Weekend ending 13/09/24 – Buckle up for the soft, hard or crash landing.
This week, Jeremy and Gareth discuss the prospects for a soft or hard landing for the US economy. While bond and oil markets are pricing in a recession, other markets like gold and the yen suggest financial market stress. However, while the US inflation prints are softening, the main focus for policymakers is jobs. Equity markets are skittish and indecisive, with the AI bubble coming and going, as measured by a volatile Nvidia price, which ended up 15% over the week. On the other hand, concerns about their economic sensitivity hold back flows into value and smaller cap companies.
The economic data in the UK have not been great, but they are OK. GDP is flat for the second consecutive month, and employment data is mixed.
Ashanti's agreed £2bn offer for Centamin this week highlights the huge disparity between the price of gold and the valuation of gold miners. Evidently, the cheapest way to acquire gold reserves is via M&A rather than digging.
Gareth discusses Gamma Communication's positive financial results and its development of valuable relationships with Microsoft and Cisco. Given its growing ambition, Gamma plans to move from AIM to the main market.
Jeremy highlights news this week from Alpha Group, where founder and CEO Morgan Tillbrook announced plans to step aside in favour of Non-Executive Chairman Clive Kahn. Alpha shares weakened as Clive is not well known in public markets. However, his strong track record in the global payments and FX world with Travelex and World Pay, among others, makes him a strong candidate to take Alpha Group to the next level.
Next week, we could see a re-run of August's yen carry trade volatility with the US rate decision followed by Japan's inflation data and the BoJ's rate decision the following morning. The consequences of an unexpectedly high (>3%) Japanese CPI print could set things off again.
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