Market Prognosis

A concise summary of the major macro events of the past 24 hours, and selected UK company-specific news.

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October 20, 2022

Biden plays the oil market

Macro & Overnight

Equity markets were lower in North America and Asia. The pound was little changed at $1.1218, and the UK 10-year treasury yield continued to fall to 3.88%.

If you thought that UK politics couldn’t get any worse during the last couple of weeks, you haven’t been paying attention. All it is worth saying is that it remains volatile.

Meanwhile, energy markets are coming back to life as the US administration has effectively put a floor under the oil price by stating an intention to start to refill their depleted strategic reserves in the $67-$72 range. It is hard to know where to start, but just because it’s a warm start to Autumn in Europe and we have filled our gas tanks, this doesn’t mean the under-investment in our energy supplies over the past

UK Company News

A lot of Q3 and H1 updates today. No major warnings. UK consumer-facing companies seem to be bouncing strongly on in-line results, particularly where measures have been taken to refinance debt and reduce balance sheet risk. Solvency remains an in-vogue investment factor. For companies in the industrial supply chains, de-stocking and variable demand patterns are emerging as pain points. Among asset managers, overall, it is steady as she goes in choppy markets.

Homeware retailer Dunelm updated that trading is in line with expectations and unchanged guidance.

Software provider GB Group reported strong H1 rev growth with FY expectations unchanged.

Asset manager Jupiter’s Q3 update showed reduced AUM outflows and a new share buyback.

LED lighting provider Luceco Q3 update included downgraded guidance due to de-stocking among their customers.

Consultant RPS, subject to an agreed offer from WSP, showed decent revenue momentum.

Quarry operator Sigma Roc demonstrated in-line performance.

Wealth manager St James Place Q3 update saw strong inflows but has also been impacted by weaker markets.

Greetings card and gift wrap supplier IG Design had a strong update ahead of expectations citing stronger than usual seasonal demand.

Online musical instrument supplier G4Music H1 update shows improving trading, no changes to forecasts. Good operational performance, particularly with new European hubs.

Online wine supplier Naked Wines will now pivot to profits, announcing new debt arrangements, a one-time charge, and revised guidance. All this served to calm market fears.

AJ Bell, the investment platform, showed steady AUM and strong customer growth.

The industrial component supplier, Trifast H1 update, was OK but downgraded the outlook on the mixed demand picture.

The animal drug company Dechra Pharmaceuticals issued an in-line AGM update.

Builders’ merchant Travis Perkins maintained in-line guidance.

Consultancy XPS Pensions has marginally increased guidance following decent revenue growth of 14% yoy. Issues such as LDI are no doubt keeping them busy.


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