News & Insight • Weekly Newsletters

07 March 2025 | William Buckhurst | Charlie Todd

That Was The Week That Was

MACRO

• Despite some weak economic survey data over the last few weeks, the first jobs report fully within Trump’s second term wasn’t as bad as some feared. Non-farm payrolls increased by 151,000 in February, only very slightly lower than expected, and the overall unemployment rate rose from 4.0% to 4.1%, still at historically very low levels. Elsewhere we await further clarity on 25% tariffs on Mexico and Canada and China’s 10%
• After a week of market falls on Wall Street, Federal Reserve Chairman Jay Powell came out at the end of the week and said that while there continues to be increased uncertainty in the outlook, the US economy “continues to be in a good place”. Expectations for further rate cuts were pared back
• The ECB cut rates by 25bps (0.25%), its sixth cut since June, taking the main deposit rate to 2.5%. The ECB stated that inflation would take slightly longer to reach 2% with monetary policy described as “meaningfully less restrictive” and that it was now switching to a more “evolutionary approach”
• German bund yields spike at their fastest pace since reunification in 1990 following a paradigm shift in fiscal policy by Chancellor-elect Merz. At the heart of his proposals is to create a special €500bn fund to repair Germany’s creaking infrastructure, as well as loosening stringent budget rules (known as the “debt-break”) to allow more investment in defence
• Bitcoin continues to fall, now trading below $85,000

COMPANY NEWS

• Broadcom’s quarterly results beat expectations with strong AI semiconductor and software sales, offsetting weaker non-AI semiconductor performance. They potentially have two further AI ASIC customer engagements (customers #6 and #7 - one rumoured to be Apple).  CEO Hock E Tan reiterated the headline grabbing $60-90bn serviceable addressable market (SAM) from the three initial hyperscalers, reminding investors that there are two more in addition to this figure. He is now talking about two further that are “deeply engaged” - so seven total. The shares rose 9%
• But while Broadcom is the undisputed leader in manufacturing connectivity switches and custom AI accelerators, Marvell Technologies is a close second. Yet Marvell shares plummeted (down 20%) after its quarterly results beat expectations, but guidance fell slightly short of some very lofty expectations
• Ashtead quarterly profits and revenue came in a bit lower than expected as a slowdown in US construction markets begin to bite
• Reckitt Benckiser shares rose after quarterly profits beat expectations, despite lower sales. Looking ahead, Reckitt expects like-for-like core revenue growth of 3-4% in 2025
• The German hand break is off and this includes a €200bn increase to defence spending, in order to keep Trump onside. In reaction there were significant moves in the sector as German Rheinmetall closed up 13.7%. Other stocks such as Italian Leonardo and British BAE Systems also headed 16.1% and 15.2% respectively higher
• Short v long term. Melrose finished significantly lower after reporting full year results that beat most metrics, however there were concerns over the company’s pre-tax loss of £106m and the negativity towards the short term guidance with operating profit of £700m. Further out things look good with 2029 revenue forecast to be £5bn leading to free cash flow and potential buy backs
• Greggs finished lower even with results beating most expectations. Management called out challenging weather in January as trading improved in February. There was also no change to their expectations for the year and they have a strong pipeline of shop openings
• Capri Holdings rose following reports that it was moving closer to selling Versace to Prada for $1.6bn

TECH WEEK

Amazon is finally launching its long-awaited AI version of Alexa, the imaginatively titled Alexa Plus. Alexa Plus is $19.99 per month, or it is free for Amazon Prime Members which is not a bad deal given Amazon Prime (in the US) is $14.99 per month

Meanwhile, Bloomberg reported this week that Apple’s promised overhaul for the Siri digital assistant is facing engineering problems and software bugs. The Siri makeover is the centrepiece of the Apple Intelligence platform, the company’s attempt to catch up on AI and encourage iPhone upgrades

TWTWTW

Abrdn announces it will change its name back to…you’ve guessed it…Aberdeen (Aberdeen Group officially)

When it paid branding agency Wolff Olins an undisclosed sum to come up with ‘Abrdn’, it joined a long list of controversial rebrands. Fans freaked out when Dunkin’ dropped the Donuts. Others groaned when Weight Watchers became WW. The Post Office was briefly Consignia, while PWC Consulting spent a short time as ‘Monday’

More recently, events and media company Reed Elsevier changed its name to Relx, and Reckitt Benckiser switched to RB and then Reckitt and Spirax Sarco has dropped its surname

Whenever a new brand name comes along, even when the change is benign, it must prepare itself for criticism – rightly or wrongly. Abrdn’s CIO at the time even claimed they were the victim of “corporate bullying”. Aplgs

THE WEEK IN HISTORY

1933: Despite pressure, the Federal Reserve refuses to recommend a guarantee on banking deposits, setting up the most significant banking crisis in American history

2020: In a televised press conference, Boris Johnson reassured the country that the government would “contain, delay, research, mitigate” the impact of the coronavirus and urged people to wash their hands for the “length of time it takes to sing Happy Birthday”. He also “boasted of ‘continuously’ shaking hands with people, including Covid-19 patients”. He was hospitalised and in intensive-care a month later