News & Insight • Weekly Newsletters

11 November 2022 | William Buckhurst

That Was The Week That Was

MACRO

• A softer than expected US CPI print (7.7% year on year) sparked a rally in growth stocks and a decline in bond yields
• The closely followed “core” measure, which strips out volatile food and energy prices and is regarded as the best indicator for inflation’s future trajectory, eased from a four-decade high
• China relaxed some of its Covid measures even as case numbers continued to rise

COMPANY NEWS

• ASML upgraded long-term revenue forecasts through to 2025 and said that it continues to have more orders for its semi-conductor equipment than it can currently supply
• Persimmon shares fell as it said that cancellation rates had climbed to 28% over the last six weeks. The weekly sales rate per development scheme, which has been around 0.78 historically, fell to 0.48
• Nvidia closed the week up sharply after it was reported that it has started to sell a new chip into China that conformed with new export restrictions

THIS WEEK IN HISTORY

1997: WorldCom and MCI agree on a $37bn merger, it later transpired that WorldCom had overstated assets by a staggering $11bn, at the time the largest corporate accounting fraud in history

2013: For the first time in nearly twenty years oil output in the US was greater than its imports. The EIA reported that domestic crude oil production outnumbered the import of oil for the first time since 1995, mainly due to the increase in fracking

SMALL CAP NEWS

• Binance, the largest crypto exchange, abandoned its rescue package for market rival FTX - the Sequoia Capital and BlackRock backed exchange. FTX, valued at $32bn earlier in 2022 now faces an estimated funding shortfall of $8bn. Founder Sam (not so) Bankman-Fried told his staff that “I’m deeply sorry that we got into this place, and for my role in it”. It’s understood the SEC and US Justice department are investigating the firm for securities violations, none of which bodes well, in the short term at least, for the sector as a whole

STAT OF THE WEEK

“It’s become a favourite data point among sell-side Wall Street historians: In the year after every midterm election since 1950, the S&P 500 has gone up, regardless of the party in power”  The New York Times

IN OTHER NEWS

The US owners of Liverpool FC have decided to sell after 12 years. Estimates by Forbes suggest it could sell for nearly US$4.5bn, almost US$1bn more than Chelsea FC did earlier this year

MARKET DATA

 As at 11^th November 2022. Source: Financial Express

This publication has been produced by Vermeer Investment Management Limited (VIM) trading as Vermeer Partners. It is provided for information purposes only. VIM makes no express or implied warranties and expressly disclaims all warranties of merchantability or fitness for a particular purpose or use with respect to any data included in this publication. VIM will not treat unauthorised recipients of this publication as its clients. Prices shown are indicative and VIM is not offering to buy or sell or soliciting offers to buy or sell any financial instrument. Without limiting any of the foregoing and to the extent permitted by law, in no event shall VIM, nor any of its officers, directors, partners, or employees, have any liability for (a) any special, punitive, indirect, or consequential damages; or (b) any lost profits, lost revenue, loss of anticipated savings or loss of opportunity or other financial loss, even if notified of the possibility of such damages, arising from any use of this publication or its contents. Other than disclosures relating to VIM, the information contained in this publication has been obtained from sources that VIM believes to be reliable, but VIM does not represent or warrant that it is accurate or complete. VIM is not responsible for, and makes no warranties whatsoever as to, the content of any third-party website referred to herein or accessed via a hyperlink in this publication and such information is not incorporated by reference. The views in this publication are those of the author(s) and are subject to change. VIM has no obligation to update its opinions or the information in this publication. This publication does not constitute personal investment advice or take into account the individual financial circumstances or objectives of the client who receives it. Any securities discussed herein may not be suitable for all investors. VIM recommends that investors independently evaluate each issuer, security or instrument discussed herein and consult any independent advisors they believe necessary. The value of and income from any investment may fluctuate from day to day as a result of changes in relevant economic markets (including changes in market liquidity). The information herein is not intended to predict actual results, which may differ substantially from those reflected. Past performance is not necessarily indicative of future results. This material has been issued and approved for distribution in the UK by VIM. ©2022 Vermeer Investment Management Limited. All rights reserved. No part of this publication may be reproduced or redistributed in any manner without the prior written permission of VIM. VIM is authorised and regulated by the Financial Conduct Authority (FRN: 710280) and is incorporated in England and Wales (company number: 09081916).