WEEKLY FAYRE – Monday, 26th July 2021

July 26, 2021

O, that this too too solid flesh would melt
Thaw and resolve itself into a dew!
Or that the Everlasting had not fix’d
His canon ‘gainst self-slaughter! O God! God!
How weary, stale, flat and unprofitable,
Seem to me all the uses of this world!
Fie on’t! ah fie! ’tis an unweeded garden,
That grows to seed; things rank and gross in nature
Possess it merely. That it should come to this!
But two months dead: nay, not so much, not two:
So excellent a king; that was, to this,
Hyperion to a satyr; so loving to my mother
That he might not beteem the winds of heaven
Visit her face too roughly. Heaven and earth!
Must I remember? why, she would hang on him,
As if increase of appetite had grown
By what it fed on: and yet, within a month–
Let me not think on’t–Frailty, thy name is woman!–
A little month, or ere those shoes were old
With which she follow’d my poor father’s body,
Like Niobe, all tears:–why she, even she–
O, God! a beast, that wants discourse of reason,
Would have mourn’d longer–married with my uncle,
My father’s brother, but no more like my father
Than I to Hercules: within a month:
Ere yet the salt of most unrighteous tears
Had left the flushing in her galled eyes,
She married. O, most wicked speed, to post
With such dexterity to incestuous sheets!
It is not nor it cannot come to good:
But break, my heart; for I must hold my tongue.


Hamlet – Prince of Denmark


William Shakespeare – poet & playwright – 1564-1616


The British & Irish Lions certainly roared back in Cape Town on Saturday evening. Having been 3-12 at half-time, they won a bruising and pulsating battle against the Springboks by 22-17. Maro Itoje and Courtney Lawes put in outstanding shifts for the tourists, but the whole squad seemed up for the challenge. This series is far from won. South Africa has been in ‘lockdown’ for weeks and did not appear to be as fit as many might have expected. An improvement in their form should be apparent next Saturday.

Ascot’s King George V1 & Queen Elizabeth Diamond Stakes on Saturday may only have had 6 runners but what a quality field it turned out to be with Godolphin’s ‘Adayer’, trained by Charlie Appleby ‘seeing off’ ‘Mishriff’, to win with a little in hand, with favourite ‘Love’ third. ‘Adayer’ ridden by William Buick, is the first Derby winner since ‘Galileo’ to win the King George.

On a totally separate note and Brexit notwithstanding, my ‘Weekly Fayre’ is ‘going Continental’ this summer and taking the month of August off. But never fear, we will be back with you in early September to chart the ups and downs of global markets.




19th July 2021

23rd July 2021

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Last week the ‘buzz word’ in the markets was inflation. It continues to prevail as a cumulonimbus cloud of threat to the global recovery process. However, this week the word ‘pingdemic’ is now the coined phrase adopted by millions in the United Kingdom. Though scientists and the medical profession remain fully committed to ‘track and trace’, the inadequacy of this flawed system for controlling the pandemic has infiltrated significantly into the brittle recovery of the entertainment, hospitality, and travel sector. With over 618k people in Englandand Wales, having received self-isolation alerts, the economy, which has more than shown the green shoots of recovery to yesteryear levels, is starting to stutter again. Last week’s Gfk Consumer Confidence data showed signs of the economy returning to the pre-pandemic levels of February 2020, with the caveat that there were no setbacks to the vaccination process and that the economy would continue to ‘open up.’ Sadly, there looks to be metaphorical potholes along the way. As it stands ‘track & trace’ is a shambles and is in urgent need of radical alteration, with better fine tuning to make it fit for purpose. It is also imperative that those people with two jabs should be allowed greater freedom to travel; such an important ingredient for economic and social recovery.

There were other economic items that were flagged up in the UK, worthy of comment too. On a positive note, a record number of homes were sold, as the stamp duty holiday ended at the end of June – 213,120 transactions were completed – that number was 219% higher than June 2020. Retail sales bounced after an indifferent number in May – up 0.5% from May to end of June. That does not seem excessive in isolation. However, that figure is +9.5%, when compared with their pre-pandemic February 2020 levels. Food sales were up 4.3%, much of that may be down to Euro2020, but non-food sales were down 1.7%. For the three months to the end of June 2021, retail sales were up 12.2% compared to the previous three months – up only 0.8%. On a marginally negative note, UK Public Sector borrowing in June 2021 came in at £22.754bn (largest June borrowing since records began in 1993). Net borrowing for the year to date reached £69.5bn - the 2nd largest figure, again in the same period, but £49.8bn less than 2020! Treasury receipts totalled £62.2bn in June - £9.5 billion more than in 2020. The Government spent £84.1bn in June 2021. The Treasury’s cost of servicing debt has reached an eye-watering £8.9bn a month. Much of this amount is because a quarter of the debt is geared to the RPI index. US initial Jobless bounced to419,000 for the week ended July 17, above the 350,000 estimates. The total represented a gain from the previous week’s 368,000. OPEC and partners agreed to cut the production of oil by 5.8 million barrels a day by September 2021. That decision took the price of crude oil below £70 a barrel, but by Friday the price had bounced significantly above that threshold.

As reported by Refinitiv last Friday, of the 120 companies in the S&P 500 that have reported earnings to date for 21-Q2, 88.3% have reported earnings above analyst expectations. This compares to a long-term average of 66% and prior four quarter average of 83%. Based on the quality of these earnings, which included IBM, Twitter, Coca-Cola, Johnson & Johnson, AT&T and Verizon, the Street of Dreams, after a faulty start last Monday, purred like the ‘Cheshire Cat.’ Twitter missed on subscriber numbers, but revenue grew by 74% year over year in the quarter, with streaming revenue was up 11%, plus an 8% growth in membership revenue. However, Intel, the chip titan,reported second-quarter earnings on Thursday. PC unit sales were up 33% over last year, but the company guided to non-GAAP gross margins of 55% in Q3, a notable drop from 59.2% in Q2. The outlook was far from crystal clear. Its shares fell 5.29% on Friday morning. Who can forget the furore created by the on-line trading platform Robinhood, with its aggressive involvement with GameStop, a few weeks ago? Robinhood is coming to NYSE for a floatation with a staggering price tag of $35 billion. There was plenty of appetite for risk this past week, after a few bumps in the road last Monday and the previous Friday. Investors seemed determined to concentrate on earnings rather than fruitless attempts to read the minds of the FED on direction of interest rates. The FED to date has been adamant – no increases in the immediate future.

It was all about earnings and trading statements in the UK last week. Despite a 26% increase in sales at Burberry in the last quarter, investors were more concerned about Marco Gobbetti heading for Salvatore Ferragamo and the drop in sales in China. Its share value fell by 5%. Burberry has had some great CEOs since leaving the GUS brand. They include Rose Marie Bravo, Angela Ahrendts, Chris Bailey and Gobbetti. AJ Bell added 21,000 new customers in the last quarter bringing the total to 353,000, up 30% in the last year, and funds under management total £70 billion. This is a great success story, though the pandemic has ironically contributed to its success.

NEXT, under the inspired leadership of Lord Simon Wolfson, has enjoyed another stellar trading period, with full price sales up 19% in the eleven weeks to 11th July 2021. Sales are up 44% compared to two years ago. Some £29 million of business rates relief have been returned to the Treasury and the profits guidance has been increased by £30 million to £750 million for the year. NEXT shares rallied by 7%. The Royal Mail Group delivery services seem to have peaked temporarily with parcel sales falling 7% in May to June. In the past fifteen months RMG’s share price has risen 329%! Centrica posted mixed numbers. It lost 114,000 customers. However, a profit of £172 million for the last six months was posted thanks to an energy price increase of £96 on 11 million households. Vodafone’s sales were up 3.3% last quarter – a measurable improvement, but what a disappointing share it has proved to be in the last 21 years down from 527p to 118p on Friday. Having sold its 45% stake in Verizon for $40 billion and its modest stake in Vantage Towers, Europe’s largest mobile operator just seems to have paid down debt since buying Mannesmann in 2000 for €225 billion!

Unilever posted some great sales for the last quarter – up 5.4%. However, inflation is starting to have a negative effect on margins. Investors skimmed some cream off the top of its share price – 5%. Unilever shares are down 8% this year. GSK is expanding its development operations in Stevenage, Herts, which could create 5,000 new jobs. Shareholders in Spire Healthcare bared their teeth last week in rejecting a £1.4 billion bid from Ramsay Healthcare. Much of the credit for this manoeuvre is due to shrewd action taken by Toscafund and Fidelity.

Despite concerns for the future employment prospects for Morrison’s staff, it looks as if Kwasi Kwarteng, the Business Secretary, has waved through the Fortress/Apollo purchase of the UK’s 4th largest supermarket for £6.3 billion plus debt of £3.2 billion. Many believe that UK companies subjected to takeover bids, require greater protection, and guarantees. Bridgeport, the private equity titan, and owner of Burger King and Hobbycraft amongst other companies, posted a very successful IPO last week, with shares soaring 29%. The management and staff could scoop at £.5 billion windfall.

NatWest hopes to cut the taxpayers stake in the bank to 40% in the next year. In 2008 the taxpayer/government owned 84% of RBS (NatWest) and paid £46 billion to bail out this bank. Stock has been dribbled out from time to time at a loss. Breakeven was 503p. The current NatWest share price is 200.4p. Morgan Stanley has been given the task of organising these sales, which this bank did very competently for Lloyds Banking Group in recent times. I suppose it’s cut your losses whilst the going is good.

UK companies posting interim results this week – Cranswick, Tuesday – Moon Pig, Reach, Unite, BP, Mitie, Virgin Money, Greencore, Wednesday – Barclays, BAT, Rathbone, Rio Tinto, St James’s Place, Wizz Air, Glaxo SmithKline, Lancashire Holdings, Thursday – Anglo-American, Royal Dutch Shell, BT Group, Smith & Nephew, Amigo, Astra Zeneca, BAE Systems, Drax, Elementis, Inchcape, Invidior, Informa, Lloyds Banking Group, National Express, Rexl, Vesuvius, Compass Group, Sage Group, Evraz, Friday – IAG, Intertek, Man Group, NatWest, Rightmove, Paragon, Glencore

US companies posting interim results this week – Monday – Lockheed Martin, Tuesday – Alphabet, Archers, Daniel Midland, JetBlue, Apple, Boston Scientific, GE, Raytheon, Starbucks, Microsoft, Wednesday – General Dynamics, Bristol, Myers Squibb, Pfizer, Boeing, Ford Motor, Marriott, Facebook, Thursday – Amazon, Altria, Albertson, BJ Restaurants, Yum Brands! Molson Coors, Merck, Friday – Exxon Mobil. Chevron, Abbvie, Aon, Procter & Gamble, Colgate-Palmolive, Caterpillar, Weyerheuser

Economic data to be posted this coming week – US New Home Sales, Tuesday – BRC Shop index Prices, US Durable Goods, US House Prices, US Consumer Confidence, Wednesday – MBA Mortgage Applications, US GDP, US Crude Oil inventories, Thursday – Nationwide House Prices, UK Consumer Credit, UK Mortgage Applications, UK M4 Money Supply, EU Consumer Confidence, US Initial Jobless Claims, Friday – EU GDP, US Chicago PMI, US University of Michigan Consumer Confidence