“She gives him his eyes, she found them
Among some rubble, among some beetles

He gives her her skin
He just seemed to pull it down out of the air and lay it over her
She weeps with fearfulness and astonishment

She has found his hands for him, and fitted them freshly at the wrists
They are amazed at themselves, they go feeling all over her

He has assembled her spine, he cleaned each piece carefully
And sets them in perfect order
A superhuman puzzle but he is inspired
She leans back twisting this way and that, using it and laughing
Incredulous

Now she has brought his feet, she is connecting them
So that his whole body lights up”

Ted Hughes – Poet Laureate – 1930-1998

The 23^rd Series – yes! 23^rd – of ‘Silent Witness’ ended in high dudgeon and considerable drama with the violent death of Thomas, the senior pathologist, the threatened demise of Jack (David Caves) and the departure of Clarissa (Liz Carr), leaving Nikki (Amelia Fox) almost high and dry for the next series. I thought this series was the best of all of them!

I don’t think anyone would challenge the credentials of Joachim Phoenix and Renee Zellweger for winning their respective BAFTAS as best actor in ‘Joker’ and best actress in ‘Judy.’ Therefore, it came as no surprise that they both won Oscars in their respective categories last night. Hopes were high that ‘1917’ would win best picture, even though I, personally, had very little empathy with the story line. The cinematography was, however, sensational. However, it was not to be, it went to the Korean production - ‘Parasite.’ It also picked up best director - Bong Joon Ho.

Last week produced very strange, unnerving and volatile conditions for equities and oil. Uncertainty over the extent of damage done to global growth by this debilitating Coronavirus, was at the top of the agenda at the beginning of the week. However, as the days went by, investors’ appetite for risk returned as did significant confidence for trading, aided and abetted in the US by the failure of Nancy Pelosi and Congress to impeach President Trump. Market protagonists were further satisfied that this debilitating and potentially lethal virus was being contained in most parts of the world, apart from China, where the real truth about its toxicity was continuing to be shrouded in uncertainty, with China’s Government continuing with their policy of being economic with the truth. However, as the death toll rises to 900, with 40,000 cases recorded, concern may rear its ugly head next week.

The market has tried to tell us that this virus may not adversely affect global growth too much, but no one definitively knows (circa 0.3% to 0.5% EST). What we do know is that much of China is in ‘lock down’ and goods and chattels may not be moving in and out of China to many parts of the world. Fiat Chrysler has told us that they will know in the next few weeks whether production of cars in Europe will be affected, with so many spare parts being made in China

There was relatively good news on the US economic front with US Nonfarm Payrolls increasing by 225,000 in January following December's reading of 147,000 (revised from 145,000). Expectations of 160,000 new jobs was expected. Unemployment ticked up to 3.6% and the Average Hourly Earnings increased 3.1% on a yearly basis to beat the market expectation of 3%.

In Europe the news was not quite so positive. On Friday morning dispiriting news filtered out that European industrial output data signalled big falls in Germany (-3.5%) and France (-2.8%) in December 2019. Orders were 8.7% lower in December 2019 than they had been a year earlier – the biggest annual drop since 2008.

Conversely with humility I am pleased to report that the UK’s retail enjoyed its best month for 6 years, part of the ‘Boris Bounce’ from a relatively low level with like for like sales increasing by 5.7% on this time last year. On-line sales jumped by 18.9% on furniture and homeware. It should not be forgotten that heavy discounts were prevalent, which of course, damages profitability. It was also reassuring to note that business employment had selected another gear, as confidence in the UK’s economy appears to have grown. In terms of PMI data last month manufacturing and the services sector had improved measurably.

Apart from China, which had been closed for Chinese New Year the previous week, all the main global bourses have recovered sharply, with both the Dow Jones and S&P 500 breaching new record levels midweek. The FTSE 100’s effort was slightly disappointing for three reasons. The oil and mining sectors have not been vogue recently, ‘no deal’ seems to be back on the agenda, as Brussels and London exchange inflammatory threats over trade negotiations with each other and Trump’s incandescence over UK agreeing to use Huawei G5 services, which could damage the possibility of a trade deal. Cable has drifted to $1.2891 – its lowest level since the General Election. Brent crude oil fell from $65 a barrel, a few weeks ago down to $50 earlier last week but had settled at $54 on Friday. Gold has remained quite steady at $1578 an ounce. We should all be prepared for some volatility next week, if there is no evidence of this virus being contained.

The corporate news flow last week was fulsome to say the least on both sides of the Pond. Despite dropping another $1.1 billion in the last quarter, Uber’s revenue jumped by 37% to $4 billion. Uber still awaits its appeal against being banned in London. Shares bounced 9.6% on Friday, more in hope than expectation to $40.63, a smidgen under its original price post IPO. Twitter’s revenue hit $1 billion for the first time. Advertising revenue was a little light, but the market approved of the progress. Shares were up after hours on Wednesday by 15%. Twitter’s shares are circa 11% higher than their issue price in 2013. The delay to Boeing’s 737 MAX is still undecided but it might be earlier, according to Steve Dickson, the FAA regulator, who boldly said that the 737MAX would not fly, until he had flown it, with his family on board.

Alphabet’s quarterly numbers did not quite hit the spot as those of Microsoft and Apple. However, revenues were up 17% and YouTube sales increased by 31%. The bar had been set high and its shares dipped by 4% on Monday. Tesla had a barnstorming week on expectations rather than numbers. Elon Musk’s baby’s shares are up 78% since the beginning of the year from $418 to $745 a share. Though it has 2.89 billion monthly users and 8 million advertisers, Facebook’s numbers did not quite meet with analysts’ approval. Again, expectations are very high and perhaps corporate governance has not hit levels expected yet. Walt Disney CEO Bob Iger posted encouraging earnings, especially the streaming numbers, where subscription numbers have reached 26.5 million in 3 months. Netflix! You have been warned! GM, through strikes and sales issues with China (-15.1% in the last quarter) posted a $196 million loss for the quarter. Tesla’s share capital is now almost greater than Ford’s and GM’S combined.

Here in Old Blighty, BP’S Bernard Looney faced climate change issues as he took over as CEO from Bob Dudley.  Earnings from Vodafone and Barratt were solid but not spectacular. The same applied to Glaxo Smithkline, where CEO Emma Walmsley is preparing to split the pharmaceutical division from healthcare in response to its joint venture with Pfizer. Turnover for the year was up 10% to $33.7 billion – pharma £17.5 billion, vaccines £7.1 billion and health care £8.9 billion. As if Fraser’s Mike Ashley did not have enough on his plate, he announced that he had taken a 12.5% stake in Mulberry. He is also still trying to sell Newcastle United to Saudi Arabian conglomerate for £340 million.

On her first day as Chairman of John Lewis, Dame Sharon White announced that she had appointed Nina Bhatia as an executive director to focus on technology. She further announced that there would be redundancies and the possibility of stores being closed. Profits had fallen sharply and savings of £100 million needed to be implemented, as the debt has risen to £2.4 billion. Mike Lynch sold Autonomy to Hewlett-Packard for $8 billion in 2011. Meg Whitman, HP’S then CEO, felt that the accounts were fraudulent, Mr Lynch has vigorously denied these allegations, but last week he was arrested and may possibly be extradited to the US to face charges.

Supermarket data supplied by Kantor shows that Aldi and Lidl are still on the charge having increased sales substantially, now jointly sharing 13.8% of the market. The Big four all surrendered a little ground, though Tesco still claims 27.3% of the supermarket business.

Burberry has scrapped its financial forecasts after closing more than a third of its stores in China due to the outbreak of Coronavirus. Tidjane Thiam has resigned as CEO of Credit Suisse, amid a reported power struggle with chairman Urs Rohner and in the wake of two spying scandals. Credit Suisse's board has unanimously backed Mr Rohner, despite high profile pledges of support for Mr Thiam from key investors

The Sunday Times tells us that the £550 million sale of promising biotech operations by Woodford Funds has hit the buffers for the time being. At present over 300,000 investors are stuck in Woodford Investments. The Sunday Telegraph tells us that an insider, Sarwjit Sanbhi may be the new Centrica CEO to replace Iain Conn. His major problem initially will be the company’s debt mountain, as Centrica struggles to sell assets to Spirit Energy for £1.5 billion.

UK companies posting results this week – Tuesday – Dunelm, Ocado, AA, Wednesday – Babcock International, Thursday – Barclays Bank, Coca-Cola EP, MJ Gleeson, Moneysupermarket, Tullow Oil, Lancashire Holdings, Liberty Global, Centrica, Invidior, Relx, Safestore, Great Portland Estates,  Friday – Astra Zeneca, Manchester United, RBS, Segro Group,

US companies posting results this week – Tuesday – Denny’s Newmark Group, Omnicom, Unisys, Wednesday – AIG, Hyatt Hotels, Marathon Oil, Thursday – Applied Materials, Cisco Systems, CME, Nvidia, Paramount, Viacom, Friday – Beyond Meat, Deere & Co, Lyft, PepsiCo,

Economic data to be posted this week – Tuesday – GDP, UK Index of services, Industrial Production and Manufacturing Output, BRC Retail Sales, Wednesday – EZ Industrial Production, Thursday – RICS Housing Survey, US Inflation, Friday – EZ GDP, US Retail Sales & Industrial Production

 David Buik