WEEKLY FAYRE – Monday, 17th May 2021

May 17, 2021

“Rain, midnight rain, nothing but the wild rain
On this bleak hut, and solitude, and me
Remembering again that I shall die
And neither hear the rain nor give it thanks
For washing me cleaner than I have been
Since I was born into this 
Blessed are the dead that the rain rains upon:
But here I pray that none whom once I loved
Is dying tonight or lying still awake
Solitary, listening to the rain,
Either in pain or thus in sympathy
Helpless among the living and the dead,
Like a cold water among broken reeds,

Myriads of broken reeds all still and stiff,
Like me who have no love which this wild rain
Has not dissolved except the love of death,
If love it be towards what is perfect and
Cannot, the 
tempest tells me, disappoint.”


Edward Thomas – soldier & poet – 1878-1917



Most neutrals will have been delighted that Leicester City won the FA Cup on Saturday, beating Chelsea 1-0 for the first time in their long history. Let us all spare a thought for Khun Vichai Srivaddhanaprabha, who put his life and soul into the club. To see the smile on skipper, Kasper Schmeichel's face was worth the price of entry – needless to say, it was TV for me!

Finally, hats off to Manchester City for winning the Premiership with a bit in hand - clearly the best footballing side in the land by a country mile. Their extraordinary success included 12 wins away from home.



10th May 2021

14th May 2021

% Loss/Gain

















S&P 500





















Looking at the table above one might be forgiven in thinking “Ah, well just a disappointing week, as we enter the ‘sell in May come back on Leger Day’ syndrome!” Not so; not by any stretch of the imagination. By Wednesday evening, global stock markets were looking as if they might have to go on ‘life-support’ assistance. The DJIA had shed the best part of 4% in three working days and the NASDAQ a smidgen over 5% in just over a week. Then on Thursday morning, investors thought to themselves “Nah, these markets look distinctly over-sold.” The recovery is on its way, the vaccine programme has made huge strides, though the Indian variant is a cause for concern. US economic data is improving. Initial jobless claims continued to decline last week with unemployment beneficiaries totalling just 473,000 for the week ending 8th May 2021.

It would be trite thinking to dismiss the inflation threat, not only in the US but across the world. There is strong evidence that a shortage of raw materials, timber, steel, and chips plus an eye-watering increase in transport costs, is filtering through. Inflation in the US is already a problem, reaching its highest level of 4.2%, up from 2.6% in March, since 2008. However, many economists and observers believe that this hike may only be a temporary aberration and it will iron itself in the ensuing months. Any meaningful hike in official interest rates would damage the recovery process. US Retail sales, posted on Friday, unexpectedly stalled in April, as the boost from stimulus cheques faded. The Commerce Department said the unchanged reading in retail sales last month followed a 10.7% surge in March, an upward revision from the previously reported 9.7% increase. An acceleration in sales is likely in the coming months, however, amid record savings and a reopening economy.

By Thursday morning sentiment turned on a sixpence and in all but heartbeat the DJIA futures bounced by nearly 300 points. Investors seemed to be encouraged to take a bit more risk on board, regardless of any negative vibes about inflation or concerns about over-valuation. Notwithstanding the improving sentiment for investing, over this weekend, concern will also be rising over the escalation of hostilities between Israel and Hamas. There appears to be a lack of global leadership, with both sides unable or unwilling to stop this devastating conflict.

UK GDP for March, which came in at +2.1% showed a marked improvement on the -1.5%, which was posted for the 1st quarter. Provided there is no relapse from any variant, the next few months should see a major surge in economic activity. The outgoing Bank of England Chief economist, Andy Haldane, has signalled that his colleagues on the MPC are being too gloomy about the pace of the UK’s economic recovery from the pandemic. Provided the consumer spends a high proportion of the huge level of savings squirreled away in the last year, plus there is massive investment in business expansion, starting this Monday, 17th May, the UK is set to do very well.

We have already seen considerable interest and appetite for an array of constituent stocks in the FTSE 250 for both investors and predators. The year is only 5 months old and there have already been 29 IPOs. Half a dozen IPOs have been brought to market on Aquis Stock Exchange. The only two failures have been Deliveroo and Alphawave, a chip operator, whose shares fell 21% on their opening day last Thursday, though it recovered some modest poise on Friday. The City has been unfairly criticised for its role as a centre for IPOs. This is grossly unfair. Deliveroo and Alphawave were advised by JP Morgan and were brought to the market on the LSE. In both cases they were overvalued, and the timing of Alphawave’s IPO left much to be desired.

There were interesting corporate developments on the Street of Dreams last week. Disney posted slightly disappointing numbers – understandable, considering its theme parks were not all open, nor were its film studios firing off six cylinders. Revenue at $15.61 billion was slightly light, but it was the subscription number of only 103.6 million, which disappointed considering Disney hoped to reach 230 million by 2024. Also, news that the monthly revenue per user had dipped by 29% was disappointing. Airbnb’s revenue grew 5% in the first quarter, and gross booking value rose some 52% as users opted for full homes and destinations outside cities. The company’s net loss tripled, largely due to debt repayments. Airbnb is uncertain if the recovery will continue at the same rate in the second half of this year. Wendy’s is to open 400 stores in the UK, creating potentially 12,000 jobs in next three years. 

Alibaba posted its first operating loss, which was due not only to the pandemic, but also to an anti-trust fine of $2.8 billion and to restrictions imposed on the company by the Chinese authorities. Boeing announced it was collaborating with Rolls Royce on building engines for smaller planes as they battle to survive the pandemic. Apple will be defending itself in court against Epic Games of the US and a slew of about 19.6 million customers in the UK over allegations of charging excess commission on access to apps. Apple will defend its position strenuously. Amazon is set to hire 75,000 workers in the US and Canada, plus another 10,000 in the UK. However, the company will be obliged to improve the working conditions and the pay of its staff. Tesla’s Elon Musk threw his supporters into confusion over the company’s attitude towards the role of Bitcoin. Tesla’s shares fell 11% in response to the prevarication.

On the UK earnings and trading update front, Greggs, the baker posted an encouraging statement with sales picking up in the last month (only down 4% compared to 2019). Its shares have rallied 38% year to date, including a 4.4% increase last Monday. Burberry posted a £200 million drop in revenue to £1.91 billion for the year to March 2021. However, thanks to buoyant sales in China and the US, sales grew 32% in the 4th quarter enabling a 176% increase in profits to £521 million to be posted. Wm Morrison only announced a 2.7% increase in like for like sales in the last quarter, a not unsurprising dip from 9% in the previous one, when the country was in full lockdown. The 64-year-old CEO, Dave Potts seemed happy with the progress made. Tui Travel delivered a £1.3 billion loss for the six months to March. However, 2.6 million people have already booked holidays this summer.

It came as no surprise that the catering giant, Compass, had seen its operating profit decline by 76.8% to £168 million. Nonetheless, it was returning £25 million to the furlough scheme. It was its sport, education and business divisions that had suffered most from Covid-19. Diageo saw a 1% increase in organic sales for the six months to the end of December 2021. Spirit sales in the UK were up 15% and by 12.3% in the US, Diageo’s largest market. CEO Ivan Menezes served notice to return £4 billion to shareholders by 2024. Hargreaves Lansdown added 126,000 customers between January and April 2021, making a total of 1.6 million. Trading volumes are starting to ease back from the frenetic activity at the beginning of the year. Pret A Manger will be opening 4 franchises in Tesco stores to help underpin the loss of business, caused by people not returning to the workplace. The first one will be in the massive Kensington Superstore.

Saturday was a sad day for retail, as Debenhams closed its final store, having opened its first in 1778. At its peak, the celebrated high street retailer had 178 locations. Most of the 12,000 employees will have lost their jobs. Boohoo picked up the on-line business for a purported £55 million. It is regrettable that Mike Ashley, he of Sports Direct and Fraser fame, was not given the opportunity of salvaging at least part of the business.

Softbank has taken a £1.6 billion stake in the Hut Group, the on-line luxury retailer with a view of expanding its markets globally, especially in the Far East. THG shares rose 13% on Wednesday. The UK government has sold a further 5% of NatWest taking the taxpayer’s stake down to 54.8%. In 2009 the stake was 84.4% post the £45 billion bailout. The NatWest share price is currently 192.6p. Breakeven is 503p! Philip Jansen, BT Group’s CEO served notice that full-fibre broadband would be rolled out to 5 million users by 2026, creating 7,000 new jobs with a massive investment of £15 billion. The news was posted after very average full year pre-tax profits of £1.8 billion – down 23% on a 7% fall in revenues – were announced. BT Sport’s sale is still under consideration.

Astra Zeneca’s CEO, Pascal Soriot is facing huge pressure from shareholders, who are unhappy with his £17 million annual emolument – up about £2 million on the previous year. M Soriot has been holed up in Australia for 5 months and hopes to return this coming week. Though Astra has done a brilliant job with vaccinations, its CEO’s remuneration does appear to be on the avaricious side in the current climate. Company board members are braced for a wave of investor anger on pay awards.

The SFO has launched an investigation into the financing of Sanjeev Gupta’s metals empire, including its links to Greensill Capital, in a move that immediately caused the collapse of a rescue deal for Liberty Steel and raised fears over 3,000-5,000 jobs. The SFO said it suspected fraud, fraudulent trading and money laundering related to the financing of Gupta Family Group Alliance (GFG), the loose grouping of steel and metals trading companies controlled by Gupta. These allegations have been strenuously denied.


UK companies posting interim results this week – Monday – Imperial Brands, TBC Bank, Qinetiq, Land Securities, Scottish Mortgage, Petropavlovsk, Tuesday – Britvic, Cranswick, DCC, Vodafone, Marston’s, Severn Trent, Topps Tiles Wednesday – Great Portland Estates, Premier Foods, Royal Mail Group, Thursday – easyJet, National Grid, Investec

US companies posting interim results this week – Monday – Zoom, Tuesday – Baidu, Home Depot, Macy’s, Walmart, Wednesday – L-Brands, Target, TJX, Manchester United, Thursday – Applied Materials, BJ’S Wholesale, Hormel Foods, Kohl’s, Ralph Lauren, Ross Stores, Friday – Deere & Co, Foot Locker


Economic data to be posted this coming week – Monday – New York Empire State Manufacturing, US NAHB Housing, Tuesday – Japan 2nd Q GDP (EST: +2.8% Q/O/Q), UK Unemployment (EST: March 4.9%), EU GDP 2nd Q (-0.7% Q/O/Q), US Housing Starts, Wednesday – UK Inflation (April EST: +0.7%, PPI 1.7%), EU Inflation (EST: 1.3%) US MBA Mortgage Applications, FOMC Minutes, Thursday – UK CBI Industrial Trends, US Phili-Fed, US Initial Jobless Claims, Friday – UK Gfk Consumer Confidence, UK/EU/US Markit Composite (Manufacturing, Construction, Services), US Existing Home Sales