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 7, 2022

‘Spoons will see it through

Overnight & Macro

A quieter end to the week. US equity markets were lower, the $US firmed up a bit, and the £ fell back modestly.

Gold and other commodities were subdued.

Oil prices were similarly quiet. However, this week’s OPEC+ production cuts caused Washington to consider extending its Strategic Petroleum Reserve release and suggested they might impose an export ban on oil and oil-related products. Crude prices seem now to have found a bottom and established a range of $80 to $100.

Investors continue to ponder how deteriorating economic data may change the outlook for US rate rises.

UK Companies

JD Wetherspoon announced solid full-year results. As always with Tim Martin, you also get a clear view (his view) of the day’s issues and how they affect the hospitality industry. His main targets remain ineffective UK lockdown policies and unequal tax treatment of on-sale and off-sale alcohol. For a company he founded 39 years ago from one pub in Muswell Hill, ‘Spoons is firmly established as the pre-eminent lowest-cost operator in a very challenged sector. They will survive this consumer downturn if anyone does.

Paving slab, block and tile manufacturer Marshalls, issued a negative update regarding the outlook for its landscape products division, reversing recent resilience seen by other building supply companies and indicating a deteriorating outlook for property repair, maintenance and improvement (RMI) spending.

Wincanton produced a solid trading update. Wincanton is a UK-focused transport and logistics contractor. It is growing in all areas. But particularly by focusing on areas like e-commerce fulfilment, including the tricky problem of managing returns, Wincanton is finding new growth areas. While end demand might be weak, companies continue to invest in optimising their supply chains.

PROGnosticator

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Opinions contained in this communication represent those of PERL and/or our affiliates at the time of publication and PERL does not undertake to provide updates to any opinions or views expressed. PERL does not hold any positions in the securities mentioned in this communication, however, PERL’s directors, officers, employees, contractors and affiliates may hold a position,  and/or may perform services or solicit business from, any of the companies or related securities mentioned.

Any prices quoted in our research are as at the previous day’s close.