News & Insight • Weekly Newsletters

01 March 2024 | William Buckhurst | Charlie Todd

That Was the Week That Was

MACRO

• In a quiet week the UK press were kept busy with various rumours about the Spring Budget (6^th March)
• US Q4 GDP numbers came in better than expected at 3.2% year-on-year
• The Yen strengthened against its worldwide peers as the Bank of Japan gave some hawkish comments despite the annual CPI rate rising to 2.2%

COMPANY NEWS

• UK housebuilders were highlighted (again!) as the CMA – Competition and Markets Authority – opened a case on non-public information sharing against eight companies – Barratt, Bellway, Berkeley, Bloor Homes, Persimmon, Redrow, Taylor Wimpey and Vistry
• Berkshire Hathaway released their quarterly results over the weekend with Warren Buffett leading with a tribute to his ex-colleague, Charlie Munger, whilst highlighting issues in the insurance and utility parts of the business. Otherwise, things continue to progress well
• Direct Line were approached by the Belgium insurance company, Ageas, sending their shares higher
• Reckitt Benckiser shares fell by over 10% as results disappointed. Sales declined when the market was expecting some sort of growth and divisionally things weren’t much better
• Hunting, the oil services group, had excellent results, boosting the share price, but elected not to up their full-year guidance
• One of the most popular stocks in lockdown for US retail investors was Snowflake and was having a renaissance with the boom in AI attributed stocks. However, the shares fell 18% on results this week as numbers missed expectations while the legendary CEO, Frank Slootman, announced he would be stepping down
• IMI, the UK motion and fluid control engineering specialists, had very solid numbers as their turnaround continues to gather momentum
• The current label and owner of Taylor Swift’s back catalogue (amongst others), Universal Music, had very good numbers with EBITDA (earnings before interest, taxes, depreciation, and amortisation) increasing 9.2% to beat expectations. The company announced a strategic organisational redesign that would generate €250million in annual run-rate savings by 2026
• With Mike Ashley in the courts vs. Morgan Stanley on a trading issue, his son-in-law Michael Murray, now CEO of Frasers Group, was trading in other stocks, buying up 11m shares of Hornby - the model train and Scalextric specialists - which looks to be a shrewd move (having already acquired 4m). In a busy week Frasers also acquired WiggleCRC out of administration to combine with its Evans Cycles Perhaps something for his father-in-law at Christmas?

ELECTRIC VEHICLES

At the beginning of February, we highlighted some car manufacturers rowing back on their EV expansion (Volvo were going to stop backing Polestar, Renault and VW were cancelling the IPOs of Ampere and PowerCo respectively). This week we had a leak from Apple that their “Project Titan” EV project had been parked and Mercedes and Aston Martin both paused their new divisions. It is simply a battle between Tesla and the Chinese manufacturers, or maybe Frasers (see above) are correct and EVs should stick to Scalextric?

GRANOLAS

The US stock market has the “Magnificent 7.” In Europe, they have the “Granolas” a term coined by Goldman Sachs to describe 11 ascendant European companies that have lifted European markets to a record high. The companies — GSK, Roche, ASML, Nestlé, Novartis, Novo Nordisk, L’Oréal, LMVH, AstraZeneca, SAP, and Sanofi — have contributed half of the Stoxx Europe 600 increase over the last year.

THIS WEEK IN HISTORY

1847: Alexander Graham Bell is born. He would patent the telephone, and would incorporate the American Telephone and Telegraph Company, now just known as AT&T

1957: The S&P 500 Index is introduced. Out of the 500 names that made up the index then, only 53 remain

MARKET DATA

 As at 1^st March 2024. Source: InFront

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