News & Insight Weekly Newsletters

13 January 2023 | William Buckhurst

That Was The Week That Was

MACRO

  • US CPI came in at 6.5%, bang in line with expectations, but the core rate continues to tick up
  • The Bank of England announced that it has successfully managed to exit its bond buying programme, put in place following Kwasi Kwarteng’s failed mini-budget
  • The gold price nudged through the $1,900 mark for the first time since April last year
  • Early signs of a breakthrough on post-Brexit negotiations with Brussels over Northern Ireland which would alleviate some of the long-standing legal rows over tariffs
  • UK GDP for November eked out a small positive return of 0.1% as opposed to the expected contraction of 0.2%

COMPANY NEWS

  • JP Morgan Chase beat profit expectations and forecast only a “mild” recession in the US
  • It was reported that Apple are looking to replace a lot of the key Broadcomm products from their iPhones
  • Barratt Developments and Persimmon both reported a similar low sales per outlet per week of 0.3 which has fallen from 0.6 but has picked up to 0.45 in the last month
  • Tesco and Marks & Spencer both showed good Christmas trading and they are continuing to take market share

SMALL CAP

Unlike the gaming market - a profit warning in Frontier Developments sending the shares meaningfully lower -  there were signs of life in the white goods market, with Marks Electrical announcing 33.4% revenue growth and margin expansion as the company’s in-house delivery fleet achieved record quarterly sales volumes in Q3 leading to confidence in making full year guidance. This contrasts with the “delivery” firm Evri which has struggled to pass the parcels due to staff shortages, Royal Mail strikes and bad weather

INTERESTING ELSEWHERE

As the Chinese year of the tiger comes to an end it’s all stripes! The athletic brand, Adidas, has lost a court case to stop luxury brand Thom Browne Inc. from using a four-stripe design that was apparently too like that of their three-stripe logo. Adidas had planned to ask for more than $7.8m in damages - but a jury in New York sided with Browne

 

THIS WEEK IN HISTORY

1904: Henry Ford, who a year earlier had incorporated the Ford Motor Company, breaks the land speed record of 91.37 mph on the frozen surface of Michigan’s Lake St. Clair

2008: Bank of America announced it will buy Countrywide Financial for $4.1bn in stock making Bank of America Corp. the largest US mortgage lender and loan servicer

 

TECH WEEK

Following the story of OpenAI starting a funding round, it was rumoured that Microsoft is set to invest $10bn into the company that would value it at $29bn. Microsoft will reportedly get a 75% share of OpenAI’s profits until it makes back the money on its investment, after which the company would assume a 49% stake. Whilst the technology can be used for various reasons such as copywriting etc there are many legal risks according to lawyers, such as intellectual property, bias and discrimination, data protection and misleading content

IN OTHER NEWS

‘Author’ and philanthropist the Duke of Sussex, has added another scalp to his trophies this week as he is responsible for ‘penning’ the fastest selling non-fiction book in UK history. A proud week for publisher TransWorld Penguin Random House

 

MARKET DATA

% returns

1 Week

1 Month

1 Year

5 Years

UK Equities (% return)

1.92

4.54

0.82

0.53

World Equities (% return)

2.61

0.62

-11.87

29.48

10 Year US Treasury Yield (%)

3.50

3.51

1.70

2.55

GBP / USD (fx rate)

1.22

1.23

1.37

1.37

 As at 13th January 2023. Source: Financial Express

 

 

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