauty and ambiance of the setting and the occasion. Such was my luck in being invited by dear friends to see a wonderful production of ‘Madama Butterfly’ last Thursday. This opera has a dramatic ending and I doubt there was a dry eye in the house. Glyndebourne is uniquely British and is cherished by all patrons of this fantastic occasion, despite having to dodge torrential downpours last week!  I am still purring with contentment like a ‘Cheshire Cat’!


“Forever Together” really got herself together, having negotiated Tattenham Corner in softish ground before pulling away from “Wild Illusion” with a bit to spare, to win the Oaks at Epsom on Friday, yet again another huge triumph for the O’Brien family. However, the Derby on Saturday produced a shock result, with the odds-on favourite at 4/5, ‘Saxon Warrior’ running no kind of a race. Godolphin’s ‘Masar’ gave Charlie Appleby his first Derby win at 20/1, with a fair bit left in the tank.





Another astonishing % gain/loss

FTSE 100
















S&P 500*








Hang Seng








Shanghai Comp





  • Denotes from 25/5/18


Brexiteers like me are not cackling away like hyenas, in response to the political and almost certainly subsequent financial distress, which is likely to be suffered in Italy and to a lesser degree in Spain. These are harrowing times for Italy with the ‘populous’ being told by their autocratic President Mattarella that democracy matters little to him if the coalition of ‘Five Star’ and ‘League’ want an anti-EU finance minister. So, a compromise candidate had to be found by the original nomination to be PM, Giuseppe Conte and consequently the heat is temporarily out of Italy’s kitchen, though another election before too long cannot be ruled out. The FTSE MIB had lost 14% in value from 15th May 2018 until last Wednesday, where it made a 2% recovery and 10-year bond yields rose like grilse from 1.90% to 3.10% before settling back to 2.67% on Friday. Italian banks have also been beaten up. They have recovered a little poise but are far from out of the woods. Spain’s Rajoy has been replaced as PM by Pedro Sanchez, thanks to corruption allegations, but there are number of imponderables, which will test Senor Sanchez’s resolve in the months to come.


All this political uncertainty, which started with Greece in 2010 followed up by the UK’s decision to leave the EU in 2016, with Italy showing its displeasure at the status quo and Spain at ‘sixes and sevens’ over independence for Catalan should have given the EU a sufficiently strong message that all was not well with many of its members. Had the EU been more accommodative towards members issues and problems with a touch less arrogance and intransigence and particularly by taking its foot off the ‘federalism’ accelerator, perhaps Europe would not be in this unholy mess! If this ‘Italia job’ goes pear-shaped, the devastating domino effect it will have on the European banks and the EU’S economy does not bear thinking about. The threat of the EU becoming a ‘busted flush’ looks more realistic as the months role by.


Let’s hope that this protectionist trade war adopted by the US does not see the EU over-react. Trump is misguided if he does not think protectionism is dangerous for the US consumer in the long-term.  This prickly issue requires diplomacy and I have my doubts if Messrs Merkel and Macron are up to the job in hand.  I am ever the ‘Walter Mitty’ in hoping that the EU will see sense over trade negotiations with the US and excessive reprisals towards their allies and learn from all these global trade problems, but I have my doubts.


Last week again saw most global indices finish in negative territory apart the S&P and the NASDAQ, which added 1.5% on Friday thanks to a very strong Non-farm payroll number, which saw 223k jobs created in May 2018 triggering gains in heavyweight tech companies such as Apple, Microsoft and Alphabet. Average hourly wages increased 0.3 percent, both topping economist estimates. The unemployment rate fell to an 18-year low of 3.8 percent. This data has all the hallmarks of a rate hike at the next FOMC meeting.

Here in Old Blighty, though the reconfirmation of 1st quarter GDP at 0.1% was disappointing, news that Gfk’s Consumer Confidence and unsecured borrowing bounced back in April helped to keep the loss on the FTSE 100 for last week at a bare minimum. Grocery sales, courtesy of the Royal Wedding had also popped; So, there was some good news about though the lack of progress in the BREXIT negotiations is cause for concern. The FCA’S managing director Andrew Bailey made it clear that limits and caps on high cost credit and overdrafts would be implemented after further investigation. De La Rue posted a profit warning, as did Card Factory and First Group’s CEO Tim O’Toole was shown the door after an inadequate performance.  RBS’S FD Ewen Stevenson served notice to leave the bank at a critical moment in its recovery process, prior to any sale of equity back to the public.  The bank had previously announced the closure of 162 branches. It look as though it will be ‘For Whom the Bell Tolls’ for House of Fraser unless it can pull the proverbial financial rabbit out of the hat in dealing with its banking covenants.

Deutsche Bank’s new chief executive officer, Christian Sewing, suffered a fresh setback in his efforts to reinvigorate Europe’s largest investment bank as S&P Global Ratings cut the lender’s credit rating. However, the bank’s share price rebounded on confirmation from S&P confirmed that it has good capital and liquidity buffers. TSB will also be gathering some unfavourable headlines as Paul Pester comes under scrutiny next week for inadequate stewarding over the IT crisis which has dragged on. The inability of the government to deliver another runway at Heathrow quickly may see the project hijacked by the airlines in attempt to stop the cost spiralling to more than £20 billion. CYBG have upped their bid for Virgin Money valuing the joint operation at £4 billion, giving this fresh operation greater market penetration with 6.1 million customers.

Save the best until last? - Not Sure! However, one must admire the stoicism and relentless drive of Sir Martin Sorrell, who is set to rise like the ‘phoenix from the ashes’ by starting another advertising empire to challenge WPP. I suppose revenge is best served up cold. I am gobsmacked that WPP Chairman Roberto Quarta did not tie Sir Martin up with a non-compete agreement for at least a year after he left.

UK companies posting results this week –  Tuesday – AO World, Johnston Press, Wednesday – WH Smith, RPC Group, Workspace, Thursday – CMC Markets, Auto Trader, Mitie


US companies posting results this week – Monday – Dell Technologies, Wednesday – Brown Forman, Thursday – Vail Resorts. Broadcom


Economic data posted this week – Monday - UK PMI Construction, US Factory Orders, US Durable Goods, Tuesday - UK & US PMI Services, US ISM Non-manufacturing, UK New Car Registrations, Wednesday – US Trade Balance, Thursday – Halifax House Prices, US Consumer Credit, EU 1st quarter GDP Estimates, Friday – BOE Inflation expectations survey


David Buik  

Core Spreads

Core Spreads is financial trading as it should be. No noise – just tight spreads on thousands of markets.

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