News & Insight Weekly Newsletters

11 February 2022 | William Buckhurst

That Was The Week That Was

MACRO

  • US CPI hit 7.5%, a 40-year high and Goldman Sachs are now talking about seven rate rises this year
  • The Atlanta jobs report showed wage inflation now at around 5%
  • December GDP in the UK rose by 0.2%, better than expected given the emergence of Omicron

CRYPTO WEEK

JP Morgan attempted the impossible: determining Bitcoin’s “fair value”. The amount, about 12% below the current price, is based on Bitcoin’s volatility in comparison with gold. Meanwhile, the bank’s long-term theoretical target for Bitcoin -- a level that would put its total market value on par with that of all gold held privately for investment purposes -- sits at $150,000, up from $146,000 a year ago

COMPANY NEWS

  • BP swung to its highest annual profit in eight years and CEO, Bernard Looney, described it as a “cash machine”
  • Linde revealed a modest beat of expectations and an increased share buyback
  • Zimmer Biomet continues to be hampered by the pandemic as it reported another profit miss
  • Disney showed the Theme Parks division bounced back to profitability as visitors return to trusted brands, while Disney Plus reported strong subscriber growth
  • Siemens showed a very strong order book while management commented that they were still facing the impact of increasing costs and supply chain constraints and that it would take several quarters to ease
  • Unilever mixed results – best revenue growth in nine years but they highlighted costs pressures that will hurt margins
  • Shiseido had good results with China sales up 30% compared to (pre-pandemic) 2019
  • Coca Cola issued strong profit guidance as organic revenues grew 9% in the fourth quarter

SMALL-CAP NEWS

Ceres Power announced a three-way collaboration with Weichai Power and Robert Bosch to access the significant Chinese market. The addition of Bosch to the existing Weichai-Ceres partnership, and an increase in scope to include stationary power applications, significantly increases the scale of the planned JV.  Ceres will provide the Solid Oxide Fuel Cell technology through an extension of Bosch’s existing licence and will receive royalties on the sale of stacks. After a significant sell-off, this could act as a boost to the hydrogen space

THIS WEEK IN HISTORY

1975: Margaret Thatcher defeats Ted Heath in the Conservative party leadership election, heralding the start of Thatcherite reforms that dominated the UK in the 1980’s

1990: Warren Buffet’s famous Berkshire Hathaway newsletter that states “lethargy bordering on sloth remains the cornerstone of our investment style

IN OTHER NEWS

With Bruce Springsteen and now Sting this week having sold the rights to their back catalogue it was not surprising to see the rapper Snoop Dogg go for the unconventional route by buying control of Death Row Records, the label where he began his career, from a group owned by Blackstone

 

MARKET DATA

% returns

1 Week

1 Month

1 Year

5 Years

UK Equities (% return GBP)

2.01

2.89

24.07

26.86

World Equities (% return GBP)

0.26

-3.30

13.68

74.67

10 Year US Treasury Yield (%)

1.94

1.74

1.17

2.41

GBP / USD (fx rate)

1.36

1.36

1.38

1.25

 As at 10th February 2022. Source: Financial Express

 

 

 

 

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