Weekly Newsletters

19 November 2021 | William Buckhurst

That Was The Week That Was

MACRO

  • In the US, the Fed chairmanship is seen as finely balanced between a new term for Jerome Powell or Lael Brainard who is seen as more dovish than the incumbent
  • In Japan, the latest lockdowns resulted in a much sharper than expected contraction in GDP for the third quarter, increasing speculation around larger government stimulus packages
  • US manufacturing output surged to 1.2% last month, its highest level since March 2019, with particularly strong expansion for the automotive sector as supply chain issues are seen to be easing somewhat
  • In the UK, inflation reached 4.2%, the highest rate since 2011

THE POLITICAL WEEK

Rather depressingly after COP26, new data shows that disruptions to scheduled flights has resulted in more than 4.2m private jet flights taking place this year.  In the first week of November, they were up 54% on the same period last year, and up 16% on 2019. NetJets has reported the highest demand for flying in its near 60-year history and is investing about $2.5bn in 100 new aircraft

COMPANY NEWS

  • Cisco shares were down, slight miss on the top-line and lowered guidance but against a backdrop of very strong order growth
  • Diageo said that it anticipated organic sales growth of at least 16% in the first half of 2022
  • Nvidia easily beat consensus forecasts with revenue up 50.1% year on year with adjusted gross margins of 67%
  • Halma’s interim results were strongly ahead but guidance remained cautious, reflecting increased supply chain disruption
  • Visa shares fell after Amazon announced plans to ban Visa credit cards from its platform
  • Unilever hived off their teas business to CVC Capital for €4.5bn

SMALL-CAP NEWS

A few profit warnings this week led to some heavy falls for both Naked Wines and McColl’s. Although the client retention at the wine company was good, their 5-year forecast payback for new customers fell from 2.3x to 1.7x and sales guidance was lowered. Management have completed a remodelling of its US fulfillment network and continues to believe it can achieve medium-term sales growth of 20% per annum with EBIT margins at excess of 10% - thirsty work!

Things were looking up for McColl’s, however, they warned of supply chain disruption impacting availability on key impulse lines in the fourth quarter

THIS WEEK IN HISTORY

  • 1972: The Dow Jones closes above 1,000 for the first time
  • 2001: Burlington Industries, once the largest textile maker in the world and 44th largest industrial company with $1.2 bn per year in sales, declares bankruptcy

 RE-OPENING TIMES

Sotheby’s saw its most valuable single-owner sale ever staged — and the most valuable auction held in its 277-year history. Real estate mogul Harry Macklowe and his wife, Linda, were ordered by a court in 2018 to sell their blue-chip art collection and split the proceeds, amid their divorce proceedings. The “Macklowe Collection,” as it became known, garnered $676.1m in sales

MARKET DATA

% returns

1 Week

1 Month

1 Year

5 Years

UK Equities (% return GBP)

-1.18

0.90

19.30

27.50

World Equities (% return GBP)

-0.50

5.47

26.63

94.62

10 Year US Treasury Yield (%)

1.54

1.65

0.86

2.34

GBP / USD (fx rate)

1.34

1.38

1.32

1.23

 As at 19th November 2021. Source: Financial Express

 

 

 

 

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