Weekly Newsletters

18 November 2022 | William Buckhurst

That Was The week That Was

MACRO

  • On Monday, Lael Brainard said the Fed should “soon” bring its string of supersized interest rate increases to an end
  • US PPI rose 8% in October from a year ago, the fourth straight decline
  • UK inflation numbers continue to rise at 11.1% year on year, although the core number was flat
  • Sending a strong message at the G20 summitIndia’s Prime Minister Modi said that there should be no restrictions on energy supplies at a time when India is being criticised by Western countries for its imports of Russian crude oil
  • Chinese retail sales numbers were down for the first time in six months

COMPANY NEWS

  • Melrose released a good set of quarterly results with revenue up 14% and operating profit substantially higher
  • Vodafone cut its full year cashflow forecast and lowered earnings guidance, reflecting soaring energy costs and a deteriorating performance in Germany, Italy and Spain
  • It was disclosed that Berkshire Hathaway has acquired a $4.1bn stake in chipmaker TSMC
  • Experian continued to show its resilience as Q3 organic growth beat estimates
  • Estée Lauder announced its first clothing deal this week when it announced the purchase of the Tom Ford fashion label for $2.8bn, the biggest luxury sector deal this year
  • Alibaba posted a surprise loss as Covid restrictions curbed the China e-commerce giant but did announce a large buy back of shares
  • Thermal energy management and niche pumping specialist, Spirax-Sarco saw a slowdown in industrial growth compared with pharmaceutical companies normalising demand post the vaccine production

SMALL CAP

One of the best performing stocks this week was Harland & Wolff which climbed 250% as the maritime engineer was part of the consortium that was selected as the preferred bidder to build three Royal Navy support ships on Wednesday worth £1.6bn. The consortium subsequently announced that it had invested £77m into H&W, the company famous for having built the majority of the ocean liners for the White Star Line, including Olympic-class trio: RMS Titanic, RMS Olympic and HMHS Britannic

INTERESTING ELSEWHERE

Pioneering news this week as the US Food and Drug Administration completed its first pre-market consultation for the production of cultivated chicken by the private company Upside Foods. At present, this is the only company to have got this far but we would expect several companies in the Agronomics portfolio to follow

More reason to watch from home, as the Qatar authorities have u-turned on allowing beer at the stadiums. With two days to go, fans will only be allowed to drink non-alcoholic beer, something of a disappointment perhaps for Budweiser (AB Inbev) and their US$75m sponsorship deal with FIFA

THIS WEEK IN HISTORY

1923: Inflation in Germany hits its peak. As the exchange rate for the US Dollar to the German Mark reached 1:4.2 trillion, marking an inflation rate of 3,250,000% per month. Prices were doubling every two days; and workers were being paid twice a day so that they could go out and buy things before storekeepers increased their prices by the evening

1973: US President Richard Nixon utters his now famous line during a speech while the Watergate scandal intensified: “I am not a crook.

QUOTE OF THE WEEK

“There were two thousand auto companies: The most important invention, probably, of the first half of the twentieth century. It had an enormous impact on people’s lives. If you had seen at the time of the first cars how this country would develop in connection with autos, you would have said, ‘This is the place I must be.’ But of the two-thousand companies, as of a few years ago, only three car companies survived. And, at one time or another, all three were selling for less than book value, which is the amount of money that had been put into the companies and left there. So, autos had an enormous impact on America, but in the opposite direction on investors.”

Warren Buffett at the peak of the tech bubble this week in November 1999, Sun Valley, Idaho

IN OTHER NEWS

According to the models of the United Nations (UN), the world’s population reached 8 billion this week - a mere 12 years since it passed 7 billion, and less than a century after the planet supported just 2 billion people

But about 60% of the global population live in places where fertility rates have dropped below the replacement level of 2.1 births per woman, the point at which a country’s population would remain stable. In South Korea, which already had the world’s lowest rate, it fell to just 0.81 this year

Market Data

% returns

1 Week

1 Month

1 Year

5 Years

UK Equities (% return)

0.49

6.96

-2.32

0.12

World Equities (% return)

-1.03

6.06

-15.26

35.00

10 Year US Treasury Yield (%)

3.83

4.01

1.59

2.34

GBP / USD (fx rate)

1.19

1.13

1.35

1.32

 As at 18th November 2022. Source: Financial Express

 

 

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