Weekly Newsletters

03 December 2021 | William Buckhurst

That Was The Week That Was

MACRO

  • In the US, 210,000 new jobs created in November was just under half the number economists had forecast while the overall unemployment rate fell
  • The difference between the 10-year and 2-year US treasury yields – a key measure of the yield curve – moved to its narrowest since January
  • Japan announced that it would close its borders to all travellers
  • In the UK, Michael Saunders, one of only two MPC members to vote for a rate rise last month turned from a hawk into a dove as he said that the effects of Omicron could keep rates on hold this month

COMPANY NEWS

  • BT finished the week up after it was reported that Indian company Reliance Industries was weighing a bid for the company
  • Moderna stated that it could have a vaccine to fight the new COVID variant Omicron ready in early 2022 if required, but then said that existing vaccines would be less effective at targeting the new variant and that it could take months before companies could manufacture a new variant specific jab
  • Royal Dutch Shell bowed to ESG pressure as it dropped plans to develop the North Sea Cambo oil project off the Shetland Islands

SMALL-CAP NEWS

Amigo Holdings, the sub-prime lender, remained rather friendless this week after announcing a profit of £2.1m from the loss of £62.6m reported last year. However, customer numbers declined by 42% to 102,000, revenue declined 39% to £56.5m and impairments increased 61% despite the loan book declining by 54% to £224m. They continue discussions with the FCA as the business cannot pay the balance sheet provision for complaints of £344m – if upheld what is the value of the equity?

THIS WEEK IN HISTORY

1990: The United Nations issues resolution 678, notifying Iraq that it had until January 15th to leave Kuwait. Iraq would not move, and starting on January 17th, the US air bombardment would begin

1998:  Oil giant Exxon agrees to purchase Mobil for $80bn. The new company would be responsible for over 15% of all oil sold around the world at the time

 RE-OPENING TIMES

BB Healthcare Fund on the new variant: “It remains the case that there is no reason yet to believe that Omicron will drive a new wave of higher morbidity and mortality from viral exposure.  It is also undeniable that SARS-CoV-2 is endemic and existing in zoonotic reservoirs, so any notion of a zero-COVID world is delusional. The government cannot save you from this virus, no-one can. However, science can continue to do a lot to mitigate the risk of morbidity (which is now very low)”

THE ART OF INVESTMENT – Vermeer Podcast

Paul Dixey’s latest Podcast centres on a discussion with Andy Rothman, Investment Strategist at Matthews Asia, regarding investment in China. Putting to rest many misconceptions from an economic and political perspective and debating exposure to the economy that is driving global growth and innovation

Click here to listen

MARKET DATA

% returns

1 Week

1 Month

1 Year

5 Years

UK Equities (% return GBP)

1.46

-1.03

14.76

26.17

World Equities (% return GBP)

-0.41

-0.43

22.62

94.11

10 Year US Treasury Yield (%)

1.35

1.60

0.92

2.40

GBP / USD (fx rate)

1.32

1.37

1.35

1.27

 As at 3rd December 2021. Source: Financial Express

 

 

 

 

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