Good morning from Paul & Graham.
Today's report is now finished at 13:00
A big thank you to Roland for covering for me last week, so I could grab some time off in the lovely, unspoiled little island of Gozo. I'm out here for another 3 weeks, so alternating holiday & work from one week to another. Of course I can't stay away from the markets, even when on holiday, but it was relaxing not having to write reports every day. Anyway, off we go again!
Podcasts - I'm doing 2 each weekend now - one covering individual company results & trading updates in brief, and the second being general market/macro news & views. These went up on Saturday, here.
Also, I recorded a very interesting podcast with renowned investor Richard Crow, @ CockneyRebel, who as usual was full of interesting share ideas, and an upbeat assessment of the outlook, so that's worth a listen. The more I think about it, the more I suspect he may be right about the outlook for consumer stocks not being anywhere near as bad as markets seem to currently be assuming. We know about all the doom & gloom, but there are also some positive things on the horizon -
- Inflation set to fall from c.10% to c.3% by end 2023, according to the Bank of England and other forecasters.
- Interest rates - have probably nearly peaked, and won't need to be at this level once inflation has been tamed. Dangling the prospect of falls in interest rates, which of course would be very nice for asset values such as shares. IMF report on that here.
- Millions of households receiving big pay rises this month, of c.10% (state pension, benefits, and minimum wage all going up by roughly that %)
- Dramatic falls in wholesale energy costs, that "will be like a big tax cut" (R.Crow) once it feeds through into household and business bills later this year.
- Improvement in gross margins for non-food retailers in prospect, from collapse in the price of container rates to import goods, and factory gate inflation having ended, or even going into reverse, from factories competing for more cautious orders.
- Full employment, or at least very low unemployment - if that continues, then households are not likely to cut back spending further.
- Signs that many households are prioritising holidays & leisure, above buying more physical things - a buying…
