News & Insight • Weekly Newsletters

12 April 2024 | William Buckhurst | Charlie Todd

That Was The Week That Was

MACRO

• US CPI was again hotter than expected – March CPI was 0.4% m/m vs 0.3% expected – leading many to push back expectations of rate cuts, however Federal Reserve FOMC meeting minutes released indicated that “almost all” Fed officials saw it as appropriate to cut rates “at some point” this year
• UK GDP continues to trend around zero – with the economy growing by 0.1% in February
• The review by ex-Federal Reserve chairman Ben Bernanke on the forecasts used by The Bank of England was rather scathing, stating systems were out of date
• Gold goes through $2,400 and Brent above $91
• Geopolitical concerns rose as Iran launched its first ever missile attack on Israeli soil

COMPANY NEWS

• Petrochemical bastions Shell and BP led the market higher. Previous Shell CEO Ben van Beurden pointed out that the shares were massively undervalued and leaked that he had looked at taking the listing over the pond. BP were rumoured to have been approached by UAE’s ADNOC
• Tesco announced a solid set of numbers which were in line with consensus. They also mentioned they could see food inflation coming down slightly
• HSBC – the worlds local bank – won’t be in Argentina after stating that it would sell the operations in the country to Grupo Financiero Galicia for $550m
• A Goldman Sachs analyst note on the defence sector led shares lower stating European armament stocks were at “peak multiples”. German Rhinemetall share price fell along with UK’s BAE Systems and Italian Leonardo
• On the back of CEO Jamie Dimon releasing his annual letter, JP Morgan got the reporting season off to a mixed start as the print was good, but the shares fell 5% - they are relatively expensive compared to other banks
• Tui’s shares starting trading solely on the Frankfurt Stock Exchange after ceasing its joint listing in the UK

COMMODITY WATCH

As we have recently mentioned the commodity sector is moving higher with plenty of mentions of gold and black gold in the printed press. One area that doesn’t get as big a mention is lithium or phosphate – until a recent email from EPIC Investment Partners that is. They mentioned the positives of the lithium-ion phosphate battery but how Norway “has discovered a massive 77-billion-ton phosphate reserve, effectively doubling the world's supply of this super material. This equates to a mind-blowing $24 trillion in value! For context, that's more than the entire oil reserves of Saudi Arabia. Even after extraction, refining and shipping costs, with careful management this could be transformational for the Norwegian economy, as their oil and gas incomes run dry. Phosphate may not sound sexy, but it's crucial for fertilisers, electronics, solar panels and of course LFP batteries - powering the modern world. With the new phosphate discovery, the sovereign wealth fund of Norway could triple in size”

THIS WEEK IN HISTORY

1720: The first major secondary stock offering takes place, as the South Sea Co. reopens its subscription books in London, hoping to raise £2m. The company raises half that amount by 10.00am, as mobs of eager buyers pour into the South Sea Co.'s headquarters

2000:  The NASDAQ has one of its worst days ever, falling by 9.67%, down 25.3% for the week. But "tech stocks have largely gone through their valuation adjustment," says Lehman Bros. strategist Jeffrey Applegate, who – wrongly as it turns out – urges investors to buy

MARKET DATA

As at 12^th April 2024. Source: InFront

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