News & Insight • Weekly Newsletters

19 April 2024 | William Buckhurst | Charlie Todd

That Was the Week That Was

MACRO

• Middle East tensions continue to rise as Israel launched a retaliatory missile strike on Iran
• The IMF released their latest World Economic Outlook, suggesting UK GDP would grow by 0.5% this year but by 1.5% next year. US GDP is expected to grow by 2.7% this year but Russia’s came out on top at 3.2%
• March UK inflation data was slightly warmer than expected, growing by 0.6% in a month (vs. 0.4% expected)

COMPANY NEWS

• Goldman Sachs were probably the pick of the US banks this reporting season as profit and revenue beat expectations due to trading and investment banking
• Ashtead Technology, the sub-sea engineering specialists, had very good numbers but the shares fell on results due to the lack of an upgrade on guidance. However, this has been one of the most successful recent IPOs in the UK
• Martins had another profit warning and the CEO left
• Netflix is up 30% year to date and the quarterly numbers were excellent but they weren’t enough to warrant even lofty expectations. The market also took exception to management saying that they would not disclose quarterly subscription numbers going forward
• ASML, the Dutch manufacturer of semiconductor machines, enjoyed ok results but the market were shocked by a two thirds fall in the order book – many think that is simply a timing issue and were heartened by TSMC confirming a large CAPEX spend
• Tesla hasn’t had the best start to the year and this continued as it announced a 10% headcount cut and the recall of thousands of its Cybertruck. Although other car brands have had recalls, Tesla tends to grab headlines
• The management at Schlumberger, the oil services company, suggested that they had had an “exciting start to the year” and continued with their growth momentum
• We have mentioned the price vs. volume issue facing consumer staples and Proctor & Gamble were the latest to report. Although earnings beat expectations and the company raised forecasts volumes were flat
• Intuitive Surgical, the clinical robotics company, posted very good results as demand increased
• The renaissance of Adidas continues – maybe due to the Sunak effect?! – and numbers were very good
• Rio Tinto and BHP Group both announced good results that didn’t come without their respective issues at some of their mines
• ABB, the Swiss/Swedish engineering company had very good numbers, in particular the electrification division. Margins also increased across the whole company
• Brilliant results from the European luxury conglomerate L’Oreal and the shares of LVMH also rose as their results weren’t as bad as expected following Kering’s print
• Israeli smart-glass designer, Gauzy, files to IPO in US

ALCOHOL FREE ZONE

Congratulations to those that won at The Olivier Awards. Having seen Mark Gatiss in The Motive and the Cue his award was richly deserved. In the Sam Mendes production, Mark Gatiss plays Sir John Gielgud trying to contain and conjure Richard Burton (Johnny Flynn) as the latter plays Hamlet on Broadway. Richard Burton was known as a showman and a drinker and therefore we were wondering what he would have made of the announcement by Atsushi Katsuki, head of Asahi (which owns brands such as Asahi Super Dry, Peroni Nastro Azzurro and Pilsner Urquell) that no- and low-alcohol drinks will generate 50% of Asahi’s beverage sales by 2040? “It’s a big opportunity as long as we can go down the premium path,” Katsuki told the Financial Times. “Among global players, we have a strong advantage since we have capabilities in both beer and alcohol beverages as well as soft drinks.”

THIS WEEK IN HISTORY

1865: President Lincoln is assassinated. The New York Stock Exchange closes on the news and remains closed for six days. At the time it would be the longest closure in the NYSE’s history, and would remain so until the Panic of 1873 struck, when the exchange closed for 10 days

1906:  The San Francisco Earthquake. The Dow Jones Industrial Average falls about 4% (2.61 points) over the next 2 days

MARKET DATA

 As at 19^th April 2024. Source: InFront

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