Keenly watched as a barometer of not only the US but also the global economy, initial claims for unemployment benefits was higher than expected this week and compounded by a revision upwards by 55,000 in the claims for the preceding week meant that the market did not like it with USD weakening after two days of gains. The headline figure is that 18.3 million Americans were receiving unemployment benefits at the end of January. The weekly figures can as demonstrated be volatile and this week the release has been exacerbated by the auto manufacturers closing down production on some production lines due to a world shortage of semi conductor chips.
The German steel company has called off talks with UK steel company Liberty owned by Sanjeev Gupta. The war of words started immediately with the blame game in full swing last night with Thyssenkrupp accusing Liberty of making a lowball offer and in return Liberty saying it was incomprehensible that Thyssenkrupp had chosen to call it a day. In case you are wondering the gap is quite wide with Liberty valuing the steel division at negative EUR 1.8 billion and Thyssenkrupp seeing it as being zero to minus EUR 400 million. With GBP at a recent high versus EUR, that gap may not be quite as large as it seemed a few weeks ago.
News that VW is contemplating a stock market listing for wholly owned marque Porsche. The argument for doing so is clear cut: VW needs cash (lots of it) to get in the race for electric vehicles properly. Ferrari shares trade on a heady multiple of 32 times earnings which can in part be explained by Italian flamboyance and exuberance; the rest is due to the juicy margins on their cars. A more sober German multiple of for example 20 times Porsche earnings would deliver VW an amount almost equivalent to the value of the whole VW group at present. Porsche already has an EV product in the Taycan, so if you do not fancy a set of flash wheels, keep your eyes peeled for news of the listing. The shares may represent long term value. On the other hand, if you are looking for an excuse, Porsche do produce superb cars…!
Maybe unfair but Harry Nilsson did only have one number one hit. It was this day in 1972 that the Pete Ham and Tom Evans song released by Harry Nilsson went to number one and was a smash hit. In 1994 Mariah Carey also enjoyed huge success with Without You by staying in the Top 40 for 21 weeks.
Without You:
No I can’t forget this evening or your face as you were leaving
But I guess that’s just the way the story goes
You always smile, but in your eyes
Your sorrow shows
Yes, it shows
No I can’t forget tomorrow
When I think of all my sorrow
When I had you there but then I let you go
And now it’s only fair that I should let you know
What you should know
I can’t live
If living is without you
I can’t live
I can’t give anymore
I can’t live
If living is without you
I can’t give
I can’t give anymore
Well, I can’t forget this evening or your face as you were leaving
But I guess that’s just the way the story goes
You always smile, but in…
Have a Great Weekend!
Discussion and Analysis by Humphrey Percy, Chairman and Founder
European Interest Rates More momentum on rate cuts in the Eurozone as expectations grew for cuts starting in March and totalling 140bps in 2024. Equally in the UK cuts of 130bps starting in June are being pencilled in to market calendars. What this means is that GBP/EUR is looking more than especially good value at […]
I’m a central banker, get me out of here Ant and Dec were not present at the RBA decision overnight. However, based upon the reception of the decision, Governor Michele Bullock might rightly feel she was in one of the duo’s trials. Markets offered a frosty reception to the Reserve Bank of Australia’s latest interest […]
UK With 2 year mortgage rates less than 4% and 5 years at 4.39%, the implication for the housing market which has responded by a modest 0.2% rise, is that rates are soon going to fall and that the UK economy is stabilising. While there will doubtless be setbacks to this rose tinted scenario, for […]