WEEKLY FAYRE – Monday, 6th September 2021

September 6, 2021

“Season of mists and mellow fruitfulness,
Close bosom-friend of the maturing sun;
Conspiring with him how to load and bless
With fruit the vines that round the thatch-eves run;
To bend with apples the moss'd cottage-trees,
And fill all fruit with ripeness to the core;
To swell the gourd, and plump the hazel shells
With a sweet kernel; to set budding more,
And still more, later flowers for the bees,
Until they think warm days will never cease,
For summer has o'er-brimm'd their clammy cells.

Who hath not seen thee oft amid thy store?
Sometimes whoever seeks abroad may find
Thee sitting careless on a granary floor,
Thy hair soft-lifted by the winnowing wind;
Or on a half-reap'd furrow sound asleep,
Drowsed with the fume of poppies, while thy hook
Spares the next swath and all its twined flowers:
And sometimes like a gleaner thou dost keep
Steady thy laden head across a brook;
Or by a cider-press, with patient look,
Thou watchest the last oozings, hours by hours.

Where are the songs of Spring? Ay, where are they?
Think not of them, thou hast thy music too,--
While barred clouds bloom the soft-dying day,
And touch the stubble-plains with rosy hue;
Then in a wailful choir the small gnats mourn
Among the river sallows, borne aloft
Or sinking as the light wind lives or dies;
And full-grown lambs loud bleat from hilly bourn;
Hedge-crickets sing; and now with treble soft
The redbreast whistles from a garden-crof.t,
And gathering swallows twitter in the skies.”

John Keats - poet – 1795-1821


It has been a great month for sport. Considering there were no crowds for the Tokyo Olympics, both have been huge unqualified successes. The Olympic medal tally was (65 medals won by GB - 4th place) and Paralympics (121 medals won by GB 2nd place behind China).

The Headingly test match, won by an innings and 76 runs, against India was a tremendous comeback by England, who had been soundly trounced at Lord’s. At the Oval on the last day, today, England require 290 to win – a tall order, even though the wicket looks benign. England’s batting, at best, looks brittle. May I prove to be wrong! This has been the most amazing series of test cricket.

England won its World Cup qualifiers against Hungary in Budapest 0-4, and beat Andorra 4-0 yesterday. ‘The Three Lions’ are six points clear in its division!



31st December 2021

30th August 2021

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S&P 500





















In recent years August, as a broad generalisation from a stock market perspective, has been a month it has been inadvisable to be away on holiday. This August proved to be no exception to the recent rule. It has certainly thrown up some thorny political, economic, and corporate issues. Stock markets, despite the Afghanistan debacle, continued to blaze the trail in the US, with the S&P 500 adding 3% last month and the NASDAQ Composite +3.94% respectively, thanks to not inconsiderable help from dovish comments made by FED chairman Jay Powell on his measured approach to tapering quantitative easing and a reluctance to raise interest rates at the Jackson Hole central bankers’ meeting. The economy is growing, but the labour market is still brittle. Powell is concerned that moving unnecessarily quickly on these issues, could precipitate the throwing of the proverbial economic ‘baby out with the bath water’, thus causing irrevocable damage to the recovery process. The initial Jobless data continues to improve on a weekly basis. Last week only 340k people applied for benefits – the lowest number since the start of the pandemic. Notwithstanding Thursday’s news on claims, Friday’s non-farm payrolls were very disappointing and way short of expectations (by 500k) – 235k jobs were created in August. This dispiriting number was largely down to a spike in the ‘Delta Variant’ and a drop in entertainment activity. The unemployment rate remained at 5.4%. On the plus side, last Wednesday, the US was pleased to be the recipient of decent ISM Manufacturing, which came in at 59.9 (EST: 58.5).

However, the US Government is far from on top of this Covid pandemic and there is little doubt that it could still take its toll on growth. So those market luminaries, who are of the opinion that 7-8% GDP is ‘nailed on’ for 2021, may have to rethink. Certainly, retail has failed to recover in the UK and to some degree in the US, at the rate many thought it might. Consumers have squirreled away billions in the last year. However, their spending and culture habits have changed. Sartorial elegance is no longer a prerequisite. People want to have a good time; two holidays a year, visits to the pub, and to restaurants. Consumers are happy to run round in shorts, sneakers and bobby socks. It is interesting to note that the UK has lost 83% of its store units in the last 5 years – down to the change in these spending habits, on-line sales, and the pandemic. It is unlikely that we shall see a measurable recovery. There has also been a sharp drop in tourism, especially in London – the level of traffic is down 10% on pre-pandemic levels of 2019. I am surprised it’s not more than that! Of course, people are coming from around the UK to London in greater numbers than usual.

In passing, Peloton sales have taken a terrific upturn, with the cost of buying these bikes falling sharply – all part of living habits changing. Inflation remains a serious temporary problem, with the global supply chain very short on chips, raw materials, food, and lorry drivers. Chip supplies for the UK auto industry were down 37% in July. The FED Chairman insists inflation is a temporary blip that should be ironed out in the next 6 months. Many observers need convincing that this inflationary journey will not last rather longer. Helen Thomas of Blondemoney makes a very credible point in her summary of the Jackson Hole meeting “In short: there are problems with inequality that can't be solved by the new average inflation targeting regime, whilst all the huge intervention has blurred central bank independence and raised financial stability risks!”

Talking of inflation, we have a new Chief economist at the Bank of England – Huw Pill. Mr Pill is an Englishman, who has cut his economic teeth on a branding iron with Goldman Sachs and then at an extended stay at the ECB, as Chief European economist. The Goldman Alumni remains very powerful in the UK with Chancellor Sunak also a member. Along certain corridors, it is thought that Mr Pill could ruffle a few feathers in Threadneedle Street, allegedly expressing concern at the global magnitude of QE. 'The Old Lady' has pumped £895 billion into QE and has flirted with negative interest rates. Former MPC member Andrew Sentence said quizzically “If Huw Pill challenges the ‘group-think’ at the Bank of England, that would be seen as positive. However, his pedigree (Goldman and the ECB) casts doubt on whether that will be the case. Finally on inflation, CNBC’s Geoff Cutmore made this observation on the US housing boom: “house prices in the US are 41% higher than they were in 2006 and that takes in to account the banking credit crisis of 2008/9.”

This has not been a great two weeks for the Biden administration. The manner the US took its leave from Afghanistan left a great deal to be desired. President Biden was condemned internationally. The US seems to have lost its way in the foreign affairs arena, handing the initiative to China and Russia. Both Presidents Xi and Putin must have laughed like jackals at the US President’s naïve handing of the withdrawal. Biden has further thrown the kitchen sink at the pandemic with help totalling almost $5 trillion. Young Americans are going to have to service and repay this eyewatering amount of debt. The mind boggles!

However, despite the US dropping down the ladder in terms of international respect, as an economic unit, it is bursting in innovation and has no peer in the realm. Just look at the performance of its stock markets since the beginning of the year, with both the S&P 500 and the NASDAQ breaching record levels. The S&P 500 has added 96% in value since 20th March 2020 and the NASDAQ Composite a staggering 122.8% in the same period – such has been the power of Apple, Alphabet, Amazon, Microsoft, Zoom and Facebook, not forgetting copious smaller pioneering technological operations. The market has also seen a slew of IPOs coming to market in the US, China, Hong Kong, and the UK. The global indices tables above make interesting reading, especially the US, with Asia suffering from political issues and covid related problems.

Here in London, there are many companies waiting to list including Eurowag, valued at £1.5 billion, Blackfinch Renewable European Investment Trust valued at £300 million and next year Klarna, the Swedish online financial services operation including payments for online storefronts and direct payments along with post-purchase payments and TPG are expected to come to market.

Cazoo enjoyed a decent IPO debut, The company was valued at $7 billion, and its shares went to a 7.6% premium to $9.38. Sadly, Alex Chesterman chose to float the company in New York rather than London, probably down to having key US shareholders. One key shareholder was DMGT, which sold 132 million shares in Cazoo and may take the opportunity of some taking its newspaper operations private.

There were many corporate deals being negotiated and consummated in August. Following in the wake of the Morrison takeover by either Clayton Dubilier & Ryan or Fortress for £7 billion, which the CMA will shortly rule on, there followed major speculation, it was rumoured that private equity was turning its attention in the direction of Sainsbury’s, causing its share price to bounce by 14%. It now transpires that Tesco, the largest of the UK’s supermarkets with 27.4% market share, is considered by key retail analysts to be the most attractive asset for private equity with the likes of Blackstone, KKR and CVC all possibly considering their options.

Private equity, especially from the US, have been aggressive predators for perceived cheap UK assets; hence the capitulation of the likes of Cobham and Ultra Electronics, with Meggitt looking very vulnerable. Michael Murray, Mike Ashley’s son-in-law to be is in line to make £100 million if Frasers’ share price was to reach £15.

A British businessman has been arrested in Singapore over alleged links to a fraud connected to collapsed German payments group Wirecard. Henry O’Sullivan, an adviser to Wirecard in Asia, is facing ten years in prison, a fine or both for his role in sending a false letter to one of the firm’s subsidiaries in the Middle East. O’Sullivan, 46, has been accused of instructing Singaporean company Citadelle Corporate Services to forge a letter that claimed it was holding £74million in an escrow account in 2016.

CMC Markets performed spectacularly well during the Covid crisis, boosted by workers sitting at home with increased saving pots and more time on their hands than ever. But yesterday the online platform – set up by Cruddas in 1989 with just £10,000 – said trading activity had plummeted during the summer months following on from a slow first quarter. Due to a measurable drop in volumes during the summer months, CMC MARKETS' share price has dipped sharply from 420p315p 105.00 (-25.61%) in the past 5 days.

easyJet has made a bold decision in appointing the controversial Stephen Hester to succeed John Barton as chairman. The former CEO of RSA also held the post of CEO of RBS in 2009, until he fell out with the then Chancellor, George Osborne, over future policy.

UK Companies posting earnings this week – Monday – Dechra Pharmaceuticals, Tuesday – McBride, Safestore, Ted Baker, Wednesday – Biffa, Thursday – Genus, Go-Ahead, Computacenter, Funding Circle, Wm Morrison, Spire Healthcare

US companies posting interim results this week – Tuesday – Casey’s General Stores, Wednesday – Gamestop, Oracle, Korn Ferry, Thursday – American Outdoor Brands, Friday - Kroger

Economic data to be posted this week – Monday – UK PMI Construction, Tuesday – UK Retail Sales, Halifax House Index, Wednesday – US MBA Mortgage Applications, EU GDP, ECB Meeting, US Crude Oil Inventories, US Consumer Credit, Thursday – RICS House Market Survey, US Initial Jobless Claims, Friday – UK Manufacturing outcome & Industrial Production, UK GDP, UK Balance of Trade, US PPI & CPI