News & Insight • Weekly Newsletters

15 March 2024 | William Buckhurst | Charlie Todd

That Was The Week That Was

MACRO

• US inflation came in hotter than expected with core inflation of 0.4% and 3.8% m/m and y/y respectively, both above forecasts
• Japanese PPI figures were ahead of consensus and in reaction there is more market conviction that the Bank of Japan will soon raise rates
• UK GDP came in at 0.2% (still trending around zero), employment data was lower than expectations and wage growth also disappointed
• China’s economic activity has been mixed with property and lack of consumption remaining a major drag, raising doubts about the nation’s ability to gain momentum and hit their unchanged growth target of around 5%

COMPANY NEWS

• Congratulations to Willie Mullins on his nine winners at the Cheltenham Festival and in so doing being the first trainer to bring up the century – in second is Nicky Henderson on 73. Linking the Festival to the US tech sector we had results from Mullins in Oracle and Henderson (one of the UK’s leading trainers but sadly zero winners this week) with Oracle reported Q3 results that were very good and beat expectations. In particular, Oracle’s Infrastructure-as-a-Service (IaaS) business grew 52% year on year. These results were in contrast to Adobe’s which were just in line and the guidance was poor, sending shares lower. They even had to pay $1bn for pulling out of a deal to buy Figma
• The Reckitt Benckiser share price fell dramatically as $60m was awarded to parents of a child who died from their formula milk – they will appeal the verdict
• A bill aimed at banning TikTok in the US has passed through the House of Representatives. The House passed the measure aimed at banning the service used by 170m Americans unless its Chinese owner ByteDance (a holding of Scottish Mortgage) sells TikTok
• The European and African telecoms group Vodafone has sold its struggling Italian business to Swisscom for €8bn and plans to return €4bn to shareholders via buybacks, while using the remainder to pay down debt
• Some of the main UK housebuilders reported this week. Vistry (the combination of Bovis Homes and Galliford Try) coming out on top versus its peers such as Persimmon as their shift to partnerships with local housing authorities begins to come through
• Trainline had decent results, beating most analyst metrics. They said that it expected EBITDA to be around 2.3% of net ticket sales, above prior guidance of 2.15-2.25% due to better than expected growth and cost discipline
• Direct Line look to have rejected the bid from Ageas while US investment firm Elliott Advisors stated their intention to walk away from Currys

UK EQUITY WEEK

Last week we saw five more companies seemingly on their way to departing from the UK stock market with Mattioli Woods the latest to join the list.  117 companies left the UK market in 2023. Overseas buyers think that UK equities are cheap and are arguably buying them on the cheap too!

THIS WEEK IN HISTORY

2008: Bear Stearns is bought out by JP Morgan at a fraction of its market value two days earlier

2009: March 9^th - the Dow Jones closes at 676.53 marking the bottom of the great financial crisis

MARKET DATA

 As at 15^th March 2024. Source: InFront

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