News & Insight • Weekly Newsletters

28 March 2025 | Charlie Todd | William Buckhurst

That Was The Week That Was

MACRO

Spring fiscal events are dead. Long live Spring fiscal events. Rachel Reeves delivered her Spring Statement, which didn’t have much new news. It had roughly 30 policy measures compared to the Autumn Budget, which featured nearly 75. The effect of government decisions come to £9.7bn in fiscal consolidation compared to October’s £35.9bn fiscal easing

It was stated that Russia and Ukraine had agreed to a truce in the Black Sea. Reports noted that the agreement includes ensuring safe navigation and restoring Russia’s access to the world market for agricultural and fertilizer exports. The truce would come into force once sanctions are lifted on Russian banks and agricultural exporters

March preliminary Eurozone Manufacturing PMI was 48.7 vs 48.2 expected with the Services PMI of 50.4 below consensus estimates. PMIs in France were better than expected with German data mixed. In the UK, Manufacturing PMI was poor at 44.6 vs 47.2 expected with Services rebounding to 53.2, higher than forecast

President Trump announced 25% tariffs on auto imports and indicated that nations would receive breaks from “reciprocal” tariffs next week. Trump’s comments led to uncertainty over what tariffs would go ahead on 2^nd April, which he has dubbed “Liberation Day”. He also highlighted tariffs of 25% on countries purchasing oil from Venezuela, (which is mainly the USA, oddly) pushing oil higher

The Gold price shot through $3,075/oz this week

COMPANY NEWS

• Shell is focusing on gas. The company held its capital markets day stating that it would increase shareholder distributions to 40-50% of cash flow (from 30-40%) whilst maintaining a 4% increase per year dividend
• WH Smith has announced that it has agreed the sale of its high street business to Modella Capital for an enterprise value of £76mn, while it keeps the travel business (c.85% of profit), the brand name and Funky Pigeon business. The shops will rebrand as TG Jones
• Is Lord Wolfson the best retailer at the moment? Next defied consumer gloom by announcing that its pre-tax profit increased 10% to £1.01bn as sales increased 8.2%, He commented that full price sales at the start of this year were above expectations
• Toyota shares fell 4.5% after being hit by US auto tariffs news and a downgraded recommendation by a broker
• US investment bank Jefferies was supposed to be one of the main beneficiaries of the M&A action under a Trump presidency. The shares fell after reporting results as revenue declined 8.4% to $1.59bn (versus $1.86bn expected). We look forward to seeing the Q2 figures from Wall Street banks when reporting season starts in a fortnight
• Shares in H&M were flat as results were broadly in line with consensus estimates. Management commented that sales were expected to increase slightly while the negative effect of factors that impacted margins will already be significantly smaller in the second quarter
• Activist investor Elliott Management announced that it had built a 5% stake in German utility company, RWE
• Not so spicey. Shares in McCormick & Co, the food flavourings business, were flat post results. Organic sales growth in the quarter was 2% vs 1.7% expected with gross margins slightly higher than forecast
• The growth fizz seems to have gone from Fevertree Drinks as revenue only grew by 3% to £368.5m, however gross margins increased to 37.5% and with management increasing optimistic on the growth of the US business, they extended the company’s share buyback programme by £29m

SIR LEWIS HAMILTON

On the back of his sprint win in China, it was a mixed week for the companies linked to Sir Lewis Hamilton.

On the back of tariff news on autos, Ferrari, affectionally known as the prancing horse, was the only auto stock price that rose after the company announced it would raise prices by as much as 10% to deal with the new tariffs and while it noted that margins could fall 50bps as a result, it confirmed its full year financial guidance

Shares in Lululemon tumbled 14.2% lower even after reporting results that were records for the company on the top and bottom line. However, the guidance was particularly poor, with weakness pointed out in North America, its largest market. Sir Lewis is a brand promotor, but he seems to have his work cut out as management provided a cautious forecast for the year ahead and called out low brand awareness in every market to they sell in

BUILDING BACK BETTER?!

• Life in the building sector is still tough. Housebuilder Vistry shares fell 6.5% after reporting results. Profit was as expected (after their multiple warnings last year) with revenue rising 6% to £3.78bn. Their average selling price was £280k with total completions rising 6.9% to 17,225. Management commented that performance in 2024 was poor, and that profit would be better later in the year
• Shares in B&Q owner, Kingfisher fell 14.1% after reporting in line results. UK strength offset French weakness. The company guided to profits below expectations, but management stated they were confident medium term
• Over the pond, US homebuilder KB Home finished 5.2% lower after reporting results that missed expectations with revenue declining 5.2% to $1.39bn. Housing gross margin declined to 20.2% with net orders falling 17% to 2,772. The company cut its full year revenue guidance

TECH WEEK

TD Cowen released another note based around Microsoft abandoning further data centre projects. It stated that Microsoft has cancelled or deferred data centre projects in the US and Europe that were the equivalent of around 2GW of electricity due to an oversupply of clusters of computers. The note also indicating that Microsoft had chosen not to pursue some new business from OpenAI. It stated that Alphabet and Meta had stepped in to take some of the leases that had been abandoned

One of the largest planned IPOs this year, CoreWeave, had to cut the size of its offering to around $1.5bn, after initially looking for $4bn. After listing at $40 each, shares fell slightly to finish at $39. Nvidia, which is an existing investor in the company which started life as a crypto miner, was stated to anchor the share sale with an order of around $250m

THE WEEK IN HISTORY

1845: Mexico drops diplomatic relations with the US

1866: First ambulance goes into service