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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November 15, 2022

Eight billion and counting

Macro & Overnight

China reported slower-than-expected growth in factory output and retail sales for October.

At the G20, President Xi said, “Developed economies should reduce the negative spillover effects of their monetary policy adjustments and stabilise debts at a sustainable level”. A not so veiled attack on the US regarding the strength of its currency.

UK share price moves yesterday signalled increased conviction of increased windfall taxes on energy company profits in Thursday’s Autumn Statement.

UK unemployment edged higher in the three months to September. The number of days lost to strikes reached a 10-year high, and wage increases failed to keep track of inflation.

In a piece of informed kite flying, The Times suggests that the government will increase the NLW by 9.5% from 950p to 1040p. Such a move would align with the rate recommended by the Low Pay Commission but is nonetheless at the upper end of market expectations.

Gilt yields continue their gentle decline, and Sterling has breached 1.18.

Precious metals prices had another strong day, largely mirroring the weakening $.

The world’s population has reached eight billion. Depending on your view of humanity’s progress, either good news or not so much. However, the great Hans Rosling’s framework for understanding demography is always worth watching. This from 2010 is worth 10 minutes of anyone’s time today.

UK Company News

Scotch Malt Whisky Society owner Artisanal Spirits have commenced operations at its new supply chain facility at Masterton Bond. Once fully operational, this facility will improve operating margins by c.2%, with the initial benefits expected early in FY23.

Hospital software supplier, Craneware‘s AGM statement gave confidence in its ability to navigate macroeconomic challenges.

Logistics supplier DX had FY results. Following a period of suspension, DX has a new chairman and reported that trading is in line with management expectations.

Gear4Music, the online retailer of musical instruments and music equipment, reported a more normalised post-COVID trading environment. Improved trading momentum during FY23 H2 has continued into November. Progressive note here.

Toy vendor Hornby has a new CEO starting next year.

Buy and improve industrialist Melrose updated investors. The company is trading in line with expectations. Group revenue is 14% up on the same period last year, and operating profit is substantially higher.

Tools and equipment hire services company Speedy Hire reported that improved pricing is helping to mitigate inflationary cost pressures. Strong service revenue also gives increased confidence in delivering results aligned with expectations.

Logistics supplier Wincanton won new business and made further progress with investment into automation and robotic solutions. Although resulting in higher depreciation, the company is still expecting an inline outcome.

Shared workspace provider Workspace continued to see resilient levels of customer demand. Strong letting activity highlights the appeal of its flexible offer. Workspace owns a portfolio of attractive locations and reports strong occupancy levels.

 

Prognosticator

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