WEEKLY FAYRE – Monday, 24th May 2021

May 24, 2021

Woman much missed, how you call to me, call to me,
Saying that now you are not as you were
When you had changed from the one who was all to me,
But as at first, when our day was fair.

Can it be you that I hear? Let me view you, then,
Standing as when I drew near to the town
Where you would wait for me: yes, as I knew you then,
Even to the original air-blue gown!

Or is it only the breeze, in its listlessness
Travelling across the wet mead to me here,
You being ever dissolved to wan wistlessness,
Heard no more again far or near?

Thus I; faltering forward,
Leaves around me falling,
Wind oozing thin through the thorn from norward,
And the woman calling.

Thomas Hardy – author & poet – 1840-1928 


Phil Mickelson, at the age of fifty, became the oldest golfer to win one of the 4 major golf tournaments, US PGA Championship at Kiawah Island, North Carolina, on Sunday. He won by 2 shots in the final round, shooting six under par for the four rounds, with Brooks Koepka and Louis Oosthuizen in joint second place.


17th May 2021

21st May 2021

% Loss/Gain

















S&P 500





















Not for the first time, the table above is not a true reflection of the travails of global equities that prevailed last week. Volatility did play more than just a ‘spear-carrying’ role. Investors anguished over increasing levels of inflation, valuations, and quality of earnings, measured against real evidence that the world’s economies are making a dramatic recovery, mainly due to the global rollout of the vaccination programme, though some countries across the globe are still struggling, especially India. Consequently, indices traders were kept on their toes, whilst markets ‘bobbed around like corks in a bath.’ The situation was exacerbated by measurable reversals of ‘Bitcoin’ and other crypto currencies. Bitcoin fell from a high in mid-April of $65,000 to $30,000 last Wednesday (30% down last week). At the end of the week, it recovered some poise to $36,000. Elon Musk has caused a marked ripple over his involvement in Bitcoin and the indecision as to his commitment. Many believe his prevarication has contributed to its drop in value and the value of Tesla shares, though he has stated that he will not be selling any of his holding in Dogecoin. Tesla’s shares have fallen 19% in the last month.

On a positive note, US Initial Jobless claims are improving every week, with only 444,000 claiming benefits last week, better than the 452,000 Dow Jones estimate. The total represented a decline from the previous week’s 478,000 and was the lowest since March 14, 2020. The content of Wednesday’s FOMC meeting suggested that it might be appropriate at some point “to consider tapering asset purchases if the economy shows rapid progress,” according to the meeting’s minutes. Markets briefly sold off on the news as investors have been looking for clues about policy changes. Officials remained largely unconcerned about inflationary pressures, which they see as transitory.

Here in Old Blighty rising household utility, clothing, and motor fuel prices made the largest upward contributions to CPI growth in April 2021 – up from 0.7% to 1.5% ; these were partially offset by a large downward contribution from recreation and culture. The supply chain is suffering from indigestion after the global lockdown. Many economists believe that this spike in inflation, which is expected to increase its upward path, should iron itself out in a few months’ time. According to Andrew Sentence, the former distinguished MPC member, who believes that if the impact of VAT cuts and other indirect reductions were stripped out, the CPIY measure of inflation is now 3.2 percent. RPI inflation now running at 2.9 percent and RPIX 3.2 percent.

UK retail sales posted on Friday were very much better than expected. Retail sales volumes surged in April, up 9.2% on March and 10.6% higher than February 2020 - before the impact of the pandemic. Some of this may be pent-up demand so we will need several month’s data before assessing the underlying trend. But still, it was a very encouraging news. With so much of the UK workforce still being furloughed, Tuesday’s employment data was difficult to interpret. The unemployment rate fell to 4.9% and 97,000 were back in employment last month, though 772,000 more people remain unemployed than a year ago.

The final icing on the cake was the Gfk Consumer Confidence reading posted on Friday. It jumped six points to -9 in May, with three measures up in comparison to the 23 April release, one measure down and another flat. The general economic situation index was up by ten points at -48, seven higher than in May 2020, while expectations for the general economic situation over the coming 12 months improved by 15 points to +4, 58 points higher than in the prior year. The major purchase index increased by five points to -7, - 40 points higher than it was in May last year. UK Job recruitment was also quickly returning to pre-covid levels.

In April, Japan's exports saw the biggest increase since 2010, while capital spending perked up on surging global demand for cars and electronics. The increase lifted hopes that an improvement in trade could help lead the world's third-largest economy back to growth. Exports rose 38% in April from a year earlier, official data showed, compared with a 30.9% increase expected by economists, and following a 16.1% rise in March. That was the fastest gain since April 2010, led by US-bound shipments of cars and car parts and Chinese demand for chip-making equipment.

The Hang Seng recently announced that it will increase the total number of component stocks to 80 from 55 by mid-2022, adding firms from underweight sectors and reducing the impact of the city’s biggest companies. The changes are expected to be made over the course of five quarterly reviews. This news was a contributory reason for this index performing rather better than other global indices last week.

Had some significant M&A activity not taken place last week on ‘The Street of Dreams’, supplemented by outstanding contributions made by the retail titans – Walmart, Target and Home Depot – Wall Street could well have ended last week, lower. Walmart posted revenue of $138.31 billion for the quarter – a quite staggering amount with e-commerce sales up 37%, despite people returning to work and re-visiting their stores. Target, the US’s second largest supermarket, saw sales rally by 23% and Home Depot, the King of DIY, saw its sales bounce by 32.7% in their respective last quarters.

On the IPO front, Oatly, the Swedish plant-based milk company, supported by celebrities such as Oprah Winfrey and Natalie Portman, made a successful debut in New York last week, with shares gaining a 17% premium to $22 a share, valuing the operation at $13 billion. Amazon is in talks to buy MGM studios, with a view to giving more credence to Amazon Prime and its streaming aspirations. If the $9 billion deal is consummated, it will include the 26-film James Bond Library, which means ITV may have to say ‘Sayonara’ to access. AT&T, which bought Time Warner (CNN, HBO, Harry Potter etc) for $85 billion in June 2018, has expressed its intentions to merge the media operation with The Discovery Channel in a $130 billion deal. Clearly tapping the streaming market is the objective. Netflix has 208 million subscribers and Disney 104 million. AT&T has 64 million and Discovery 15 million subscribers. Its an interesting concept, but the competition is fierce. Liberty Media’s Virgin Media received confirmation from the CMA that its proposed £31 billion merger with Telefonica’s O2 can go ahead. The joint venture will have access to potentially 46 million users.

Tesla’s Elon Musk paid a fleeting visit to the UK last weekend. It is rumoured that he is considering opening a factory in the UK to complement the one Tesla is opening near Berlin. There has been no confirmation. Apple’s Tim Cook has been court, facing Epic Games over competition issues. Apple charges a 30% commission for access to EPIC’S app to the exclusion of other apps offering alternative arrangements are allowed on the iPhone or iPad. Apple makes considerable income out of this service and intends to defend its corner vigorously.

A few interesting companies posted their results or trading statements last week, with varying degrees of success. Ryanair posted a loss of €815 million for the year with an 81% drop in traffic levels – the worst loss in in its 35 years history, but ironically, better than expected with it shares rallying 2%. Michael O’Leary was not backwards in coming forward in his criticism of Boeing’s abject service to the airline industry. EasyJet racked up a £701 million loss in the first half of the year with passenger numbers down by 84.9%. Indecision by the Government over holiday travel has meant that easyJet will now operate just 15% of flights between April and June, rather than the proposed 20%.

Kingfisher’s trading statement made great reading, apart from the fact that raw material prices including timber and steel had risen by 10% in recent weeks. However, like-for-like sales were up 23% to £3.4 billion in the last quarter, with B&Q up 42% and Screwfix by 42.5%. The French operations of Castorama and Brico were not quite so ebullient in their achievements. John Laing fell into the arms of private equity, with KKR picking up a £2 billion tab. There are also other private equity offers out for Sanne, UDG Healthcare, and St Modwen. The Times’s Ashley Armstrong told us last week that Dunelm is now worth more than M&S. Dunelm has 174 stores, making £1 billion sales last year with a profit of £109 million and on track to make £148 million this year. M&S has 1000 stores, took £10 billion from sales, and is expected to announce a profit of £43 million. In 2007, under Lord Rose a profit of £1 billion was made – admittedly there was no Covid-19 then!

It is possible that a significant part of embattled industrial entrepreneur Sanjeev Gupta's Liberty Steel could be bought by Jingye, the Chinese conglomerate that acquired British Steel out of liquidation. Jingye swooped on British Steel in 2019 after it collapsed into administration.

Shares in Oxford Cannabinoid Technologies soared on the Snoop Dogg-backed cannabis research firm's London debut on Friday. OCT placed 960.4 million shares at 5p per share, implying a market value of around £48 million. Shares jumped by 50% to 7.5p in early trading, before settling back at around 5p later, on Friday morning. Other backers include Imperial Brands which owns 11% of the equity.

The Government has become concerned that Glaxo SmithKline could become a takeover target for hedge-fund activist, Elliott Management, and others, who are alleged to have taken a measurable minority stake in Europe’s largest drug and healthcare operator. There has been considerable unease about the on-going policy of the group and the professional aptitude of CEO Dame Emma Walmsley, whom they believe has underperformed during her stewardship.

Neptune Energy, chaired by former Centrica boss Sam Laidlaw is considering a £7 billion IPO and will consult with JP Morgan. Moderate concern has been noted that significant appetite for another quoted energy titan would need to be manifested.

It is going to be a bumper week for IPOs at Aquis Stock Exchange (AQSE) this week, with no fewer than 3 companies coming to market: Pharma C Investments, Clarify Pharma and Pioneer Media Holdings.

UK companies posting interim results this week – Monday – Amigo, Tuesday – Aveva, Big Yellow, British Land, Speedy Hire, Ixico, SSE, Shaftesbury, Greencore, Wednesday – Pets at Home, DMGT, M&S, De La Rue, Biffa, Intertek, Thursday – Charles Stanley, Caledonian Investments, United Utilities, Johnson Matthey, Tate & Lyle, Ted Baker, Aviva

US companies posting interim results this week – Tuesday – Autozone, Toll Bros, Urban Outfitters, Nordstrom, Wednesday – Abercrombie & Fitch, American Eagle Outfitters, Nvidia, Dick’s Sporting Goods, Snowflake, Thursday – Best Buy, Dollar tree, Dollar General, Costco, Dell Technologies, GAP, HP Inc, GameStop, Friday – Big Lots

Economic data to be posted this coming week – Monday - Germany GDP, Germany ifo, Tuesday – UK PSBR, US New Homes, Wednesday – US MBA Mortgage Applications, US Crude Oil Inventories, Thursday – US Durable Goods, US Initial Jobless Claims, US Pending Home Sales, Friday – UK Mortgage Applications, UK Consumer Credit, US Chicago PMI, US Michigan Consumer Confidence