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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May 16, 2024

US inflation dip risks melt-up

Macro

USD and 10-year Treasury yields weakened after yesterday’s lower-than-expected US inflation data. All the recent indicators of financial stress, such as the USD/JPY, moved back from warning levels. 

Recent liquidity-fueled favourites, such as meme stocks, Bitcoin and silver, all rose strongly.  Legendary market strategist Ed Yardeni wrote that if the Fed cuts rates prematurely, it risks triggering a market melt-up.

Critically for the UK, with the £ hitting the $1.27 level, UK rate reductions look much more likely. 

UK Companies

M&C Saatchi is trading in line with expectations and on track to deliver £10 million of annualised cost savings.

Premier Foods FY results following the successful de-risking of pension obligations and the suspension of deficit contribution payments show that the group has opportunities to invest in the business at attractive returns to increase efficiency and innovation. The group is continuing to explore M&A opportunities and apply its progressive approach to dividends.

Sage Group H1’s revenue growth and significant margin expansion have been underpinned by continued investment, enabling further growth.

Watches of Switzerland is cautiously optimistic about trading in FY25.

H&T is seeing buoyant demand for pledge book loans. With the increase in the gold price, more items are being sold for scrap value.

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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.