News & Insight • Weekly Newsletters

31 May 2024 | William Buckhurst | Charlie Todd

That Was the Week That Was

MACRO

• The US PCE index, the Federal Reserve’s preferred measure of inflation, showed a small step in the right direction as it rose at its slowest pace (+0.2% month-on-month) since December
• Revised US GDP figures for Q1 came in slightly lower than expected at 1.3% year-on-year
• Consumer prices rose at a faster rate in Germany (2.8%) and France (2.7%) this month, adding to signs that Europe's battle against inflation isn't yet won. An ECB rate cut on 6^th June is still priced in but stickier inflation data may make further rate cuts less likely

COMPANY NEWS

• Sanofi, the FT reported, is going to push ahead with the spin-off of its c.€20bn consumer health division which accounts for around 10% of Sanofi’s group sales
• Sony’s music division is rumoured to be buying the back catalogue of Queen for around $1bn. Queen’s music is thought to generate around $45m a year in royalty revenues
• Costco beat earnings and revenue estimates for its third quarter as more shoppers flocked to its stores.  The company ended the quarter with 74.5m paid members, up 7.8% from a year ago. The renewal rate for members was 90.5%. Membership fee revenue grew 7.6% to $1.12bn
• Salesforce shares slumped after its lowest-ever quarterly revenue growth forecast raised fears that high interest rates and rival AI offerings were hampering demand at the cloud-based software firm

INDIAN SUMMER

At the time of writing, India's general elections are well underway and inching towards the final phase of voting. There are a staggering c.969m registered voters, including 18m first time voters, casting their votes for 7,456 candidates across 2,660 political parties in 543 constituencies. Two key blocks - the Prime Minister Narendra Modi-led NDA government, and, in the opposition, a coalition of regional parties and the Indian National Congress called the INDIA (Indian National Developmental Inclusive Alliance) - are contesting to form the next government with results being announced on 4^th June

SAUSAGE LOLS

Greggs, the British bakery chain that has developed a loyal, if not somewhat irreverent, customer base over the years – and has helped to displace Pret a Manger as the go-to lunch on the go spot – announced this week that it is to release a yard-long sausage roll for “National Sausage Roll Day” on 5^th June. Rather disappointingly, it will only be available in 10 stores – although, pleasingly for your correspondent, further research shows that one of the stores will be on the Strand, a few minutes down the road from Vermeer Partners' offices

THIS WEEK IN HISTORY

1720: One of the greatest speculative bubbles in history nears its peak, as the South Sea Company shares jump from £595 to £720

1985: RJ Reynolds Tobacco reaches an agreement to buy Nabisco for $4.9bn

MARKET DATA

 As at 31^st May 2024. Source: InFront

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