Weekly Newsletters

01 July 2022 | William Buckhurst

That Was The Week That Was

MACRO

  • Bank of England governor Andrew Bailey said that UK inflation — which hit 9.1% in May and is forecast by the BoE to pass 11% in the autumn — would stay higher for longer than in other comparable economies thanks to unique pressures such as the government’s energy price cap and the country’s tight labour market, a situation exacerbated by Brexit
  • Copper dropped below $8,000 a tonne for the first time in almost 18 months as mounting fears of recession weigh on the world’s most important industrial metal

 

COMPANY NEWS

  • Siemens announced several acquisitions including US digital infrastructure and buildings software company Brightly Software for $1.58bn, and a minority stake in VW’s EV charging unit, Electrify America
  • Reckitt Benckiser reported that it was looking at scrapping the sale of its infant nutrition business. Reports indicated that the company was considering halting the sale after talks with potential acquirers stalled in recent weeks over concerns around price, lack of available funding and the ongoing issues around the shortage of baby formula in the US whilst the unit was expected to fetch around $7bn

 

SMALL CAP NEWS

Aston Martin closed down 8% on Thursday after issuing a statement following media reports that it was seeking new funds. The company stated that it was “keeping its funding options under review” and that any funding would be to support and accelerate its growth and that it continued to trade in line with expectations for the full year with a robust order book that has strengthened in recent months

With defence and oil and gas having been the best performing sectors year to date it was surprising to see the negative reaction to the Hunting results. H1 trading for the energy services provider has been in line with management expectations, with H2 performance continuing to indicate a further strengthening in revenue run-rate and a return to bottom-line profitability. With no debt and cash of $76m the future looked bright, however comments about the outlook worried the market and sent the shares materially lower (20%)

 

THIS WEEK IN HISTORY

1914: Stocks trade for the first day after the assassination of Archduke Franz Ferdinand on June 28th. The Dow Jones would have a very muted response to the news, closing down just 0.11 points. However, the mellow reaction would not last and just over a month later the NYSE would be closed from July 30th to December 15th, its longest close ever

2007: The first iPhone went on sale, starting at $499 for a 4GB model and $599 for the 8GB version (with a two-year contract)

 

IN OTHER NEWS

Winning at crypto: "North Korean hackers are really good. They look at very grey, new areas of cryptocurrency because actually: A) no one really understands them, and B) they can exploit weakness.” Eric Penton-Voak, UN North Korean Panel Coordinator

Whilst recession is clearly a topic, opinion is broad in terms of its likelihood: Deloitte are predicting less than 15% chance, Morgan Stanley and Goldman Sachs agree at 30%, Citigroup are on the fence at 50% and Deutsche Bank are calling it 'likely'

 

MARKET DATA

% returns

1 Week

1 Month

1 Year

5 Years

UK Equities (% return)

-0.88

-5.38

-3.10

-1.55

World Equities (% return)

-1.93

-8.05

-12.70

37.47

10 Year US Treasury Yield (%)

2.98

2.85

1.45

2.31

GBP / USD (fx rate)

1.21

1.26

1.38

1.30

 As at 1st July 2022. Source: Financial Express

 

 

 

 

 

 

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