WEEKLY FAYRE – Monday, 10th May 2021

May 10, 2021

The fountains mingle with the river

And the rivers with the ocean,

The winds of heaven mix for ever

With a sweet emotion;

Nothing in the world is single;

All things by a law divine

In one spirit meet and mingle.

Why not I with thine?—

See the mountains kiss high heaven

And the waves clasp one another;

No sister-flower would be forgiven

If it disdained its brother;

And the sunlight clasps the earth

And the moonbeams kiss the sea:

What is all this sweet work worth

If thou kiss not me?”

Percy Bysshe Shelley – poet - 1792-1822


Manchester City and Chelsea completed their respective jobs in seeing off PSG and Real Madrid in their semi-final second legs and will play each other in the final of the Champions League in Istanbul on 29th May 2021. With Covid-19 still rampant, this venue must be changed. Surely in these difficult times, Wembley makes more sense. Manchester City failed to secure the Premiership on Saturday evening, tripping up against Chelsea, losing 1-2. Aguero tried to be clever taking a penalty, which would have given City a 2-0 lead at half-time. Shades of Fulham’s Lookman, who made a similar hash of his against West Ham earlier in the season.

Though cricket aficionados were downcast when the hugely popular IPL competition was called off in India, it was unequivocally the correct decision.



3rd May 2021

7th May 2021

% Loss/Gain

















S&P 500




















• Denotes 4th May

+ denotes 6th May

Last week was a difficult one for investors to get their heads around. The data and comments made were further complicated in some quarters by conflicting comments. The FED seems determined that inflation, when it eventually rears its ugly head, will be a temporary blip. US Treasury Secretary Janet Yellen then puts her head above the parapet saying ‘though it would not be my choice, perhaps rates will go up’! Consequently a few cages were rattled and suddenly rock-solid confidence in equities was temporarily breached.

Friday’s Non-farm payroll data for April was a huge ‘let-down’, with the 266k jobs created, being much less than expected and the unemployment rate rising to 6.1% amid an escalating shortage of available workers. Dow Jones estimates had been for 1 million new jobs and an unemployment rate of 5.8%.

Most economists had been expecting a stellar number amid signs that the U.S. economy was roaring back to life, especially as Wednesday’s ADP Private sector announced that 742k jobs had been created in the private sector last month. There was continued growth in the leisure and hospitality sectors, but these gains were partially offset by declines in business services and transportation and warehousing, with manufacturing and retail also seeing small declines in employment. It was also dispiriting to hear that March’s NFP numbers originally estimated total of 916,000 was revised down to 770,000, though February saw an upward revision to 536,000 from 468,000. The Street of Dreams seemed happy to shrug this unexpected downbeat data off as a temporary aberration. Only the NASDAQ continued its journey South, which it had been doing for most of the week. Investors feel tech has become too frothy, especially if inflation becomes an issue and the shortage of chip supplies remains a problem. There were a few crumbs of comfort in that ‘Initial claims’ for unemployment benefits fell sharply last week, sinking below 500,000 for the first time since the Covid crash.

Thursday’s MPC was the most encouraging monthly meeting for some considerable period. The official base rate remained unchanged at 0.1% with quantitative easing being confirmed again at £895 billion, despite the outgoing Chief Economist Andy Haldane voting for some tapering. However, it was the upgrade on growth for 2021 that captured the City’s and business’s imagination. GDP forecast was raised from 5% to 7.25%, with the unemployment outlook being cut from 7.75% to 5.5% - potentially a net saving of 700k jobs, which might have been lost. This would be the UK’s best performance for 70 years. These growth estimates are dependent on much of the £150 billion savings that have been squirrelled away in the last year being spent, including money saved by corporates, which now must be largely invested in their businesses. Also, the service sector, which represents 80% of the UK economy is growing at its fastest rate since 2013. UK car registrations for April came in at 141,583 new cars – significantly higher than in April 2020 when ‘lockdown’ closed retail and the nation, but still -12.9% down on the decade’s average. SMMT revised its forecast upwards to 1.86m registrations by end of the year, up 13.9% on 2020. In the Far East, China’s exports were up 32% to $264 billion – in the same month imports grew by 43% in comparison to this time last year.

Global stock markets continued to make cautious gains in a week that was shortened by public holidays in the UK last Monday and on Monday, Tuesday and Wednesday in Shanghai and Tokyo. The earnings calendar continued to produce positive results and the global vaccination programme was gathering pace at a satisfactory rate, though real concern was expressed at the savage damage that Covid-19 was inflicting on India and the potentially adverse ramifications it was having on their soulful people.

A splendid compendium of US corporate news manifested itself last week. Despite the imposition of the minimum wage likely to cost Uber $600m a year, its gross bookings were up 23.8% in comparison to the same period last year, totalling $19.5 billion. The growth was primarily driven by the 166% increase in delivery orders, with rides dropping by 37%. The loss was paired down significantly thanks to the sale of $1.6 billion of the self-drive operation. The recall of 125,000 treadmills by Peloton, due to a sad death and a few accidents, saw its shares drop by 14% ($4 billion in value) last Wednesday. However, the announcement of decent results on Thursday with a loss of only $8.6 million on revenues of $1.26 billion, with sales up 141% saw the shares bounce back by 5.3%, but they are 39% easier since the start of the year. Moderna announced it would supply 800 million vaccines in 2021, Shares fell 5% but are up 230% in the last year. Pfizer generated $3.5 billion of vaccine revenue in the first quarter of 2021. Revenues are expected to top $26 billion this year on the sale of 1.6 billion vaccines. Pfizer shares are only up 17% in the past year.

Warren Buffet, the 90-year-old sage of Omaha, announced his successor – the 58-year-old Greg Abel. The grand master has not lost his touch. Berkshire Hathaway shares have bounced 59% year-to-date - $264,800 to $421, 420 a share! Apple is likely to find itself in Court, facing Epic Games, which are incandescent at being charged excessively for distributing its app. The markets were delighted to hear that Google and Goldman Sachs will be encouraging their staff to return to work for at least 3-days a week.

Though the UK earnings tap did not flow quite so freely last week, there was still plenty of corporate news to digest. On the retail front, Boohoo reported a 41% rise in full year sales, having purchased the bands of Dorothy Perkins, Wallis, Burton, and Debenhams, which added about 5% to sales growth in the current financial year. Debenhams, with roots going back to 1778, will finally close their doors for the last time on 15th May 2021, with 12,000 people in total losing their jobs. With Julian Dunkerton, having retaken the helm of Superdry, whose merchandise is dominated by vintage American fashions, this aspiring retailer saw its sales grow by 26.6% in the last year, despite full year revenue falling by 21%. The shares responded positively and bounced like a proverbial grilse by 28% last Thursday and consequently shareholders have gained 60% in the past year to 353p.

It was good to see that NEXT, run by the effervescent Lord Simon Wolfson, had lifted its profit targets for the year after it reported sales for the past three months which were significantly better than expected. The high street firm said it delivered £75 million more sales in the 13 weeks to May 1 than its original target, as sales dipped by 1.5% for the period against the same quarter in 2019. NEXT told investors it was boosted by a 65% jump in online sales for the period. Arcadia is looking to sell its Topshop flagship store in Oxford Street for £420 million. Much of the sale proceeds will go to pay off a loan to Apollo and the rest to the £510 pension black hole. JD Sports, Amazon, Fraser’s, and Nike have expressed an interest is acquiring these prestigious premises.

Barratt Development posted improving house sale numbers likely to total 16,250 this year. IAG posted dispiriting numbers with no profit guidance for 2021, having made a loss of €1.14 billion for the last quarter. IAG is continuing to burn money at a rate of €175 million a week. Investors seem cautiously optimistic, having driven its shares up 39% since the beginning of the year admittedly from a very low base – 149p to 207p. Intercontinental Hotels is witnessing improved demand for accommodation, especially in mainland China and the US, despite a 50.6% drop in room demand in the past year.

Hats off to Sir Martin Sorrell and his colleagues at S4 Capital, where sales grew by 35% in the past quarter – mainly digital. S4 Capital’s share price has rocketed by 403% in the past 2 years, as against his former emporium, WPP, whose share price has risen by the rather more parsimonious level of 21%. Virgin, which now includes CYBG,posted a profit of £72 million after incurring integration costs of £173 million. Return on capital was good – 10.1%. Mortgage loans totalled £58.3 billion. Results from two European banks – Societe Generale and Italy’s UniCredit – were much improved, though their success was mainly down to investment banking and trading.

The FT tells us Sanjeev Gupta’s attempts to save his British steelworks hit a roadblock on Friday as Credit Suisse, which is pursuing the industrialist for $1.2bn, said it had yet to be contacted over a proposed £200m bailout loan and could not agree to terms if its clients lost out. Gupta has agreed the loan from White Oak, a US-based private finance group, to provide an injection of much-needed working capital to his ailing speciality steel plants in Yorkshire that would allow them to return to full production.

The FTSE 250, after hitting new records, saw a takeover frenzy take hold as Meggitt rose 8.3% on interest from US operator Woodward and St Modwen jumped 20%, with Blackstone expressing keen interest. KKR is alleged to be in early talks to buy another midcap group, John Laing. Many investors believe that valuations of many UK companies are cheap.

UK companies posting interim results this week – Tuesday – Wm Morrison, Wednesday – Investec, Vertu Motors, Compass, Sage, Coca-Cola HBC, Thursday – Vedanta Resources, Brewin Dolphin, Grainger, Beazley, Hargreaves Lansdown

US companies posting interim results this week – Monday – Eastman Kodak, Marriott, Revlon, Coty, Tuesday – Palantir, Wednesday – Applied Materials, Jack-in-the-Box, Wendy’s, Thursday – Alibaba, Airbnb, Dillard’s, Walt Disney

Economic data to be posted this coming week – Monday – Halifax House Prices, Tuesday – UK Retail Sales, Germany ZEW Sentiment, Wednesday – UK GDP, UK Industrial Production, Services, Manufacturing & Balance of Trade, EU Industrial Production, US MBA Mortgage Applications, Thursday – US PPI, US Initial Jobless Claims, Friday – US Retail Sales, US Import & Export Prices, US Industrial Production, US Univ of Michigan Consumer Confidence