WEEKLY FAYRE – Monday, 6th December 2021

December 6, 2021

I leant upon a coppice gate

When Frost was spectre-grey,

And Winter's dregs made desolate

The weakening eye of day.

The tangled bine-stems scored the sky

Like strings of broken lyres,

And all mankind that haunted nigh

Had sought their household fires.

 

The land's sharp features seemed to be

The Century's corpse outleant,

His crypt the cloudy canopy,

The wind his death-lament.

The ancient pulse of germ and birth

Was shrunken hard and dry,

And every spirit upon earth

Seemed fervourless as I.

 

At once a voice arose among

The bleak twigs overhead

In a full-hearted evensong

Of joy illimited;

An aged thrush, frail, gaunt, and small,

In blast-beruffled plume,

Had chosen thus to fling his soul

Upon the growing gloom.

 

So little cause for carolings

Of such ecstatic sound

Was written on terrestrial things

Afar or nigh around,

That I could think there trembled through

His happy good-night air

Some blessed Hope, whereof he knew

And I was unaware.

 

Thomas Hardy – Poet & Author – 1840-1928

 

 

Saturday’s National Hunt racing fixtures were of the highest quality. After a horribly controversial week on personal issues, Bryony Frost did her talking on the back of Paul Nicholls’s ‘Greanateen’ who beat Willie Mullins’s hotpot ‘Chacun Pour Soi’ into fourth place in the Tingle Creek at Sandown at 12/1. A two- mile chase run at breakneck speed is a magical ‘sight for sore eyes!’ Aidan Coleman won a pulsating contest in the 3 miles 1 furlong ‘Becher Chase’ over the National fences at Aintree by a ‘short head’ on Snow Leopardess at 4/1. What sorting fayre for a Saturday afternoon!

Its all ‘down to the wire’ next Sunday in deciding who will win this year’s F1 Championship. Sir Lewis Hamilton won the Saudi Arabia Grand Prix in Jeddah yesterday, leaving him tied at the top of the leader board with Max Verstappen on 369.5 points. The final race takes place in Abu Dhabi next Sunday 12th December 2021.

 

INDEX

29th November

3rd December

% gain/loss

FTSE

7044

7122

+1.11%

DAX

15418

15169

-1.61%

CAC 40

6831

6765

-0.96%

DJIA

35017

34580

-1.25%

S&P 500

4628

4538

-1.95%

NASDAQ

15719

15085

-4.03%

Shanghai

3528

3607

+2.23%

Hang Seng

23910

23766

-0.60%

Nikkei 225

28337

28029

-1.09%

 

OMICRON is not a word, that too many people would like to pronounce, with six pints of ‘Theakston’s Old Peculiar’ on board. I find it hard enough to say, stone cold sober! However, Omicron, the fresh variant of this debilitating pandemic, probably developed, and subsequently nurtured in Southern Africa, whose efficacy remains unknown, has certainly taken its toll, medically, socially, and economically across the world. Of that there is no doubt. The contradicting comments, made by the scientists and immunologist boffins from the major vaccine titans, as to how virulent this variant may be, has provided governments and the media with the necessary inconsistency to create waves of hysteria and fear. This has been a remarkably successful exercise, which equity markets have violently objected to. There was a school of thought that felt that US markets were already quite frothily over-valued. Notwithstanding those views held, the level of volatility during last week was excessive; the phrase ‘headless chickens’ immediately sprung to mind!

Apart from the FTSE 100, which banked modest gains thanks to decent performances throughout the week by energy stocks and most financials and the Shanghai Composite, whose behaviour is contrary at the best of times, the rest of the global indices finished the week in negative territory, with the tech heavy NASDAQ suffering the ‘whips of scorn and time!’ Just to put a bit of colour on that market, the following stocks eased as follows last week – Tesla -7.7%, Amazon -4.5%, Facebook -8.8%, Twitter -18%, Microsoft -3.5%, and ‘Zoom’ -15.1%. Investors continued to ruminate over rampant inflation and the continuing real threat of higher interest rates next year, Economic data postings were focused on Initial Jobless Claims and US non-farm payrolls.

Jobless claims for the week ended 27th November totalled 222,000 against estimates of 240,000. That number was higher than the 194,000 from the previous week, which was the lowest total since 1969. Continuing claims dropped below two million for the first time since the early days of the pandemic. US Nonfarm payrolls increased by 210,000 in November, following a gain of 546,000 the previous month. The number was well below Wall Street’s expectations of 573,000. Despite the big hiring miss, the unemployment rate fell to 4.2%, a 0.4% percentage point decline that came even with rising labour force participation. Professional and business services and transportation and warehousing led gains, while hiring in leisure and hospitality was sluggish and retail lost jobs despite the traditional holiday hiring season.

Here in Old Blighty the Nationwide informed us that house prices have increased on an annualised basis by 10%. On a more depressing note, the UK’S manufacturers have seen price rises grow at their fastest pace in three decades, as supply chain and shipping woes rumble on. Also, car output suffered its worst October in 65 years, with only 64,779 coming off the production line – down 41% compared to last year. Electric and hybrid cars made up 30.9% of all production However, according to the OECD, the UK’S economy is set to outpace the rest of the G7. The UK’S GDP is forecasted to grow by 6.9% in 2021, up from 6.7% in September with the US only expected to grow at 5.6% over the same period, down from 6%, with the EU estimated to grow by 5.2%. The EU imposed €344 million of fines on banks, including Barclays, HSBC, RBS, UBS, Credit Suisse for currency trading collusion. The EU let it be known that it is demanding access to the huge influential derivatives markets in London. Relationships between the two parties will need to improve for the UK to respond positively to the EU’S demands. Black Friday’s footfall on the high streets declined by 19.6% on two years ago. Retail parks saw footfall decrease by 4.1% on November 2019, 3.7 percentage points below last month’s rate. Black Friday itself saw a decline of 23.4% on 2019, but footfall was still 35.3% higher than the previous weekend.

Talking of IPOS in the US, Rivian, a manufacturer of electric trucks came to the New York market this month, with a valuation of $100 billion, with very scant production, no profits and little in the way of cash flow. Its valuation is greater than Ford, which generated $120 billion of sales last year and $6 billion profit. Grab, Singapore’s answer to Uber, made a $40 billion market debut in New York last week, Jack Dorsey, the founder of Twitter served notice to leave the company. He is purported to be worth $12 billion, which includes his stake in Square, the payment company. Mr Dorsey is thought to be focusing his future business acumen on Bitcoin development.

Earnings and trading updates were in limited supple in the UK last week, though it was good to see encouraging outlooks from Ryanair and Wizz Air for 2022. Marston’s the brewers further increased their losses to £100 million from £22 million a year earlier. Halfords paid £62 million to buy Axle, a tyre servicing group to complement its ‘National’ tyre operations. Halfords intends to glean 70% of its business from motoring sales, rather than relying on bicycles. Pets At Home employees could be sitting on a paper profit of £11.7 million from a saving scheme, which could benefit 21000 of them. Wise, the global payments operation, which came to the market last July, valued at £8 billion, rather lost its way when one of its founders engaged in a tax dispute, resulting in a sale of shares, which damaged the share price. There is good guidance for revenue growth, which could come in at 30% for next year. However, its shares continue to remain 22% below its issue price. Sir Martin Sorrell’s S4 Capital completed its 12th transaction in eleven months, when buying Maverick Digital for an undisclosed amount.

A slew of deals was negotiated or completed last week. Abrdn bought Interactive Investors from JC Flowers for £1.49 billion. US Private equity, in the form of Triton Investment Management swooped on Clinigen, a drugs firm in Burton-on-Trent, quoted on AIM for £1 billion. SS&S agreed to buy Blue Prism, a robotic process automation pioneer for £1.2 billion, having previously flirted with Vista, another private equity titan. The Weston family expect to sell its Selfridges empire for close to £4 billion to Thailand’s Central Group, having bought the flagship Oxford Street store for £598 million in 2003 from the Clore family. Vittorio Radice may well return to the fold, which he so successfully managed for two decades.

The decline in recent years of BT’s share price seems to have made the telecom titan a plaything for international billionaires, triggering interest from Patrick Drahi, the French raider who now owns a 12% stake in BT. It was also rumoured that Mukesh Ambani of Reliance fame could also be a stalker. His involvement has been strongly denied. Drahi certainly wants BT to be split to offer greater shareholder value, in the hope that Openreach’s goal of providing broadband for twenty-five million users by 2026. BT’S shares are up 20% since the beginning of the year, admittedly from an incredibly low level. The unsavoury deal involving LV’s takeover by Bain Capital for £530 million was further complicated over Chairman Alan Cook’s suitability to continue in the job, because of his previous involvement as boss of the Post Office, which oversaw the prosecution of 161 innocent postmasters.

TSB is to shut a further seventy branches, making a total of 330 in for years, leaving 150 staff vulnerable. Just 220 branches of TSB remain open. The banking sector has closed 4369 branches since the start of 2019. Virgin Atlantic, which has already seen help from its bankers as well as Sir Richard Branson, who has sold shares in his Galactic empire, totalling £15 billion, is seeking another £400 million to shore up its balance sheet in very tricky flying conditions, with Covid rocking the foundations of airlines’ future. Stephen Hester, formerly CEO of RBS and RSA until it was recently sold to Danish owners, takes up his role as chairman of easyJet, which posted a loss of £1.14 billion last week. It is thought that his appointment will be bring stability to the short haul operator and support for its CEO Johan Lundgren. Will Shu, CEO of Deliveroo has sold £47 million of shares to settle a tax bill. This action took Deliveroo’s share price down by 7.6% last Wednesday. Marta Ortega, the daughter of Inditex’s founder Amancio Ortega, the Spanish owner of Zara and Massimo Muti, is to become its next chairman, It is thought that Walgreen is considering offloading Boots in an IPO in London, with a valuation of £5 billion. Finally private equity mogul, CVC, is considering IPOS for Six Nations Rugby and RAC roadside with a price tag of £11 billion.

Next Monday’s ‘Weekly Faye’, 13th December 2021, will be my last. After 23 years, its time to move on, before I outstay my welcome. Thank you for indulging me for all these years. I have so enjoyed compiling comment , which I hope has been of interest.

UK Companies posting earnings this week – Tuesday – Paragon Bankers, Ixico, CareTech, Babcock International, Wednesday – SSP, Berkeley Group, Quiz, McColl’s, Thursday – Moon pig, DS Smith, Balfour Beatty, Rolls Royce

US companies posting interim results this week – Tuesday – Autozone, Toll Bros, Casey’s General Stores, Game Stop, Wednesday – Campbell Soups, Thursday – Oracle, Costco, Broadcom, Hormel Foods, Vail Resorts, Ciena, Friday – Johnson Outdoors

Economic data to be posted this week – Monday – UK PMI Construction, Tuesday – UK Retail Sales, Halifax House Prices, Germany ZEW, US Consumer Credit, Wednesday – US MBA Mortgage Applications, US Crude Oil Inventories, Thursday – UK RICS Housing Market Data, US Initial Jobless Claims, US Wholesale Inventories, US Continuing Claims, EU GDP, Friday – UK Balance of Trade, UKGDP, UK manufacturing & Industrial Production, US CPI, US University of Michigan Consumer Confidence