Weekly Newsletters

01 October 2021 | William Buckhurst

That Was The Week That Was

MACRO

  • In the US, we saw higher bond yields, a stronger US dollar and a mini sell-off experienced by growth stocks
  • Annual inflation in Germany rose to a 29-year high of 4.1%
  • Vietnam loosened its strict lockdown measures in Ho Chi Minh City after a record 6.2% quarterly drop in GDP

STATISTIC OF THE WEEK

For the past decade Q4 has traditionally been the strongest quarter for Chinese stock markets. Within that quarter, October has been the best month, rising a mean 3.6% since 2011. Indeed, Chinese equities have finished October in the black 80% of the time over the ten-year period

COMPANY NEWS

  • Terry Leahy and the private equity firm Clayton Dubilier and Rice emerge victorious in the three-month long bidding war for Morrisons
  • AO World shares fell as they revealed that driver shortages and supply chain disruptions had hurt revenues
  • Diageo said the current year started well with North America performing strongly despite supply chain problems and Europe recovering ahead of expectations after the lifting of Covid restrictions
  • At the ASML capital markets day, the company stated that it expected annual revenue of €24-€30bn by 2025, up from its prior expectations of €15-€24bn with gross margins expected to reach 54-56% over the same period. Management commented that they continued to expect to return significant cash to shareholders via growing dividends and share buybacks

SMALL-CAP NEWS

Like the rest of the market the latest results are really under pressure as some Covid beneficiaries no longer have the wind in their sails. This was in clear focus as Boohoo, the online retailer, announced that their revenues had grown by 20%. This was 10% lower than the 30% the analysts were expecting, and the shares dropped heavily during the day. In the same vein, Avacta, the company that become synonymous with Covid testing, has seen its shares halve from their highs but still showed good underlying progress across its businesses. The diagnostics business has validated its fast and accurate AffiDx lateral flow test and product has now been shipped. AffiDx has also been shown to detect several variants with specific advantages. The therapeutics business has progressed AVA6000 into clinical trials and the AffyXell joint venture with Daewoong Pharmaceuticals has raised $7.3m in a Series A venture round.

THIS WEEK IN HISTORY

1960: City commuters’ “favourite” The Drain is completed and starts transporting early risers from Waterloo to Bank

2008: $5bn in assets is withdrawn from Wachovia Bank in one day before it is seized by the US government and sold to Wells Fargo

RE-OPENING TIMES

Prices of peas in Canada have more than doubled as the world’s largest producer suffered sharp declines in production after the worst drought in a century. Alongside Canada, Europe has suffered from low yields and in France, another large pea-producing country, the crop has been severely damaged by wet weather during the harvest leading to rising costs for plant-based meat producers here and across the pond

MARKET DATA

% returns

1 Week

1 Month

1 Year

5 Years

UK Equities (% return GBP)

0.85

-0.36

25.48

22.22

World Equities (% return GBP)

-1.66

-2.28

22.80

88.32

10 Year US Treasury Yield (%)

1.46

1.31

0.68

1.63

GBP / USD (fx rate)

1.35

1.38

1.29

1.30

 As at 1st October 2021. Source: Financial Express

 

 

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