WEEKLY FAYRE – Monday, 8th November 2021

November 8, 2021

“With proud thanksgiving, a mother for her children,

England mourns for her dead across the sea.

Flesh of her flesh they were, spirit of her spirit,

Fallen in the cause of the free.


Solemn the drums thrill; Death august and royal

Sings sorrow up into immortal spheres,

There is music in the midst of desolation

And a glory that shines upon our tears.


They went with songs to the battle, they were young,

Straight of limb, true of eye, steady and aglow.

They were staunch to the end against odds uncounted;

They fell with their faces to the foe.


They shall grow not old, as we that are left grow old:

Age shall not weary them, nor the years condemn.

At the going down of the sun and in the morning

We will remember them.


They mingle not with their laughing comrades again;

They sit no more at familiar tables of home;

They have no lot in our labour of the day-time;

They sleep beyond England's foam.


But where our desires are and our hopes profound,

Felt as a well-spring that is hidden from sight,

To the innermost heart of their own land they are known

As the stars are known to the Night;


As the stars that shall be bright when we are dust,

Moving in marches upon the heavenly plain;

As the stars that are starry in the time of our darkness,

To the end, to the end, they remain.”


Laurence Binyon – Poet – 1869-1943


It was very sad to see Yorkshire CCC drawn through the mire of racial bullying, which culminated in the Chairman, Roger Hutton, and other board members, resigning. This bastion of county cricket, which has only allowed people born outside the county play for it since 1992, has won 33 county championships; more than any other county. George Hirst, Wilfred Rhodes, Herbert Sutcliffe, Maurice Leyland, Sir Len Hutton, Hedley Verity, Fred Trueman, Brian Close and Johnny Wardle, amongst many others, will be turning in their graves at the thought of such shameful allegations.

Despite losing to South Africa, partly due to Jason Roy, failing to complete his innings, due to a hamstring tear, England and Australia are through to the semi-final of the T-20 World Cup. They will be joined by Pakistan and New Zealand. The semi-finals will be played this coming Wednesday, 10th November 2021.

So much has been written about Cop26. We are unlikely to know for years to come, whether it has been a success or not. Agreements have been made in principle over temperature goals and the use of coal. However, without the acquiescence of China and Russia and India’s time frame being 20 years later than most, measuring success will prove challenging.



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I think most investors were comfortable in the knowledge that the US 3rd quarter earnings were likely to keep the lid on any adverse effects the outcome of last Wednesday’s FOMC meeting and Thursday UK MPC Meeting. The market felt that they could cope with the content of these respective ‘Pandora’s Box’, provided it was not perceived to be too draconian. Of the 445 companies in the S&P 500 that have reported earnings to date for 3rd quarter up until 1st November, 80.7% have reported earnings above analyst estimates, according to Refinitiv. This compares to a long-term average of 65.8% and prior four quarter average of 84.7%.

Accordingly, when FED Chairman Jay Powell announced that there would be no change in rates until 2022, but the FED would start tapering quantitative easing, especially the facilities brought in to assist against the damage inflicted by Covid19, by cutting the purchase of Treasuries by $10 billion a month and mortgage-backed securities by $5 billion, equity acolytes were overcome with joy. Their euphoria was reflected in the record gains made by the three main US indices. Suffice to say Powell felt more data was required on inflationary threats and employment outlook before bringing in more stringent monetary policy. In passing, Friday’s non-farm payrolls provided further thrills for investors. 531,000 jobs were created in October, beating the estimate of 450,000. The unemployment rate fell to 4.6%, a new pandemic low and better than expectations. Wages rose 0.4% for the month and were up 4.9% from a year ago. Leisure and hospitality led job creation, followed by professional and business services and manufacturing.This good news followed in the wake of Thursday’s weekly initial jobless claims, which totalled 269,000 last week, the lowest pandemic-era total and better than the 275,000 estimate. However, productivity data was worrying, having plunged 5% in the third quarter, the biggest slump since 1981.

Last Friday Democrats set aside divisions between progressives and centrists to pass a $1 trillion package of highway, broadband and other infrastructure improvement, sending it on to President Joe Biden to sign into law. The 228-to-206 vote late on Friday is a substantial triumph for Biden's Democrats, who have bickered for months over the ambitious spending bills that make up the bulk of his domestic agenda. The world at large awaits the outcome of US climate change Bill.

Many market professionals and economists felt that they had been misled by Governor Andrew Bailey over an expected interest rate rise, which never transpired last Thursday. The MPC voted to keep rates unaltered at 0.10%, with Michael Saunders and Sir Dave Ramsden dissenting. The committee voted 9-0 to keep quantitative easing unaltered at £875 billion. I think that the perception held that a rate rise last Thursday was ‘nailed-on’, was a little harsh, as the Governor has always maintained that inflation, which is now expected to reach 5% - perhaps even more by the end of the year – may still be transitory, with PPI now showing signs of easing back. If the supply chain congestion were to iron itself out in the next 6 months, that may well be the case. Andrew Bailey is, of course, concerned about inflation and the labour market. He has always maintained that rates will go up, but it was always a question of timing. The MPC felt that if the recovery process was under way, heading towards 6% in 2021, why ‘throw the baby out with the bath water’ by increasing rates, which could further damage the consumer who has been larupped with increased food prices, oil, gas, and the servicing of mortgage payment. Disposable income has been damaged and that would affect growth in the long term.

Europe and the UK has seen car manufacturing suffering at the hands of the supply chain and a shortage in the workers. According to the SMMT, only 106,265 new cars were registered in the month of October, a year-on-year fall of 25% - the lowest level since 1991. Electric car sales made up 16% of the total manufactured.

Unsurprisingly Pfizer posted stellar earnings last Tuesday. Sales for the last quarter on the Covid vaccine, which in partnership with BioNtech, reached $13 billion and for the year, is likely to reach $36 billion. Pfizer’s shares are up 32.5% year to date.

Despite the conclusion of the European banking sector earnings season the week before last, results posted by UBS and Societe Generale last week were positive. So were those posted by Standard Chartered Bank whose profits for the quarter doubled to $996 million, partly due to a cut in impairment charges. CEO Bill Winters insists that the bank is not over committed to lending to the Chinese property sector. There was also a slew of other banking stories, headed by Barclays’ Jes Staley having to resign his position as CEO with indecent haste. The FCA found in their investigation, conflicting interpretations over his professional relationship with Jeffrey Epstein. Mr Staley could pick up emoluments totalling an eye-watering £22 million. For the time being TSB and Coop Bank will not merge and the former’s CEO, Debbie Crosbie is in the frame to become the new CEO of Nationwide. Virgin Money will be making cost savings totalling £175 million which will include closing 31 branches and making 112 staff redundant. Profits were up from £124 million to £801 million in the last year. Virgin, of course, bought CYB Group. Metro Bank is likely to be bought by US private equity in the form of the Carlyle Group. Starling Bank, the banking ‘app’ with no branches, supported by Goldman Sachs, Fidelity and Qatar is likely to seek a public quotation in the next two years according to Anne Bodin, the CEO. The bank is valued at about £1.5 billion. Sadly, for London, New York is likely to be the beneficiary of this floatation.

There were strong earnings from Flutter, BT, and BP last week. In the case of BT, costs are to be cut by £1 billion, and a dividend has been reinstated. This should see off Altice’s Patrick Drahi’s takeover overtures. J Sainsbury posted a 0.8% increase in sales for the last quarter. Profits for the half year came in at £371 million and the supermarket is expected to make £660 in the year. Aldi, the German supermarket announced the opening of another 15 units, part of its plan to open one hundred in the next two years. NEXT continued its great performance, with sales up 17% for the last 13 weeks in comparison to 2019. On-line sales were up 40% for the same period. PurpleBricks had a ‘shocker’ last quarter losing market share of on-line house sales. It shares dived by 30% on Thursday.

JD Sports was incandescent with rage at having to sell Footasylum. JCB signed a multi-million hydrogen deal, by taking a 10% stake in Australia Fortescue Future Industries. Harland & Wolff, Belfast shipbuilders, have shown some innovation by agreeing to build renewable infrastructures valued at between £200-£300 million. With the price of oil ‘sky high’ at $82 a barrel, Saudi Arabia’s Aramco posted a profit of £22 billion for the last quarter. The 297000 shareholders in LV are being begged to turn down Bain Capital perceived derisory offer of £530 million plus £100 each to be taken over!

UK Companies posting earnings this week – Monday – Scottish Mortgage Investments, Sirius, Tuesday – AB Foods, Meggitt, Persimmon, Wednesday – M&S, Halfords, Aveva, MaxCyte, Thursday – 3iii, QinetiQ, Norcross, B&M, Burberry, Taylor Wimpey, WH Smith, Friday – Astra Zeneca

US companies posting interim results this week – Monday – AMC Entertainment, Coty, Hormel Foods, PayPal, Beyond Meat, Tuesday – BioNtech, DR Horton, Eastman Kodak, Wednesday – Peloton, Thursday – Walt Disney, Airbnb

Economic data to be posted this week – Tuesday – BRC Shop Prices Index, Germany ZEW Survey, US PPI, Wednesday – US MBA Mortgage Applications, US Crude Oil Inventories, Thursday RICS Housing Index, UK GDP, UK Balance of Trade, UK Industrial Production, US Initial Jobless Claims, US CPI, Friday – EU Industrial Production, US University of Michigan Consumer Confidence