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Happy Sunday: 9 May

Posted on May 09, 2021. by NTI

For those of you who are prone to a stock market gamble, it may be that the stable door has been bolted for a while and the horse is but a speck on the distant horizon. Following a galloping start to the year London’s leading share index has hit a post-pandemic high amid hopes that an economic rebound will lift corporate profits and boost returns for investors.

A few quid, even now, wouldn’t be the biggest gamble in the world and it certainly shouldn’t be an ill-judged, if poorly executed, ‘Panenka moment’, but investors should take stock that the FTSE broke through the 7,100 mark on Friday evening for the first time since February 2020.

Those in the know, including Billy’s mate Scooter’s Dad, reckon that the FTSE 250, the bulked up cousin of its puny relative, is a more accurate barometer of the health of corporate Britain, which is back home after spending time on a ventilator last year. This index advanced to a new record close of 22,775.28 on Friday 7 May, with a rise of 283.92 points, or 1.3 per cent, taking it up 1.2 per cent over the five days and 11.2 per cent so far this year. With bank interest starting with a point (.) and then proceeding with zeros before it adds a small number, even now a ‘hardly a gamble’ could represent a good return on an investment. 

With the services sector advancing at rates not seen since 2013 and sales of commodities boosted, alongside a rising oil price and industrial stocks enjoying a golden dawn, the news for investors is very perky. Over on Wall Street the news is even better. The Dow Jones industrial average rose by 0.5 per cent, or 159.33 points, to 34,707.86. Both the S&P and Nasdaq are adding points like they will otherwise go off in the early summer sun, and 770,000 jobs were added to the payroll in March. 

If your thing is copper you will already have spotted the opportunity and bought lots, recognising it’s value to a resurgent manufacturing globe. Copper prices hit a record high on Friday 7 May in the latest leg of a broad rally across commodity markets sparked by the reopening of major economies and booming demand for minerals needed for the green energy transition.

Copper is used from electric vehicles to washing machines, to Tracee’s friend Dakka’s nose-ring, and it rose last week by 1.4 per cent to $10,361 a tonne, surpassing its previous peak set in 2011 at the height of a previous commodities boom. However, an opportunity may yet arise for those of you who have missed the stock market boom, as a rather grumpy Ivan Glasenberg, chief executive of Glencore, said the price of copper needs to rise 50 per cent to encourage enough new supply to meet projected demand from the global green revolution. Plumbers could coin it in.

To be frank, we in the NTI newsroom wouldn’t have placed a bet on our old mate, Sanjeev Gupta, but he pulled a little something out of the bag this week, taking a £200 million loan from White Oak, a US-based private finance group which clearly know something no-one else knows. They would have caught wind of Mr Gupta’s Liberty Steel putting two French steel plants up for sale last week, but we bet none of them sent for a sales brochure.

That great British brand, Aston Martin, took a bet on a car that isn’t an ‘Aston Martin’, as such, but which could yet save the marque from being applied to Chinese tractors in the near future. The DBX, which looks more like a Toyota than an Aston, has attracted big interest from those who don’t know their Chanel from their Impulse, and higher selling prices helped the luxury carmaker beat sales expectations in the first quarter as it shrugged off the pandemic and the industry’s chip crisis.

Of course, the news at Aston Martin is still bleak, such is the way of things, but owner Lawrence Stroll will take any good news if laid out before him. Pre-tax losses narrowed from £110.1 million (a LOT) a year ago to £42.2 million (a LOT, but not as much), while revenues hit £224.4 million, better than the £196 million analysts had forecast.

We know that Neil was considering buying one in each colour, but has decided to stick to his 2005 Honda CRV, as there are fewer of those in the road.

Happy Sunday.

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