News & Insight Weekly Newsletters

09 December 2022 | William Buckhurst

That Was The Week That Was

MACRO

  • Despite fears of recession, the ISM PMI Services data in the US continues to be strong, rising to 56.5 in November from 54.4
  • The latest OPEC+ meeting agreed to keep production levels at current levels for at least another two months
  • China continues to gradually re-open and announced a series of Covid relaxation policies
  • Faced with a backbench rebellion, the UK Government climbed down on its target to build 300,000 homes a year in England

COMPANY NEWS

  • Ashtead’s results showed that it is growing at 25% per annum, broadly two thirds organic and one third through acquisitions and, although margins fell slightly, the business is trading very well
  • Phoenix Group said it expects to achieve around £1.2bn in new business this year. It also said it was on course to generate £1.3bn to £1.4bn in cash during 2022 
  • The US Federal Trade Commission (FTC) has moved to block Microsoft’s takeover of video game company Activision Blizzard
  • Sanofi and GSK shares rose on a positive outcome from a federal judgement surrounding the Zantac lawsuit
  • Yoga wear maker, Lululemon, shares fell due to lower profitability in the “holiday quarter” as shoppers turned cautious. They did lift revenue forecasts, however

SMALL CAP

During Covid times the second-hand car market was booming as new supply into the market was impossible to come by. We mentioned in previous publications about the consolidation in the sector, but this theme looks to have come to an end with Hedin Mobility citing challenging market conditions and uncertain economic outlook resulting in them pulling out of the deal to buy UK listed Pendragon. The latter’s shares fell by 28% on the news.

INTERESTING ELSEWHERE

With 50% of the global market, TSMC the world’s biggest maker of leading-edge computer chips, announced a $40bn investment in two new Arizona factories. Attended by both President Biden and the CEO of Apple, the US government co-funded plant will produce for i-products and Nvidia and reduce the risk of the Taiwanese supply chain. Tim Cooke said, " thanks to the hard work of so many people, these chips can be proudly stamped Made in America, this is an incredibly significant moment."

THIS WEEK IN HISTORY

1974: The Dow Jones falls to a low of 577.60, a 45% decline from the highs in early 1973. This would ultimately become the bottom of the 1973-1974 bear market

1996: Federal Reserve Chairman, Alan Greenspan, makes his famous “irrational exuberance” speech

TECH WEEK

In just three years, Disney has signed up 164m subscribers to its streaming service, Disney+. It now has 236m active subscribers on Disney+ and its other streaming platforms Hulu and ESPN+. But it continues to lose money. Last quarter Disney lost $1.5bn on streaming, more than twice as much as in the same quarter last year. On Thursday, Disney+ in America will be punctuated by advertising for the first time and viewers will have to pay $10.99 a month, 38% more than the current ad-free subscription price

IN OTHER NEWS

"Goblin mode" (ie, unapologetically self-indulgent, lazy, slovenly or greedy, in a way that rejects social norms or expectations), an Elon Musk favourite, was named Oxford Languages’ (OUP) 2022 word of the year, "Metaverse" and “#IStandWith” made second and third place respectively.

The US/Russian transfer window opened with WNBA player, Brittney Griner being swapped with Viktor Bout of Lord of War fame at an Abu Dhabi airport.

MARKET DATA

% returns

1 Week

1 Month

1 Year

5 Years

UK Equities (% return)

-1.24

1.25

-1.44

-0.13

World Equities (% return)

-2.60

0.09

-14.23

32.44

10 Year US Treasury Yield (%)

3.58

4.12

1.49

2.38

GBP / USD (fx rate)

1.23

1.14

1.32

1.34

 As at 9th December 2022. Source: Financial Express

 

 

 

 

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