The Week Ahead (20-24 January): WYN, BRBY

17th Jan by Megan Boxall

10 comments 1687 reads

News flow has picked up in the UK this week which, combined with some positive economic announcements, has prompted some cautious optimism in the equity markets.

On Wednesday we heard that inflation figures for December weren’t as bad as many had feared, falling to 2.5% (from 2.6% in November). This was followed by lower than expected inflation data in the US, which may have opened the door to a quicker cut to base rates. The Bank of England will make its next decision on 6 February and traders are currently forecasting an 80% chance of a 0.25 point cut to the rate, which currently stands at 4.75%

The inflation data has sparked a rally in the price of bonds, providing some respite after a rough start to 2025. The yield on 10-year gilts fell to 4.73% on Wednesday, their best day since 2023.

The FTSE has rallied slightly in response - a welcome change after bond markets received the most positive inflows for the first few weeks of the year.

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In company news, I must extend my congratulations to Graham, Roland and Mark who have done a remarkable job this week summarising all the trading statements and company updates. You can catch up on all of their analysis via this blog.

There are a few stories which caught my eye:

IG’s £160m acquisition of Freetrade. Graham likes IG as an investment and I like it as a customer, but I am non-plussed by this acquisition. Freetrade has £2.5bn in assets under management, which is less than what IG’s customers held in cash in their portfolios at the last set of results. The average portfolio size is just £3,400 (which is too little to make money off) and each customer contributed an average of £38 in revenue last year which, as my Dad pointed out to me yesterday, is less than the local sweet shop makes from children who drop in on their way home from school.
Frontier Developments which enjoyed a big share price leap after instilling some confidence in this week’s trading statement. I covered FDEV in the last week ahead. It’s had a torrid time in the last few years, despite its strong product offering. But in the first four weeks of the 2025 financial year,…

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Andy Garsed

17th Jan

Hi Megan, Thanks for your summary of WYN (I hold). The full-year results to 31.10.24 will be announced on the 28th January. New CEO Alk Brand and CFO Rob Thomas will be holding a webinar that day. There have been and still are challenges facing farmers. In addition, more than one institutional investor has been selling down holdings of this AIM stock, even though they will have invested at significantly higher prices. Hopefully, green shoots are around the corner!

dscollard

worth noting that the FTSE 100 closed at an all-time high today - first time in its 41 year history it closed above £8500 with 93 names in green and good few price breakouts that suggest this move may have legs. Maybe we will finally get some love in the UK?

China data overnight has helped given that basic resource stocks did a lot of the lifting today but Banks put in a huge week with double digit gains from LON:BARC LON:LLOY LON:NWG

Brent oil supporting the oilers remains above $80 up 1.2% on the week , Dr Copper ending the week strong up 3.1% supporting miners with Gold +1% and silver outshining +2.3%

FTSE 250 rallies 5 % This Week

Big move in bond yields on better CPI data was the real spark that set fire to mid caps and saw the FTSE 250 reverse over 5% losses in 2025 to close the week within a gnat's proverbial of green on the year as REITs, Utes and home builders rallied in relief at the prospect of rate cuts to come -

click to enlarge

- the sector price momentum plot below show the REITS, Insurance, Utilities and Homebuilder sectors outperforming on the weekly axis.

Plot of UK Median Sector prices Daily % versus Weekly % click to open larger image

Solid performance from Banks Oil and and gas Miners in the FTSE 100

FTSE 100 weekly Heatmap - click to enlarge

Week ahead in UK Earnings - interactive calendar here

Table Key

Names in red are bearish (price blow major moving averages)

Table shows a Bear -10 to Bull +10 score and includes Short interest % (FCA daily last update today 17 Jan 25 ) with some basic price history

Click on table to enlarge

30 UK Companies set to Report w/c 19 Jan 2025 by Sector

jeff narin

18th Jan

Excellent work. Nice to see some comprehensive and visually impactful analysis of whats moving and whats not. Maybe you should teach Megan how to use PowerBI?

Just kidding, Megan, but they say a picture is worth 1000 words.

Thanks, appreciate that... although it's less about the tool and more about the process and encoded knowledge & analysis...that's taken decades to develop

Epitychia

Thanks dscollard. Very useful.

Although FTSE100 only now breaking an all time high just illustrates how much it has lagged inflation.

timarr

You have to adjust for dividends, which the FTSE100 is top heavy in. The FTSE100 Total Return is about 100% over the last decade, a CAGR of about 6.7%. That comfortably outstrips inflation, but still lags the US indexes significantly.

We also have to take into account the extraordinary generational outperformance of the Mag7 and the economic chaos in the UK since Brexit which has depressed valuations.

Humans can't help projecting current conditions indefinitely into the future, it's been an effective survival heuristic for most of our history. However, as investors in Fundsmith, Buffetology and Lindsell Train can attest, it's not a reliable approach to stockmarkets over longer time periods.

Rusty2

The £ is also down about 20% against the US$, from before the Brexit vote.

The S&P500 is up nearly 3x in the last decade. The FTSE100 about +30%. One site has FTSE100 +72.5% total return, in the last 10 years, upto 2024. S&P500 +313.7%.
UK inflation looks to be around 35% over last 10 years.

Good to see you are still here Tim, been a long time, the halcyon days of Scotty and the SCVR shenanigans

We also also have a tendency to lose some our gems to the US - ARM comes to mind now a Nasdaq quoted former FTSE100

19th Jan

I remember Paulypilot's Pub back in TMF days. Paul was really crazy then!

To be fair it's not just the UK, markets everywhere are suffering from the gravitational pull of the vortex of the US markets. One day it'll reverse direction but while the music plays ...

ARM was a particularly painful loss though, collateral damage from Brexit when May was desperate to show the UK was "still open for business". But current valuation ... hard to fathom when other US semiconductor stocks look reasonable value.

TStubbs

20th Jan

I love this new summary, and the daily reports have picked up greatly in interest since adjusting to the new normal.
One thing that has changed that might be an easy fix, I don’t know? The info grids - summary boxes, used to be the width of the phone screen so you could see all info at a glance, even with about 7 headers- nowadays it’s wider than the screen and you need to scroll back and forth as you read down the page. A bit of an inconvenience tbh. Any chance that formatting could be changed back?

All your work and the work of the team is fantastic but I do have one more observation, I don’t understand the need to finish the daily report by 12:30/1 - it’s hampering you all covering the markets on days with lots of news. I appreciate you all start reasonably early but it adds pressure with backlog and feels like a PS requirement hangover? All round benefits if that’s possibly looked at?

Anyway, thanks all for all your input, hard work and knowledge. And to the regular posters who also share expert knowledge and points of view- it keeps this place a place of learning and a super resource to help the rest of us muddle through.

The Week Ahead (20-24 January): WYN, BRBY

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Megan Boxall

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