UK holding its head above water
Macro & Overnight
Yesterday’s speech from Fed Chair Powell was interpreted as hawkish, sending US 10-year yields higher and equities lower. The most quoted highlight was “the Fed is not confident it has raised rates high enough to lower inflation to its goal of 2% in the next 2-3 years.”
Powell was more confident in telling a group of climate change protesters, in no uncertain terms, to close the door after they were escorted from the stage at the IMF.
The UK’s GDP data shows an economy keeping its head above water and defying recession expectations. The UK remains not so much a good news story as a not as bad as feared one.
The headline grabber from the data release will be the 20% YoY decline in UK construction orders. It’s hardly a surprise, but the trend is deteriorating.
UK Company News
Argentex, the FX and payments provider, warned that it expects to report revenue and operating profit for the year similar to last year, below current market forecasts. It is concluding a strategy review, which it will communicate to investors next year.
After the sudden CEO replacement announced two weeks ago and the resignation of the CFO yesterday, it is not surprising to see a warning from the company today. The Argentex share price has more than halved YTD and desperately needs anchoring to a new strategy. Having wrestled with the dilemma of the short-term attractions of voice broking versus the longer-term requirements to invest in technology, Argentex offers recovery funds an intriguing medium-term prospect. But such transitions are always easier said than done.
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