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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December 9, 2022

Oil prices at 12 month low

Macro & Overnight

Hopes of a US soft landing from last week have been overwhelmed by fears of a full recession this week.

US recession fears have driven oil prices to 12-month lows. Combined with a weaker US$, this provides significant global stimulus and reflation potential.

Meanwhile, industrial metals prices have recovered as investors assessed the potential for an economic rebound in China after the country loosened Covid-19 controls.

Exxon has increased its buyback plan from $30bn to $50bn.

Xi Jinping’s state visit to Saudi Arabia contrasts the contrived excuses and feigned fist bump of President Biden’s visit in August. But China is the bigger customer.

 

UK Company News

Financial publisher and events organiser, Bonhill has seen deteriorating revenues and expected losses for the remainder of 2022. However, there is more positive news about the sale of the business. 

Cookware vendor and IPO debutant Procook reported weaker sales performance than anticipated. Given the importance of this peak trading period, the company now expects full-year revenue to be between £60m and £65m, and PBT will be approximately breakeven.

Load bank supplier, formerly known as Northbridge, CrestChic, has recommended an offer from PE-owned Aggreko. 

Bulk shipping investor Taylor Maritime Investments opines that in 2023 “gradually lowering operating speeds to reduce fuel consumption and meet International Maritime Organisation emissions targets is expected to reduce effective supply. Over time, these new regulations and the IMO’s fuel efficiency rules should accelerate the scrapping of older, less efficient tonnage. This slowdown, combined with limited new vessel additions given a historically low order book and lack of yard availability, should keep earnings above historical averages over the medium term and support firm asset values”. OK, so buy ships. 

 

Prognosticator

 

 

 

 

On this day ...

… in 2019, Paul Volcker, Chairman of the US Federal Reserve (1979-87), died at 92. Fed Chair Powell has quoted the title of his autobiography, Keeping At It, many times recently when talking about the campaign against inflation.

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