18 January


18 January

Good morning,

“And the award for most bizarre White House political stunt goes to…”
Well, just take your pick, but I think an offering from President Trump last night could be the eleventh hour dark horse.
Taking to his preferred medium of Twitter, and later published on the Republican Party website which consequently crashed due to heavy traffic, the president unveiled the  “The Highly-Anticipated 2017 Fake News Awards”.  In the list, Trump announces the "winners” which ranged from minor errors by journalists on social media to news reports which contained details that may have painted his administration in a poor light and were later corrected.
And really, ‘the judges’ (though I get the feeling the panel wasn’t too extensive) had lots to choose from. News broadcaster CNN walked away with four awards for allegations of collusion between Russia and the Trump campaign, whilst “The FAILING New York Times” and “FAKE NEWS WaPo” [Washington Post] all received special mentions.
A personal takeaway was the entry at number 6 – the president’s claim that “CNN FALSELY edited a video to make it appear President Trump defiantly overfed fish during a visit with the Japanese prime minister. Japanese prime minister actually led the way with the feeding”. If you’re unsure how one might ‘defiantly overfeed fish’, the Republican website helpfully carries an animation as an instruction.
Joking aside, that the awards are difficult to take seriously should worry us. When blatant, even falsified, attacks on America’s press freedoms are laughed off as another bizarre utterance in this most bizarre of presidencies, even the most ardent populist should take pause for thought.


North and South Korea have agreed to field a joint team in the upcoming Winter Olympics in Pyeongchang. Following three days of talks in the border village of Panmunjom, the countries will field a joint women’s ice hockey team and will march under a pro-unification flag in what they have labelled the ‘peace games’ – the clearest sign yet of a thaw in tensions between the two countries.
Emmanuel Macron will demand that Britain pay a fairer share on its Calais border security commitments as Theresa May announces an extra £44.5 million investment in border security improvements.  Under a continuation of the 2003 Le Touquet agreement, the French president will also ask that Britain accept more child migrants and asylum seekers as part of its responsibility to help repair damage to the port’s business.
Public works completed under private finance initiative (PFI) schemes may be costing the taxpayer up to 70% more than standard government borrowing, the National Audit Office has suggested. Just days after the collapse of Carillion, a government partner which undertook the construction of schools and hospitals under PFIs, the NAO report suggests the schemes may have delivered ‘no apparent benefit’ to the public purse since their introduction in 1992. There are currently 716 PFI projects in operation in the UK with a total value of £59.4 billion.


Business & Economy

A Brexit-supporting hedge fund magnate has accused the Bank of England of a “systemic cognitive bias” against Britain’s departure from the EU, warning that its impartiality is in question. Sir Paul Marshall, who is Britain’s tenth wealthiest hedge fund manager in Britain through his company Marshall Wace and contributed £100,000 to the Leave campaign, said the Bank’s pessimistic forecasts were “so far adrift to be embarrassing” and Mark Carney’s departure as governor in June 2019 must mean a reset in policy.
Apple has said it will return hundreds of billions of dollars of overseas investment back to the US following President Trump’s decision to significantly lower corporation tax. In an apparent approval of the measures, the technology giant will invest $30 billion in the US over five years, creating 20,000 jobs. Apple also told employees that it’s issuing stock-based bonuses worth $2,500 each following the tax changes.
GKN rejected a hostile takeover bid of £7.4 billion from Melrose yesterday, claiming the company’s opportunistic approach “fundamentally undervalues the company”. Melrose valued GKN’s shares at 430.1p, claiming that it was time new leadership reversed fortunes at the underperforming automative and aerospace group. Melrose’s offer is the biggest hostile bid for a FTSE 100 company since US group Kraft’s £12 billion purchase of Cadbury in 2009.


What happened yesterday?
The FTSE saw its third straight session of losses yesterday closing down 0.4 per cent or 30.5 points at 7725.43.
The day’s headlines focused on the market’s losers, including publisher Pearson and fashion house Burberry, which saw a 9 per cent slide in its shares following a disappointing earnings updates. Fears of a cash call also hit Provident Financial as analysts questioned whether the doorstep lender could afford to pay potential penalties for mis-selling, closing down 13.1%.
Contracting company Interserve fell around 15 per cent in early trading after the FT reported that British ministers are ‘very worried’ and have set up a team of officials to monitor the company following the collapse of its competitor Carillion on Monday. It later made up its losses to just 0.4 per cent after posting a 2017 financial year performance in line with expectations and a 2018 operating profit ahead of market expectations.
The pound was up on both the greenback by 0.41 per cent at $1.38 and the euro by 0.81 per cent to close at €1.13.

Trading Announcements
Associated British Foods
Bakkavor Group
Chemring Group
Headlam Group
Halfords Group
Royal Mail
Ten Entertainment Group
Workspace Group


Avacta Group
Cardiff Property
Keystone Inv Trust
Equatorial Palm Oil
Standard Life Equity Income Trust
International Economic Announcements
(13.30) Building Permits (US)
(13.30) Continuing Claims (US)
(13.30) Housing Starts (US)
(13.30) Initial Jobless Claims (US)
(16.00) Crude Oil Inventories

Columns of note

Writing for the FT, Edward Luce predicts that despite its wackier moments, the Trump presidency is here to stay – and with a strong case to win again in 2020.Luce argues that Trump has so far survived the unthinkable, still able to caricature the Democrats to sustain popularity with his voter base, whilst the Democrats show little promise of regrouping around a credible alternative soon. Trump is still here, he says, because Republicans – as Americans – want him to be.
Allister Heath comments in the Daily Telegraph that the liquidated Carillion was a dud company and capitalism has merely served its purpose by letting it go bust. But instead of allocating more public funds on commissioning contractors under a socialist model, Heath suggests government should step in to regulate viability and quality of output where the public interest is at stake.

Did you know?

The size of the Greater London electorate means that the Mayor has the fourth-largest personal mandate of any directly-elected politician in Europe, after the President of France, the President of Portugal and the President of the Czech Republic.