Weekly Newsletters
25 November 2022 | William Buckhurst
That Was The Week That Was
MACRO
- The Federal Reserve Minutes showed a majority in favour of a reduction in the pace of rate hikes
- Further signs of inflation peaking as German factory gate prices were down 4.2% on the month
- European PMI data released this week was generally better than expected. The November preliminary Eurozone Manufacturing PMI was 47.3 vs 46.0 expected and up on the prior month with a Services PMI of 48.6 also above consensus estimates, taking the composite PMI to 47.8
- In China, the Reserve Requirement Ratio (RRR) for banks was cut by 25 basis points providing much needed stimulus to the economy
- Oil prices fell as the EU looked to enforce a price cap on oil imported from Russia
COMPANY NEWS
- Compass Group quarterly results showed substantially higher revenues and operating profit compared to last year
- Disney shares closed up after it was announced late on Sunday that it had removed Bob Chapek as CEO and brought back the man he replaced, Bob Iger, to take the role he left nearly 3 years ago
- Deere & Co reported better than expected revenue and profit as it benefited from positive farm fundamentals and increased infrastructure investment
- Customers continued to withdraw money from Credit Suisse on concerns about its financial health. This led to a $1.6bn quarterly loss. In response, shareholders agreed to a $4.2bn capital raise to shore up the balance sheet
SMALL CAP
London buses... We thought that poachers would be on the hunt for some UK smaller companies trading on cheap valuations and on Friday two came along at once. Firstly Devro, the sausage-skin maker, to Germany’s Saria and then Curtis Banks, by Nucleus the investment platform consolidator. An honourable mention to Stuart Widdowson and Ed Wielechowski at the Odyssean Investment Trust who held 7.5% and 2% respectively of the trust’s capital in them
Following Graham Cooley’s resignation, ITM Power has appointed Dennis Schulz as CEO with effect from 1 December 2022. Dennis moves to ITM Power from Linde Engineering, a division of Linde plc. He has been closely involved in ITM Power's strategic relationship with Linde and this should only strengthen the bond
INTERESTING ELSEWHERE
If you have a football in your home, chances are it’s one of the 26.6m sold each year which are made in Sialkot, Pakistan. The city is responsible for manufacturing 2/3rd of the global supply including the Adidas balls used in the FIFA World Cup. 80% of the footballs are handstitched, taking up to three hours to complete - earning the women who stitch them US$0.75 per ball. Adidas estimate that their sponsorship of the World Cup will boost sales this year by €400m
THIS WEEK IN HISTORY
1995: The Dow Jones Industrial Average closes above 5,000 for the first time. The next five years would be some of the best returns in stock market history as the Dow Jones tripled from 1995 through to 2000
2001: Enron files its last quarterly earnings report showing only $1.2bn in cash to cover $2.8bn in immediate liabilities. By the following week the company was declared bankrupt
QUOTE OF THE WEEK
"You have to be cognisant of history, or you’ll repeat it, but you also have to understand that it may not apply” plus “the short run is by far the least important thing”, investor Howard Marks in conversation with Harriet Agnew of the FT
IN OTHER NEWS
They say no player is bigger than the club. Try telling that to the 500m Instagram followers of Cristiano Ronaldo (versus Manchester United’s 61.1m) who exited the club this week. Perhaps this was another factor that encouraged the Glazer family to sell their stake in Manchester United. Having bought the club in 2005 for £790m, some estimate the controversial owners could sell it for as much as £7bn
MARKET DATA
|
% returns |
1 Week |
1 Month |
1 Year |
5 Years |
|
UK Equities (% return) |
1.37 |
6.37 |
2.29 |
1.03 |
|
World Equities (% return) |
1.49 |
5.42 |
-11.06 |
36.51 |
|
10 Year US Treasury Yield (%) |
3.69 |
4.10 |
1.64 |
2.34 |
|
GBP / USD (fx rate) |
1.21 |
1.13 |
1.32 |
1.33 |
As at 25th November 2022. Source: Financial Express
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