Market Prognosis

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

November 7, 2022

The forgotten “joy” of Little Chef & Happy Eater

Macro & Overnight

Persistent rumours that China’s Covid restrictions will be relaxed played a part in Friday’s risk-on rally.

Updates from Chinese health authorities over the weekend did not confirm anything. But a solid start to the week in Asia suggests investors are still anticipating changes that would benefit equities, commodities and energy prices.

US labour market data on Friday still showed resilient, albeit weakening trends for US employment. Talk of significant job losses at Meta and Twitter also featured over the weekend.

This week’s macro-events include US mid-term elections, US CPI data and COP 27.

The US mid-terms look likely to show Republican gains, but the question remains, will it be sufficient to flush out Trump’s campaign launch for 2024?

US inflation data will be watched to see if the Fed may be able to moderate its planned rate rises. While unlikely, this eventuality would be significant as investors are more negatively positioned.

120 world leaders and about 25 000 delegates will fly to Egypt this week to discuss policies and commitments regarding the future of the planet.

 

 

UK Company News

Ryanair has reported H1 revenue growth of 207% to €6.62bn and PAT moving from -€48m to +€1.4bn. The company is hopeful it can minimise winter losses this year. 

Prepayment provider Paypoint has agreed to acquire gifting and engagement company Appreciate Group (formerly Park Group) for cash and shares in what they describe as an earnings-enhancing acquisition. They will jointly target growth in: prepayment saving through Park Christmas Savings to support customers with budgeting tools for Christmas and other events; an enlarged full-service offering for gifting, employee rewards and benefits to Appreciate Group’s corporate clients; and an extended consumer gifting network for the Love2shop brand.  

Building products supplier Kingspan reported sales were up by +20% in Q3. In their outlook, they see cautious sentiment for the most part, although not uniformly so. The sharp increases in raw material prices over the last eighteen months appear to have peaked, at least for now.

Clothing supplier Joules continues to struggle and reported trading for the 11 weeks to October as behind Group’s expectations. 

Eastern Med oil and gas specialist Energean updated on successful drilling and appraisal. The region is moving closer to volume levels that could justify a second standalone development, which could attract higher international pricing to this increasingly crucial gas-producing area. 

CFD provider Plus500 has launched a new big data analysis product to help its customers trade more. Their website warns that 79% of customers lose money, which is good news for shareholders.  

Jez Maiden is due to retire from his role as Group Finance Director of Croda in 2023

Hospitality company Loungers has launched a new roadside restaurant concept called Brightside. For some reason, they seem keen to revive consumer memories of Little Chef and Happy Eater.  

Prognosticator 

 

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