WEEKLY FAYRE – Monday, 21st June 2021

June 21, 2021

“I must down to the seas again, to the lonely sea and the sky,

And all I ask is a tall ship and a star to steer her by;

And the wheel’s kick and the wind’s song and the white sail’s shaking,

And a grey mist on the sea’s face, and a grey dawn breaking.


I must down to the seas again, for the call of the running tide

Is a wild call and a clear call that may not be denied;

And all I ask is a windy day with the white clouds flying,

And the flung spray and the blown spume, and the sea-gulls crying.


I must down to the seas again, to the vagrant gypsy life,

To the gull’s way and the whale’s way where the wind’s like a whetted knife;

And all I ask is a merry yarn from a laughing fellow-rover,

And quiet sleep and a sweet dream when the long trick’s over.”


John Masefield – poet laureate – 1878-1967


For the Liberal Democrats’ Sarah Green to win the Chesham & Amersham by-election by 8,028 votes from the Conservatives represented a 25% swing against the ruling party – almost unprecedented in modern politics. Most political commentators put the rejection of the Tories down to their £110 billion plans for HS2. To some extent that may be true, but other observers, like me, put it down also as a ‘protest’ against the continuation of ‘lockdown’ and draconian travel restrictions. People are ‘fed to the back-teeth’ with prevarication against the success of the Government’s vaccination programme. If life cannot return to some normality, what was the point of the vaccine roll-out?

Unless you happen to be Scottish, the less said about Saturday night’s 0-0 draw at Wembley, the better! It has been 25 years since “The Auld Enemy” played each other in an international competition. It was a dire spectacle. England looked tired, listless, and devoid of any creative ideas. How Gareth Southgate’s team aspires to have been one of the favourites to win ‘Euro 20’ on this performance, escapes me. It will take a miracle of Herculean proportions to turn its fortunes around. To date, Italy and France look a ‘cut-above’ the other challengers of this coveted trophy! With limited resources at their disposal, Scotland acquitted themselves with honour and thoroughly deserved their point.




14th June 2021

18th June 2021

% Loss/Gain

















S&P 500






















In terms of company earnings and activity, last week was a relatively quiet one. Until Friday, markets traded within a very narrow range apart from the tech sector, which attracted a modicum of momentum.  There was only one word on everyone’s lips and that was “inflation!” The previous week had seen a major hike in US CPI inflation to 5% in May from 4% in April, the fastest rate of increase for 13 years and Core inflation rose from 3% in April to 3.8% in May.   A massive shortage in the global supply chain, which includes all raw materials, minerals and spurious but vital components, especially chips, doubtless contributed to US Treasury Secretary, Janet Yellen indicated that if inflation does not come back on the bridle, modest rate increase might be considered inevitable. The ‘engine driver’s’ comments are significant, but market protagonists are miles more influenced by the ‘oily rag’ (Powell), who is always ‘getting his fingernails dirty’ at the front.

Consequently, every word and nuance delivered post the FOMC meeting on Wednesday by chairman Jay Powell was marked, learnt, and inwardly digested by every economist, trader, and observer across the spectrum. The FED sent out a hawkish tone, but the Chairman maintained that the Committee was seeking to achieve maximum employment and inflation at the rate of 2 percent over the longer run. With inflation having run persistently below this longer-run goal, the Committee will aim to achieve inflation moderately above 2% for some time so that inflation averages 2% over time and longer‑term inflation expectations remain well anchored at 2%. The Committee expects to maintain an accommodative stance of monetary policy until these outcomes are achieved. The Committee decided to keep the target range for the federal funds rate at 0 to ¼% and expects it will be appropriate to maintain this target range until labour market conditions have reached levels consistent with the Committee's. Then rates will need to be increased, probably not meaningfully until early 2023.

The UK, despite the postponement of normality by the Government until 19th July, has seen its economy blaze the trail. However, it also has economic issues, which have created ripples of concern – employment data, inflation, and retail sales. Last Tuesday, it was announced that UK unemployment fell from 4.8% to 4.7%. However, as of May 2021, 2 million people are still being furloughed, with the hospitality sector remaining in ‘dire straits.’  Claimants fell by 92.6,000 in May. Weekly earning bounced dramatically to 5.6%! (EST: 4.9%).

On Wednesday, official UK inflation jumped to 2.1% in May, breaching the Bank of England’s target for the first time in two years and stoking fears that the easing of pandemic restrictions since March will lead to a sustained rise in the cost of living. The increase is ahead of a forecast by City economists of 1.8% and means the consumer price index has jumped by the most in six months. The price of fuel was one of the main drivers of May’s increase, soaring by almost 20% from last year to push the rate of inflation up from 1.5% in April to 2.1%. Though an increase in interest rates is on the horizon, many suspect that cutting quantitative easing will start before any hike in rates.

UK retail sales for May (-1.4% MoM) were posted on Friday. According to Panmure Gordon’s Simon French, the fall was largely a function of diverted spend back to hospitality and away from food retailers, which also a levelled off the retail reopening in April. Nonetheless, total CHAPS-recorded spend on credit/debit cards has now plateaued since mid-April.

There was a realisation on Friday that equity valuations were starting to look a little rich for investors’ blood. Hence,  some metaphorical blood was let, starting in Europe, after a relatively benign session in Asia. On Friday, the DJIA eased by 1.6%, S&P 500 by 1.3% and the NASDAQ by 0.9%. Europe experienced even sharper retrenchments – FTSE -1.9%, DAX -1.8% and CAC 40 -1.5%.

The UK earning season has been drawing to a close, but there were still some interesting results posted last week. Halfords has enjoyed some amazing trading  conditions. The sales of bikes rose by 54% in the year to 2nd April 2021. Its mobile van service also performed well. Halfords now runs 404 stores and 374 autocentres. If one had had the vision and foresight to buy Halfords' shares at the start of the pandemic, Well done! The shares are up 528% from 20th April 2020 64p to 402p on Friday! Boohoo sales, despite continuing strife over corporate governance associated with factory working conditions, rose 32% to £486 million in the three months to the end of May. Boohoo recently bought on-line operations of Debenhams for £55 million to add to the Dorothy Perkins, Wallis, and Burton brands, which cost the on-line retail titan £25 million. Despite stores sales for Dr Marten’s falling away due to the pandemic, online sales rose by 73% in the past year. Profits halved to £35.7 million, with cost rising by £80.5 million, but the company is to be congratulated for repaying £1.3 million furlough money. Shares unfortunately fell by 11.5% on Thursday. Fashion retailer, Ted Baker, has also not fared so well with sales falling by 44% to £352 million, thus posting a pre-tax loss of £59 million against a profit of £4.8 million the year before. Business in China has started to pick up and shares rallied by 4% on Thursday, as the loss incurred was less than forecasted.

Tesco, the UK’s largest supermarket posted a trading update for the most recent quarter, with like for like sales up just 1% but up 8.7% over the past two years. Ken Murphy who recently succeeded Sir Dave Lewis as CEO has his work cut out, maintaining Tesco’s preeminent size. The pandemic has been a very costly exercise for Tesco, resulting in its share price falling by 30% in the year to date. Despite Whitbread posting a loss of £1 billion last year, due to the ravages of Covid-19, Alison Brittain the CEO was awarded a bonus of £729,000 at the considerable displeasure of 35.8% of the shareholders.

Though IPOs - large and small - are coming to the market in their droves this year, made.com, the on-Line furniture retailer made an inauspicious debut last week. Shares were issued at 200p, valuing the company at £775.3 million. However, the shares fell to 188p at the close last Monday. I suspect Brent Hoberman, the founder of lastminute.com twenty years ago, and others will hardly think their efforts have been shabby or in vain. Conversely, the LSE is delighted to have been chosen to host Wise’s £3.6 billion IPO, potentially valuing this profitable fintech payment operation at £9 billion. A client can use Wise’s facilities to receive money in one currency and pay it out in another bank account controlled by Wise. Goldman Sachs and Morgan Stanley are advising Wise and the co- founders Kristo Kaarman and Taavet Hinrikus own 19.8% and 11.5% respectively. Investors such as Peter Thiel, Sir Richard Branson, and Claire Gilmartin of Trainline fame are unlikely to come out of this venture impoverished. The company has been profitable since 2017. Now that Huawei will not be used by mobile operators in the UK after 2027, Vodafone has announced it will be using the services of Samsung to develop its 5G operation.

Other deals announced last week, which captured investors’ imagination included JP Morgan’s acquisition of Nutmeg, the on-line fund manager, which handles £3.5 billion for 140k clients, for £700 million. Nick Hungerford and CEO Nick Alexander will be major beneficiaries. In her battle to stave off pressure from Elliott Management’s quest to have her removed from office, GSK’s CEO Dame Emma Walmsley announced the acquisition of Iteos Therapeutics for £1.4 billion. Iteos develops a cancer drug, which will evade the body’s immune system. Private equity titan CVC announced it had bought the staycation Away Resorts for £250 million, whose main operation is in St Ives, Cornwall.

BA and Virgin Atlantic have agreed to join Ryanair in its legal action against the Government over travel restrictions in and out of Europe. This adds to other pressures the Government is feeling thanks to its decision to postpone re-opening the economy until 19th July. Those closely involved in hospitality and travel businesses believe 25,000 venues are likely to remain shut, costing this sector £4 billion. Shares in Restaurant Group, Whitbread, JD Wetherspoon, IAG and easyJet felt the wheels of pain across their respective backs.

Concern has been expressed by Transport & Environment that the UK, thanks to BREXIT, could lose electric car market share due to lack of investment. However, Nissan, Ford and Samsung might take issue with that prognosis. All three intend to develop battery factories. After the G7 ‘love-in’ , the EU and the US seems to have put their tariff spat over Airbus’s and Boeing’s perceived violation of rules behind them, which could lead to a better overall trade deal between them. We shall see. Though smaller in size the UK is due to complete trade deals with Australia and New Zealand.

There was an interesting compendium of business stories and comment that came to light last week. It became apparent that 2.3 million people trade crypto currencies in the UK, despite warnings of significant volatility from the FSA and the Bank of England. It was also interesting to note that the cost of delivering food by the likes of Deliveroo, Uber Foods and Just Eat adds an average of 23% to the cost of a meal, with Deliveroo considered the most expensive (+31%). Goldman Sachs has decided to open an office in Birmingham. It will start with just 150 employees. Goldman currently has 6,500 employees in the UK. Rolls Royce CEO Warren East was vociferously criticised for suggesting that its workforce was ‘a bit too old!’

Oliver Dowden, the Media, and Culture Secretary served notice that Channel 4,which was started in 1982 and is currently self-funded, will be privatised next year. The Premier League posted a loss of £1 billion for the last year, with revenues unsurprisingly falling by 13%, although the top 20 clubs brought in revenue totally £4.5 billion, courtesy of TV rights. It is interesting to note that players’ wages increased by 72% between 2019 and 2020.

UK companies posting interim results this week –  Tuesday – DS Smith, Wednesday – Berkeley Group, LionTrust, Joules, Thursday – Wood Group

US companies posting interim results this week – Tuesday – Korn Ferry, Wednesday – HB Fuller, KB Homes, Thursday – Accenture, Rite Aid, Darden Restaurants, Nike

Economic data to be posted this coming week – Monday – Germany Gfk Consumer Confidence, Tuesday – UK PSBR, Wednesday – US MBA Mortgage Applications, US Current Account, US New Home Sales, US Crude Oil Inventories, Thursday – UK MPC Meeting, Germany ifo, US Initial Jobless Claims, US Durable Goods, US GDP, Friday US Gfk Consumer Confidence, US Personal Spending & Income, University of Michigan Consumer Confidence

Sources – FT, Times, Sunday Times, Telegraph, Sunday Telegraph, Daily Mail, Mail on Sunday, Guardian, Observer, Bloomberg, CNBC, BBC, Yahoo Finance, Reuters