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 30, 2022

Powell speaks later

Macro & Overnight

US bond investors are waiting for hints of the future interest rate trajectory later. Most recently, FOMC members have been talking about higher rates for longer. This evening we hear from the boss as Fed Chair Powell speaks at the Brookings Institute. Pivot-hungry investors remain impatient.

Oil prices steadied, and European gas prices firmed. OPEC meets this weekend.

Apple had its 4th straight day of losses as it is caught up in issues in China.

China’s official PMIs for November showed seven-month lows, with services and manufacturing sectors in contractionary mode as the Covid restrictions continue to hamper activity.

UK mortgage approvals are now at their lowest rate since June 2020. Expect job losses in mortgage processing, conveyancing, property valuation and estate agency.

UK Company News

The Times reports that M&S is acquiring the IP and people of online fashion business Thread after the fashion-tech startup fell into administration. This is an excellent example of how well-financed old-economy businesses can benefit from the difficulties of unprofitable tech companies, whom themselves are struggling as the free-money era ends. Expect more of this type of deal to be able to add growth to established businesses. 

IG Design believes its FY results will be ahead of expectations. The giftware supplier reported a strong order book in a challenging cost environment. However, better working capital management has mitigated increased interest costs. See our note here.  

The speciality chemicals company, Elementis, is selling its chromium business to Yildirim Group for an enterprise value of US$170m. This transaction values the Chromium business at 7.3 times EBITDA (12 months to 30 June 2022). The disposal is in line with its stated strategy. 

Online media company Future expects to deliver modest profit growth in FY 2023. The acquisitive company returned H1 results in line with expectations.

Environmental investor Impax Asset Management reported in-line results. The company commented that regulators are increasingly examining the appropriate use of “ESG” and sustainability-related terms in promoting investment products. The company believes these proposals will “broadly help reduce greenwashing” and those investment managers with robust practices in this area should benefit from additional demand from asset owners. Government assistance in moat building is always helpful. 

Kettle component supplier Strix warned that the disruptive effect of Chinese lockdowns has adversely impacted them. The Board recognises that these uncertainties could continue into 2023. 

Gamma Communications CEO appointment has been confirmed, and XPS Pensions has a new Chairman. 

Prognosticator 

 

On This Day ...

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