News & Insight • Weekly Newsletters

12 January 2024 | William Buckhurst | Charlie Todd

That Was The Week That Was

MACRO

• The US CPI number for December came in higher than expected, at 3.4% over the year, up from 3.1% in November. Excluding food and energy (so-called “core inflation”) came in at 3.9%.
• Fed official Loretta Mester said that March was too early for a rate cut
• At -4.6%, Chinese export data posted a first full-year decline since 2016
• The Japanese stock market continues its strong start to the year, but the country’s wage growth continues to be anaemic at +0.2% from the previous year, decelerating sharply from a 1.5% increase in October

COMPANY NEWS

• Persimmon said that new home completions were down by a third and that cash on the balance sheet had halved; however, they noted that sales picked up in the final quarter and that easing mortgage rates were translating into a pick-up in demand
• Meanwhile, 2023 sales at fellow UK housebuilder Vistry were down only 5% over the year and it said it was seeing good demand from its partnership customers (PRS and Housing Associations) while it also said easing mortgage rates should help stimulate demand in 2024
• JP Morgan announced record profits of $49.6bn for 2023, with better-than-expected net interest income (NII). The only negative was a $2.9bn charge for the failure of regional US banks last year, including Silicon Valley Bank. Chief Executive Jamie Dimon said the US economy continued to be “resilient”, but cautioned that a combination of spending on the green economy, the restructuring of global supply chains and higher military spending might cause “inflation to be stickier and rates to be higher than markets expect”
• Nvidia shares continued their upwards march as the company showcased its generative AI-powered NPCs at the Consumer Electronics Show
• Tesla announced they are shutting down their German plant for two weeks due to Red Sea shipping issues
• Cameco (and other Uranium linked stocks) rallied strongly as the price of the element hit 15-year highs due to the world’s largest producer, Kazakhstan’s Kazatomprom warning it is likely to fall short of its output targets over the next two years
• Like London buses that wasn’t the only Kazakhstani news as its national carrier – Astana Air – will look to IPO on the London Stock Exchange which we hope is the first of many this year. Interestingly, BAE Systems hold a 49% stake in the company

SMALL CAP

Having gone to see ABBA Voyage last week – well worth a visit if you can – it was a similar tale in the small-cap world as we saw the return of (Super Trouper) Vin Murria’s investment vehicle AdvancedADVT after the recent suspension of shares. They completed the acquisition of five businesses from Capita – Gimme! Gimme! Gimme! – and will sell one and improve the other four. With more bolt-ons in the pipeline the business is well set. ‘The Name of the Game’ on their website suggests “The business solutions and human capital management divisions will provide a strong foundation to capitalise on the anticipated market growth, increasing digital transformation and AI trends, whilst also expanding its presence across a number of adjacent markets, geographic boundaries and digital sectors.”

INTERESTING ELSEWHERE

In the US, the Securities and Exchange Commission (SEC) said that a post sent from its “X” (formerly known as Twitter) account announcing the arrival of a much-anticipated Bitcoin ETF was “unauthorised” and that the agency’s account had been “compromised”

TRUST WATCH

Further M&A in the investment companies’ sector as UK’s LondonMetric agrees to buy UK real estate investment trust LXI REIT in a deal valued at £1.9bn

THIS WEEK IN HISTORY

1981: Infamous stock market forecaster, Joe Granville sent a late-night recorded phone message to his 3,000 Early Warning subscribers to “sell everything.” The next day was the heaviest trading in the history of the New York Stock Exchange up to that point, with markets falling more than 2%. But markets bottomed a year later and then embarked on (what is arguably still) the greatest bull market ever 

2022: Apple became the first company to reach a $3trillion valuation. It was also the first company to be valued at $1trillion in 2018 and $2trillion in 2020

MARKET DATA

As at 12^th January. Source: InFront

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