Weekly Newsletters

29 October 2021 | William Buckhurst

That Was The Week That Was

MACRO

  • In the US, GDP growth slowed sharply in the third quarter, expanding 2% on an annualised basis
  • The ECB left interest rates and policy unchanged whilst stating that the existing pandemic purchase programme would run at least through until March 2022

COMPANY NEWS

A very busy week for company results:

  • Microsoft produced $45bn revenues for the quarter and guidance for next quarter above $50bn as cloud continues to grow exponentially. CEO, Satya Nadella, said "Digital technology is a deflationary force in an inflationary economy"
  • Alphabet earnings per share came in at $27.99, far ahead of analysts’ consensus expectation of $23.50 and up 71% from a year ago, driven by digital advertising
  • Visa lowered forecasts for 2022 to mid-teens revenue growth amid continued uncertainty around Covid, particularly global travel restrictions
  • Amazon missed top and bottom lines and gave cautious forward guidance
  • Merck released impressive quarterly results with sales for its cancer drug, Keytruda, up 22%
  • Newmont had a difficult quarter with costs rising and production affected by Covid related issues
  • Linde results showed they were fully able to pass on costs and talked about the enormous number of potential hydrogen contracts as well as a big LNG contract with Gazprom
  • Sony raised profit guidance reporting a 27% increase in sales in its game segment year-on-year

FUNDS

The shipping fund, Taylor Maritime, continues to look perfectly placed to benefit from global supply chain disruptions as it reported this week that net charter rates for second-hand “handysize” and “supramax” bulk carriers has increased to around $19,500 per day versus c$10,000 at the start of the year

SMALL-CAP NEWS

Kromek, the radiation detection solutions experts, announced that it has been awarded a seven-year supply agreement by an unnamed US based, sector-leading industrial OEM. The agreement for their contaminant detection solution, has a value of up to $17m over the life of the contract and is expected to commence shortly

THIS WEEK IN HISTORY

1929: a selling panic hits global stocks, first Black Monday followed by Black Tuesday, precipitating the Depression. US stocks fell 12.8% and 11.7% over the two days

1988: In an effort to diversify away from tobacco, Philip Morris (now known as Altria) purchases Kraft Foods for $13.1bn. The deal would be the second largest in American history at the time, just behind Chevron’s $13.3bn takeover of the Gulf Corporation in 1984

 RECORD TIMES

A slew of new records this week as Microsoft overtakes Apple to become the world’s biggest publicly traded company and Tesla adds $100bn to its market cap.  Tesla is now worth more than three times as much as Toyota, the second most valuable automaker, which has a market cap of about $280bn, and boasts sales and profits that dwarf those of Tesla. Elon Musk becomes the first person in the world to be worth more than $300bn

MARKET DATA

% returns

1 Week

1 Month

1 Year

5 Years

UK Equities (% return GBP)

0.66

2.36

35.75

23.40

World Equities (% return GBP)

0.71

2.22

30.49

85.68

10 Year US Treasury Yield (%)

1.55

1.52

0.85

1.86

GBP / USD (fx rate)

1.37

1.37

1.29

1.22

 As at 29th October 2021. Source: Financial Express

 

 

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