News & Insight • Weekly Newsletters

31 March 2023 | William Buckhurst

That Was The Week That Was

MACRO

• US consumer confidence unexpectedly increased to 104.2 in March from an upwardly revised reading of 103.4 in February
• US housing data also came in better than expected. Pending home sales for February increased 0.8% on the month vs. the 3% decline expected, reaching the highest level since August
• But the US price deflator for personal consumption, the Federal Reserve’s favoured inflation indicator, rose by less than expected at 0.3% on the month
• Energy price falls led German and Spanish inflation lower, but the ECB still looks like it will raise rates in May
• Commodities trader, Trafigura, stated that copper inventories are at their lowest seasonal levels since 2008 

COMPANY NEWS

• Athletic apparel retailer Lululemon reported strong numbers as earnings per share grew 30.6% year on year. The resilience of the clothing sector continues
• Novartis shares closed the week higher after announcing positive phase III trial results for its new breast cancer drug
• Alibaba plans to split into six separate units in a major restructuring that will likely lead to several IPOs and will free up its main divisions, such as e-commerce, media and the cloud to operate with more autonomy
• Lockdown darlings, Bed Bath and Beyond and Nikola, both announced heavily discounted share sales
• “We are concerned because we see our future growth challenged by the storage of cat videos” so claimed the CEO of a Norwegian government-owned ammunition plant currently trying to increase supply to the Ukraine, and competing with a TikTok data centre for power resources

TECH WEEK

Elon Musk announced that Twitter’s “For You” default feed for users will no longer recommend content from accounts that aren't verified. Only subscribers, or those associated with a verified organization, are eligible. Musk claimed it’s the only way to stop “advanced AI bot swarms taking over.”

SMALL CAP NEWS

An extraordinary sized deal for Petrofac (in collaboration with Hitachi) who secured a landmark offshore wind framework worth €13bn. The contract by TenneT is looking to expand offshore wind capacity in the Dutch-German North Sea and covers six projects – each contract is valued at over €2bn and split equally

THIS WEEK IN HISTORY

• 1999: The national minimum wage at £3.60 an hour is introduced in the UK bringing an instant pay rise to 1.9m people
• 2007: Ben Bernanke gives his now famously short-sighted housing crisis speech to Congress. “At this juncture, however, the impact on the broader economy and financial markets of the problems in the subprime market seems likely to be contained....”

IN OTHER NEWS

The College of William & Mary in the US has released data showing that China has become one of the largest lenders of last resort to countries with significant geopolitical or natural resources of interest to Beijing. In 2021 the IMF provided $68.6bn of funding vs China’s $40.5bn of emergency funding. However, the IMF typically charged 2% vs China’s interest rate of 5%

MARKET DATA

 As at 31^st March 2023. Source: FactSet

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