Good morning, it's Paul & Jack here with Thursday's SCVR.

The volume of updates overwhelmed us yesterday, but the ones we missed were just in line with expectations, and didn't move much in price. When it's busy, we focus primarily on unusually good, or bad updates, as those are the ones that move share prices.


Brief preamble - inflation

By the way, one reader comment yesterday seemed to think I'm trying to set myself up as an economic forecaster, and (rightly!) cautioned on the futility of this. Just to clarify, when I do a preamble on the market, or the macro picture, I'm just airing my current thoughts on it, driven by news, as a discussion starter in the comments section. That also sets the scene for my investment decisions. For example, at the moment I'm not going to be buying any UK shares on toppy valuations (high PERs), because that type of stock has sold off big time in the US over the last year. The UK often follows the US, hence I feel risk:reward could now be unfavourable for highly rated shares. If they were still booming in the US, then I'd be more sanguine about paying up for a growth share here.

CPI inflation hitting 7% in the USA yesterday is another key piece of news, although the market seemed to take it in its stride (already anticipated?). That level of inflation hasn't been seen in the US since 1982, so it's bound to have a big impact on many companies. Inflation, and what happens because of it, is probably the biggest single issue we need to consider right now.

Look at Accrol Group (LON:ACRL) yesterday, which issued a profit warning due to higher input costs, but saying that it would pass them on to customers, but with a delay, thus hitting short term profits. Not good enough for the market - it hit the already battered shares by another 19%. So we ignore this issue at our peril.

Whereas Portmeirion (LON:PMP) has also suffered issues with cost inflation (especially freight), but grew sales more than enough to cover it, and issued a positive update yesterday, 9% ahead of profit guidance, leading to a 13% share price rise.

How on earth do we anticipate this? It's very difficult, and I think we just have to resign ourselves to…

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