Walker Crips' Market Commentary

Last week saw the shares of JD Wetherspoon, the owner and operator of pubs throughout the UK and Ireland, increase by approximately 8.7% after announcing a trading update. The update demonstrated that trading was in line with market expectations and in the last 10 weeks like-for-like sales were 11% higher than 2019 levels. The company also announced a small improvement in expected utility costs, r...

The UK’s FTSE 100 saw a decline of approximately 3.4% last week. The index closed Monday’s sessions at 7,274 as sticky inflation and rising interest rates continue to be an area for concern. Bank of England (“BoE”) Governor, Andrew Bailey, stated in an interview with the BBC his continued commitment to bringing inflation down. Bailey did not provide a timeframe for when rates might peak or begin t...

Sage Group, the cloud-based business management solution company, saw JP Morgan analysts upgrade the stock to overweight from neutral. This resulted in its share price increasing by approximately 6% last week. The company is expected to deliver sustainable double-digit organic revenue growth until 2025. JP Morgan believes there is room for further revenue growth between 2026 and 2030 with the comp...

The beginning of last week saw investors and some sell-side economists speculating that market estimates for the Bank of England (“BoE”) rate outlook may have been too aggressive. At the start of the week, markets were pricing a peak rate close to 5.75% based on forecasts for inflation figures on Wednesday to decelerate to 8.4% from 8.7% in May. However, when Wednesday arrived, inflation figures u...

Smith & Nephew, the British multinational medical equipment manufacturer, saw its share price increase by approximately 5% last week. The increase in share price was triggered as a result of Smith & Nephew receiving Food and Drug Administration ("FDA") clearance for its AETOS Shoulder System. This is the latest solution in Smith & Nephew’s expanding Upper Extremity portfolio and is des...

The UK housing market was one of the key areas of focus this week as UK Halifax house price data was announced. The data showed a flat reading in May, but on an annual basis prices fell 1% versus consensus for a 0.9% drop. This was the first annual decline in prices since December 2012. Halifax did highlight that given the flat monthly reading, the annual decline reflects strong house price growth...

Dechra Pharmaceuticals, a business involved in the development and marketing of veterinary products, saw its share price increase approximately 15% last week. This was after a cash offer made by Freya Bidco Limited for the entire issued, and to be issued, ordinary share capital of Dechra for 3,875p per share. This represented a 44% premium to the closing price of 2,690 pence on the 12th April, the...

Nvidia, the American multinational technology company, announced first quarter results last week which beat expectations and sent the share price soaring approximately 24.6% last week. Nvidia issued guidance for substantial sequential revenue growth in the second quarter as demand for content-creating artificial intelligence bolsters its data centre platform. The company said that revenue has been...

Informa shares increased approximately 4% last week as it was announced the company had reached an agreement to acquire Winsight for $380 million and that its acquisition of Tarsus completed ahead of schedule. The acquisition of Winsight is expected to accelerate Informa’s growth by offering expansion within the business-to-business foodservice market. Informa’s acquisition is also expected to del...

Beazley is a UK-based global specialist risk insurance and reinsurance company. Last week the company issued a trading statement announcing its net income at $104 million for the quarter ended 31 March 2023, marking a recovery from a loss of $92 million in the prior-year period. Management also remained confident in its growth guidance of mid teens gross premium written and mid 20s net premium wri...

HSBC reported strong first quarter results this week and announced record profits as the bank benefited from the new era of higher interest rates and the rapid reopening of China. HSBC reported profit before tax of $12.9 billion, up $9 billion compared to the first quarter of 2022, an increase of approximately 230%. HSBC also saw revenue increase by 64% to $20.2 billion which was largely driven by...

It was a big week for Microsoft with the announcement of third quarter results alongside the announcement that the proposed $68.7 billion acquisition of Activision Blizzard had been blocked by the Competition and Markets Authority (“CMA”). The CMA expressed concern that Microsoft’s proposed acquisition of Activision Blizzard would harm competition in the fast-growing cloud gaming market. It appear...

The UK is showing that inflation continues to remain stickier than forecasted as consumer price inflation for March slowed by less than expected to 10.1% from 10.4% in February. The largest downward contributions came from motor fuels and heating oil prices, alongside soaring food prices which weighed heavily. Notable rising food prices included olive oil prices rising 49% in the year to March, su...

The UK stock market saw gains last week as the FTSE 100 index climbed by 1.8%. It was announced that the UK economy stagnated in February as Gross Domestic Product (“GDP”) showed zero growth, largely as a result of the widespread industrial action which led to a disruption in productivity. GDP was below expectations of a 0.1% increase and even further below January’s 0.4% growth figure. The larges...

The Easter bank holiday saw many people enjoy a longer weekend as markets were on hold for a couple of days. Nonetheless, news was still plentiful as global markets continued to move in multiple different directions. One of the key news stories was that Saudi Arabia made a surprise decision to cut oil production by 500,000 barrels a day, alongside other OPEC+ nations joining them to result in a to...

Last week, revised official data revealed that the UK avoided a recession last year, helped by the energy bill subsidies provided by the government to ease pressures on households from the cost of living crisis. Notably UK GDP grew by 0.1% in the 4th quarter demonstrating the UK economy is still seeing some growth. However, there are signs the housing market remains weak as Nationwide said house p...

March madness had a different undertone this year as investors faced market volatility and renewed uncertainties brought upon by a regional banking crisis. The Bank of England (“BoE”) raised interest rates to 4.25% from 4% in an eleventh consecutive monthly increase. Minutes from the meeting showed that the Financial Policy Committee told policymakers before the vote that the "UK banking system ma...

As European and US indices turned lower last week, investors were left pondering: can multiple financial rescues and a government budget keep a hibernating bear at bay? Last autumn, UK pension funds that use liability driven investing as a core investment strategy were the first to experience a mismatch in assets and liabilities, necessitating a liquidity backstop. The Bank of England had to step...

It was always going to take a big news story to divert the attention of equity markets away from hanging on every word that Jerome Powell (Chair of the US Federal Reserve, "Fed") utters about inflation and the likely path of interest rates. The sudden collapse of Silicon Valley Bank ("SVB") proved to be just the story. To put it simply, the Fed's policy of aggressively raising interest rates has h...

In the US, the S&P 500 closed 1.9% higher for the week, regaining some of ground lost through February where it declined by 2.6%. There were a number of important economic reports in the week, however their mixed nature meant there was a lack of noteworthy catalysts for performance. The Institute for Supply Management's (ISM) manufacturing Purchasing Managers' Index (PMI) came in higher in Feb...

Global equity markets experienced slight declines over the week, with share prices stagnating from the market rally which began in October. In fixed income markets, yields broadly increased amid further anticipated interest rate rises and this put downward pressure on prices. This has also negatively impacted residential property with increased mortgage costs leading to price declines for the fift...

The UK’s FTSE 100 index broke through the 8,000 barrier for the first time last week, carrying on its momentum since the start of 2023. However, we should not lose sight of the fact that the FTSE 100 does not really represent the overall UK economy, as it is, of course, heavily weighted towards BP, Shell, mining stock and banks. All of which are benefiting from the reopening of China and likely re...

Improving Global Purchasing Managers’ Index (“PMIs”) data and a much better-than-expected employment report have recently given investors new confidence that the economy can avert a near-term recession, boosting market sentiment and stock prices. Meanwhile, the US Federal Reserve (“Fed”) has remained largely steadfast in its hawkish messaging, increasing the likelihood of additional 0.25% rate hik...

Newsflow over the past week was dominated by Central Banks as they continued to tighten monetary policy in their ongoing fight against inflation. Perhaps most importantly for global markets, the US Federal Reserve ("Fed") increased its funds rate by 0.25% to a target range of 4.5 - 4.75%, marking the 8th increase (albeit the smallest rate of increase) since March 2022. The Bank of England and the...

Warren Buffet compared the stock market to a voting machine and a weighing machine in a letter to Berkshire Hathaway shareholders back in 1987. In the short term, it can be influenced by ever-changing public opinion. But like a weighing machine, over the long term, what truly matters is the concrete, measurable financial results that determine its true value. This idea is relevant to the current s...