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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April 9, 2024

Treasury yields continue to climb

Macro

We will get inflation data tomorrow in the US and China on Thursday, along with the ECB interest rate decision. We get UK GDP, US consumer spending, and China’s trade data on Friday.

US 10-yr Treasury yields are approaching 4.5%, up from a low of 3.75% at the end of last year. How much longer can bond and equity markets diverge like this?

UK Companies

Shell’s CEO suggested it might consider a US listing if the relative market valuations didn’t improve.  

JTC reported strong organic growth trends will continue with a pipeline of M&A opportunities. It said that “having achieved our Galaxy era strategic objective to double the size of the business in 2023, two years earlier than planned, we start 2024 with strong growth momentum towards our new Cosmos era goal to double the size of the business again.”

Microlise, the transport logistics technology provider, increased total revenue to £71.7m (13%) with gross profit +16% to £43.6m (FY22: £37.6m), at a gross profit margin of 61% and cash conversion exceeding 90% reflecting growth in subscription revenue and continued good working capital management. It has a robust balance sheet, with £16.8m cash and expects organic growth to improve from current levels. Its margins will trend upwards in FY24 and beyond. 

S&U motor finance and specialist lender detailed an increased impairment charge of £24.2m (2023: £13.9m), reflecting growing motor arrears during H2. Following a detailed assessment of the regulatory position in motor finance, it updated that, as Marcus Aurelius, a second-century Roman Emperor and Stoic philosopher, once said, “Sometimes the art of living is more like wrestling than dancing”. Confident in our people, business philosophy and the markets we serve so well, we wrestle on.”

Wrestling with regulators goes with the territory of financial services, especially when your customers are members of the public. 

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