Weekly Newsletters

15 October 2021 | Charlie Todd

That Was The Week That Was

MACRO

  • In the US, the labour participation rate - people who have jobs or are actively looking for work - showed that it has stalled at a surprisingly low level even as the US economy recovers
  • Chinese authorities broke their silence on Evergrande saying the situation was “controllable”
  • Bitcoin headed back to near record highs after it was reported that American regulators would give the green light to a futures-based ETF linked to the digital coins

THE POLITICAL WEEK

JP Morgan chief executive Jamie Dimon defended his $31.5m pay in an HBO interview, saying his board would take offence if he asked for a pay cut. Speaking to co-founder of Axios, James VandeHei, Dimon said his pay was up to the board, who would be offended if he were to request a reduction

COMPANY NEWS

  • JP Morgan beat analysts’ profit estimates thanks to record revenue in investment banking and a brighter economic outlook that allowed them to release money it had set aside for potential loan losses during the pandemic
  • Apple said they would cut iPhone production targets due to the global chip shortage
  • LVMH reported forecast-beating third-quarter sales powered again by its all-important Louis Vuitton brand, which brings in the majority of group operating profit, and continued strong demand in the US and China

SMALL-CAP NEWS

ITM Power raised more equity from which it intends to deploy £170m of capex and £40m of working capital to support the semi-automation of Bessemer Park (UK’s first Gigafactory which was opened this year) and a full automation of a second facility in the UK as well as an international facility. The Group expects to expand its manufacturing capacity to 5GW by 2024. This raise comes against an increasingly positive legislative environment for hydrogen electrolysis with global national strategies outlining 149GW of required electrolyser capacity by 2030 with only 0.2GW installed globally as of September 2021. As we go into UN’s COP26 meeting in Glasgow next month we expect interest in this sector only to grow

THIS WEEK IN HISTORY

1982: the Dow Jones Industrial Average closes above 1,000 for the first time in nearly a decade, finally recovering from the brutal 1973-1974 recession

2008: stock markets soar on the announcement that central banks in Europe and the US would work in conjunction to provide liquidity to the world’s financial system

 RE-OPENING TIMES

No time to buy. THG (previously known as The Hut Group) had a rather disastrous Capital Markets Day focusing their fire on the shorters of the stock even though they only represent 1% of the holders. Shareholders were enjoying a Quantum of Solace post IPO as the shares traded higher. There is no doubt there are elements of the company that are good quality but the valuation since listing has always been a Moonraker. Pie Another (Capital Markets) Day at your peril…

MARKET DATA

% returns

1 Week

1 Month

1 Year

5 Years

UK Equities (% return GBP)

1.61

3.13

29.20

22.38

World Equities (% return GBP)

1.02

-0.16

21.70

82.13

10 Year US Treasury Yield (%)

1.59

1.31

0.74

1.80

GBP / USD (fx rate)

1.37

1.38

1.29

1.22

 As at 15th October 2021. Source: Financial Express

 

 

 

 

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