Weekly Newsletters

08 April 2022 | William Buckhurst

That Was The Week That Was

MACRO

  • A speech from Federal Reserve Governor, Lael Brainard, who until now had a reputation for being a dove, came out with a pretty hawkish statement suggesting that the Fed could start reducing its balance sheet as soon as May – growth stocks fell and bond yields rose
  • Although the data is unreliable, it appears that China’s Covid infection rates are increasing rapidly, while vaccinations rates are still very low
  • UK Energy Policy released this week showed a renewed commitment to nuclear and an aim to expand North Sea oil and gas production
  • The EU, US and UK announced further sanctions against Russia. It was reported that the US was set to impose further penalties against Russia’s largest banks and President Putin’s daughters whilst US President Biden would also sign an executive order that prohibits new investment in Russia by US persons and entities

COMPANY NEWS

  • Shell have confirmed that pulling out of its Russian ventures will cost US$5bn; however, analysts estimate the rising price of energy will more than compensate with US$30bn being added to the bottom line in 2022
  • UK Housebuilders confirmed the costs they will incur over historic cladding issues
  • Twitter closed up sharply on the week after it was announced that Elon Musk had taken a 9.2% stake, becoming its largest shareholder
  • Hewlett Packard shares surged after it was revealed that Warren Buffet had taken a stake in the company

THE ART OF LETTER WRITING

Jamie Dimon’s 44 page annual missive includes his views on Ukraine and Russia: a “substantial economic impact” for the former, and a c.$1bn loss to leave the latter. He is actively championing investment in LNG to reduce European dependence on gas supplies from the east, and closer to home seems to have softened his tone and views on flexible working

SMALL CAP NEWS

With the end and the beginning of the new financial year in the week it was interesting to see a slew of management top ups in their personal stakes. Firstly, it was announced that since 31st March the management team of Burford Capital, the finance providers within the litigation space, have in aggregate invested $3m into the stock. The CEO of Victorian Plumbing, Mark Radcliffe, followed by investing £354k on 4th April increasing his personal holding to 46.8% (from 46.6%). Turn those taps on!

THIS WEEK IN HISTORY

1720: The South Sea Bill receives Royal Assent, allowing South Sea Company shares to be sold to the public. £2m worth of South Sea shares would be sold at 300 per share one week later, on April 14th, 1720. Demand was so strong that shares for the South Sea Company sold out within an hour

1968: The New York Stock Exchange held a moment of silence in honour of Martin Luther King on April 5th, the day after he was assassinated

MARKET DATA

% returns

1 Week

1 Month

1 Year

5 Years

UK Equities (% return GBP)

1.40

6.67

9.88

18.18

World Equities (% return GBP)

-1.15

5.08

7.73

68.52

10 Year US Treasury Yield (%)

2.72

1.86

1.64

2.38

GBP / USD (fx rate)

1.30

1.31

1.37

1.24

 As at 8th April 2022. Source: Financial Express

 

 

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