21-06-04: That Was The Week That Was

Weekly Newsletters

04 June 2021 | William Buckhurst

That Was The Week That Was

MACRO

In the UK, a new business survey showed nine in 10 hospitality bosses expect to face staff shortages this year
Eurozone CPI for May rose 2% and was up on the prior reading of 1.6%. Inflation hit 2% for the first time since 2018 as European economies begin to reopen from COVID related shutdowns
Chinese central bankers announced plans to stem the strengthening of the renminbi by raising Chinese financial institutions’ required foreign currency reserves from 5% to 7%

STATISTIC OF THE WEEK

New data out showing the cost of used cars and trucks in the US jumped 10% last month on month in April and was up 21% over the year. The upsurge in prices has been triggered by a slowdown in production because of lockdowns and semiconductor shortages. While at the same time, unusually for a recession, the number of customers who defaulted on vehicle finance and had their car repossessed has declined, cutting off another source of supply for dealers

COMPANY NEWS

BT was in the spotlight after it was reported that investment group LetterOne was backing a plan to build out its own fibre broadband network. LetterOne is controlled by Russian billionaire Mikhail Fridman and has agreed to finance new broadband infrastructure firm Upp to build out regional broadband networks in the UK to compete directly with BT
Abbott Laboratories finished down this week after lowering its full year guidance. Abbott gave new earnings guidance below consensus and down on its prior forecasts noting that demand is being impacted by factors that include recent health authority guidance on testing for fully vaccinated individuals
Shares in Nvidia finished the week higher after CEO Jensen Huang commented that he was confident that regulators would approve its acquisition of Arm

SMALL-CAP NEWS

Thinking of doing any building work? The construction sector seems to think a lot of us will be as Michelmersh (bricks) said its performance has continued to be robust and production volumes have been ahead of expectations. Elsewhere both Breedon Aggregates and Brickability announced some acquisitions with Express Minimix, a mini mix concrete operator based out of Durham and Taylor Maxwell, a supplier of timber (58%), bricks (31%) and masonry (11%) respectively. The latter was a far larger deal with a consideration of £63m (£40m in cash, £10m in Brickability shares and a deferred consideration of up to £13m).

THIS WEEK IN HISTORY

1720: One of the greatest speculative bubbles in history nears its peak, as the South Sea Company shares jump to from £595 to £720

1985: RJ Reynolds Tobacco reaches an agreement to buy Nabisco for $4.9bn

RE-OPENING TIMES

One of the last great British institutions falls into foreign hands as the Jammie Dodger and Wagon Wheel (made by Burtons Biscuits) are sold to Nutella maker Ferrero for an undisclosed sum

MARKET DATA

% returns	1 Week	1 Month	1 Year	5 Years
UK Equities (% return GBP)	0.73	2.63	14.72	35.16
World Equities (% return GBP)	0.28	0.34	22.07	104.83
10 Year US Treasury Yield (%)	1.55	1.61	0.82	1.71
GBP / USD (fx rate)	1.42	1.39	1.26	1.45

As at 4^th June 2021. Source: Financial Express

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