Weekly Newsletters

28 August 2020 | William Buckhurst

That Was The Week That Was

MACRO

  • A major shift in rhetoric from the Federal Reserve who said that inflation will be able to move out of the 2% range thereby increasing the likelihood that interest rates will remain lower for longer
  • US bond yields reach their highest point since mid-June and the dollar was weaker
  • Japanese Prime Minster Abe, the architect of corporate and economic reforms in Japan, announced he will be stepping down for health reasons

STATISTIC OF THE WEEK

This week saw the most significant changes to the Dow Jones Industrial Average Index in years as three new companies joined the 30-strong index. The most notable change was the eviction of 100+ year veteran Exxon Mobil to be replaced by Salesforce.com

COMPANY NEWS

  • Jack Ma’s Chinese payments company Ant Group filed documents for an IPO which could raise a record $30bn in new equity
  • Veolia, the French water and waste management group, offered to buy 29.9% of Suez held by utility group Engie as a prelude to launching a full bid
  • Provident Financial reported a 13.4% decline in its loan book to £1,878m which drove a 12.5% reduction in revenue to £411.4m; but said that surplus capital is now 44% of its market capitalisation

SMALL-CAP NEWS

The translation companies SDL and RWS unveiled plans for a merger this week which had been a rumour for years; and MelodyVR, the musical virtual reality company, bought the American firm Napster – one of the first companies to see music as MP3s rather than vinyl/compact discs.

THIS WEEK IN HISTORY

1857: Following the revelation that a cashier at Ohio Life Insurance had embezzled nearly all of the company assets, the ensuing stock market panic causes what was at the time the worst financial crisis America had ever seen

2014: The S&P 500 Index closes above 2,000 for the first time

 RE-OPENING TIMES

The price of a peanut has fallen to multi-year lows as the disruption to airlines, hotels and pubs has created a supply glut and lack of demand. Benchmark US almond prices have fallen about 40% this year, while walnuts are down 18% and cashew nuts down 10%. But a 90g pack of toasted pine nuts in Waitrose still costs £4.

MARKET DATA

% returns

1 Week

1 Month

1 Year

5 Years

UK Equities (% return GBP)

-0.65

-2.37

-14.97

13.08

World Equities (% return GBP)

0.74

3.88

8.48

87.71

10 Year US Treasury Yield (%)

0.74

0.59

1.47

2.19

GBP / USD (fx rate)

1.34

1.29

1.22

1.54

 As at 28th August 2020. Source: Financial Express

MACRO

  • A major shift in rhetoric from the Federal Reserve who said that inflation will be able to move out of the 2% range thereby increasing the likelihood that interest rates will remain lower for longer
  • US bond yields reach their highest point since mid-June and the dollar was weaker
  • Japanese Prime Minster Abe, the architect of corporate and economic reforms in Japan, announced he will be stepping down for health reasons

STATISTIC OF THE WEEK

This week saw the most significant changes to the Dow Jones Industrial Average Index in years as three new companies joined the 30-strong index. The most notable change was the eviction of 100+ year veteran Exxon Mobil to be replaced by Salesforce.com

COMPANY NEWS

  • Jack Ma’s Chinese payments company Ant Group filed documents for an IPO which could raise a record $30bn in new equity
  • Veolia, the French water and waste management group, offered to buy 29.9% of Suez held by utility group Engie as a prelude to launching a full bid
  • Provident Financial reported a 13.4% decline in its loan book to £1,878m which drove a 12.5% reduction in revenue to £411.4m; but said that surplus capital is now 44% of its market capitalisation

SMALL-CAP NEWS

The translation companies SDL and RWS unveiled plans for a merger this week which had been a rumour for years; and MelodyVR, the musical virtual reality company, bought the American firm Napster – one of the first companies to see music as MP3s rather than vinyl / compact discs.

THIS WEEK IN HISTORY

1857: Following the revelation that a cashier at Ohio Life Insurance had embezzled nearly all of the company assets, the ensuing stock market panic causes what was at the time the worst financial crisis America had ever seen

2014: The S&P 500 Index closes above 2,000 for the first time

RE-OPENING TIMES

The price of a peanut has fallen to multi-year lows as the disruption to airlines, hotels and pubs has created a supply glut and lack of demand. Benchmark US almond prices have fallen about 40% this year, while walnuts are down 18% and cashew nuts down 10%. But a 90g pack of toasted pine nuts in Waitrose still costs £4.

MARKET DATA

% returns

1 Week

1 Month

1 Year

5 Years

UK Equities (% return GBP)

-0.65

-2.37

-14.97

13.08

World Equities (% return GBP)

0.74

3.88

8.48

87.71

10 Year US Treasury Yield (%)

0.74

0.59

1.47

2.19

GBP / USD (fx rate)

1.34

1.29

1.22

1.54

As at 28th August 2020. Source: Financial Express

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