Weekly Newsletters

10 December 2021 | William Buckhurst

That Was The Week That Was

MACRO

  • The Chinese authorities signalled their first substantial policy loosening since the early days of the pandemic by reducing the Reserve Rate Requirement (RRR) by 0.5%
  • In the UK, Black Friday helped retail sales grow at an annual rate of 5% in November
  • Boris invoked “Plan B” with a working from home order and vaccine passports for large entertainment venues
  • Greece has requested that the ECB keep on buying its bonds even after next March when the ECB’s vast asset purchase scheme is expected to wind down

BOND WATCH

Fitch says that Evergrande is in default. The ratings agency is the first to declare that the troubled Chinese real estate developer has defaulted on its overseas bonds, with an interest payment missed this week. Neither Evergrande nor the Chinese government has confirmed a default

COMPANY NEWS

  • Activist investor Elliott Management increased pressure on SSE to spin off, or sell at least part of, its renewables business
  • Ashtead reported very good numbers enjoying a strengthening market position as it benefitted from the disruption to global supply chains
  • ABB unveiled higher sales and profitability targets as it expects to benefit form trends such as decarbonization and shrinking workforces
  • Liontrust announced the acquisition of rival fund manager Majedie for £120m

SMALL-CAP NEWS

Inflation is certainly happening in the new and second-hand car markets and this was proven by a brilliant set of numbers from Vertu Motors who announced that profitability in October and November continued to exceed forecasts. Supply shortfalls across new and used cars have continued, although new vehicle supply was better than expected and sold at enhanced margins. Customer demand has remained strong, with strong future order banks in all new vehicle channels. Used car supply constraints have continued to underpin prices and perhaps they will follow the example of Constellation Automotive (webuyanycar.com/BCA/cinch) who have purchased stock by buying Marshall Motors

THIS WEEK IN HISTORY

1957: Two months after the Soviet Union launched Sputnik, the US attempts to launch its first satellite. But after rising just 6 inches, the rocket explodes. The demoralized stock market falls 6% over the next week as worries mount that the US will be unable to compete with the Soviets in space

2008:  Bernie Madoff is arrested.  Madoff’s Ponzi scheme involved taking clients’ money, depositing the money into a bank account (never the stock market) and generating fake trades and account statements that listed fake returns. When clients asked for returns, they were given money from the bank account

CLOSING TIMES

MariMed Inc., a leading medicinal cannabis operator which describes itself as “focused on improving lives every day”, this week unveiled the world’s largest cannabis-infused brownie, weighing 850 pounds, in celebration of National Brownie Day on December 8th

MARKET DATA

% returns

1 Week

1 Month

1 Year

5 Years

UK Equities (% return GBP)

2.73

0.29

15.78

25.45

World Equities (% return GBP)

2.90

1.22

23.52

92.25

10 Year US Treasury Yield (%)

1.48

1.56

0.92

2.47

GBP / USD (fx rate)

1.33

1.36

1.33

1.26

 

As at 10th December 2021. Source: Financial Express

 

 

 

 

 

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