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 24, 2022

Market likes Boris’ failed re-fenestration

Macro & Overnight

£ stronger, Yen weaker and $ steady.

US markets ended last week rallying on noises from FOMC members suggesting that the Fed pause might be closer than the market is expecting.

After Boris’ failed weekend attempt at re-fenestration into N0 10, Sunak will likely become PM, and Hunt will likely remain CEX. The October 31st date for the financial statement remains critical. Are we ready for Rishi to tell us the truth? More to the point, can the UK 30yr gilt handle it when they give it to us?

But gilt yields are today lower (prices higher) first thing and the £ stronger.

Delayed China GDP numbers were released yesterday and at 3.9% were below the target rate of 5.5%. This led to a broad sell off in Chinese equities.

Energy markets remain in retreat. Oil is 3% lower at the London open. Gas prices in Europe have collapsed in recent days as LNG tankers line up off Cadiz with no where to store it. Europe’s tanks are full, reminiscent of when WTI oil went negative in 2020 as there was nowhere to put it. Meanwhile the weather in Europe is warm and windy, so who needs LNG anyway? Supply chains are tricky things. This market will remain volatile.

UK Company News

In the UK there is increasing talk of a windfall tax on banks. EY has released a survey saying UK profit warnings are at a 20 year high coming mainly from consumer and hospitality sectors.

Ted Baker left the UK listed market as the offer from Authentic Brands completed on Friday.

Mike Ashley has been busy in his new development role, with Frasers taking a more than 5% stake in ASOS and increasing its strategic stake in Hugo Boss.

Software supplier Cerillion guided that its profits will be materially ahead of current forecasts demonstrating that telecoms company customers are increasing looking to move their data into the cloud.

Benchmark, the aquaculture biotechnology business is raising forecast guidance.

Media tech supplier Aferian issued a warning  re order delays.

Measuring equipment supplier SDI has acquired a market leader in the anti-static space.

Finally, just to show that the UK can provide world beating product development Cranswick is supplying the breaded-chicken for MacDonalds’ first permanent new chicken innovation since the McNugget. They describe the McCrispy Burger as “the crispiest, crunchiest chicken burger ever”. Can’t wait.


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