Week Commencing 9th October 2023

The War in Israel


Major Indices

Index Performance
S&P 500 +0.45%
DOW Jones -1.09%
NASDAQ +0.15%
FTSE 100 +1.40%
DAX -0.28%
Nikkei 225 +4.26%
Shangai Composite -0.72%

World Sector Performance

US Inflation Surprise

September's Consumer Price Index came in hotter than expected at 0.4% MoM and 3.7% YoY. Core CPI gained 0.3% MoM and 4.1% YoY however which was in line with expectations and is perhaps a more useful indicator for the effectiveness of the FEDs policymaking. Shelter costs were the key driver of the inflation increase, accounting for more than half of the rise. Shelter accounts for approximately one third of the index and rose 0.6% in August. Markets did not seem too phased, with equities edging higher at open on Thursday and Treasury yields bouncing upwards slightly.

US CPI YoY change (%) since September 2023 (U.S. Bureau of Labor Statistics)

China's Inflation data

China consumer prices stall as CPI was unchanged from last year, despite a 0.2% increase expected. PPI continues to fall for the 12th consecutive month, although the pace of decline has slowed. State run media have reported that Beijing will potentially increase the amount that local governments can borrow.The IMF have lowered their growth forecasts for China due to the nations property crisis and weak external demand. Developers accounting for 40% of Chinese home sales have defaulted on their debt obligations since 2021 according to JPMorgan, and have issued around $110bn of high yield offshore bonds.

China's CPI and PPI since 2021 YoY (LSEG Datastream)

Birkenstock is Live!

Unlike ARM's IPO, Birkenstock shares fell significantly on their open day, by 13%. The German sandlemaker completed the third largest US listing of the year, and ended the day with a market capitalisation of $7.6bn based on shares outstanding. The chief executive said that they are a company focused on long-term sustainable growth. This deal raised almost $1.5bn for the company and their private equity owner, a lot of which will be used to repay debt.

Microsoft Acquisition of Blizzard

Microsoft have won final approval from the UK's CMA for their £56bn acquisition of Blizzard. This comes after they had previously blocked the deal back in April 2023. This will help Microsoft in their pursuit of Sony, who currently ou-perform Microsoft in terms of revenue from Playstations vs Xbox's. This is Microsofts largest ever purchase and one of the largest in the history of tech. Blizzard generated $7.5bn in revenue in their last fiscal year, in comparison to Miicrosoft's $212bn.

Oil Prices Due and the war in Israel

Oil has jumped above $90 a barrel amid fears of escalation in the Israel-Hamas war. Israel have warned over a million people to leave Gaza. Many analysts believe that oil is on its way towards $100 which has not been reached since August 2022. There is still a lot of room here for prices to jump further should this war escalate. JPMorgan analysts said there has been 'no immediate impact' on global oil production, and that the conflict is unlikely to 'trigger a substantial surge' in oil prices by the end of the year.

Crude Oil Prices (TradingView)

Other Headlines

Coming Up Next Week...