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Morning Update

Looking at how the markets have performed over the first quarter: In Europe and the US we’ve seen a very strong start to 2024.

Travel Tuesday: Kuwait

Ruled by the Al-Sabah dynasty since the 18th century. The threat of Ottoman invasion in 1899 prompted Amir Mubarak Al-Sabah to seek protection from Britain. This  defense arrangement continued until 1961 when the country attained independence.

GDP $175 billion

Population ~18.4 million

Top 3 Exports Oil, Phosphate, Gold

Land Boarders 2,684km

Coastline 531km

Famous Finish-line The Paris-Dakar Rally

Looking at how the markets have performed over the first quarter: In Europe and the US we’ve seen a very strong start to 2024, with major markets up between 9-11% in the first three months. Conversely, UK markets have performed terribly, with the FTSE100 up just three percent and the FTSE250 less than two percent.

In single stock terms, it’s hard to beat Nvidia’s 88% rise since 1 January, which was on top of 2023’s 235% increase in value – amazingly this current valuation is a 76x multiple of their earnings (P/E ratio) if you compare that to other tech heavyweights such as Microsoft and Apple, who trade at a 38x and 27x multiple, respectively, some might say that’s over-valued!

In terms of P/E ratio though, the current hands down winner is newly listed Truth Social…

Trump’s social media platform was acquired by a SPAC last week and therefore became publicly traded. At its peak last week, it had an $11bn valuation on annual revenues of $4 million – which is a 2,750x valuation!  The share price has since fallen by around 20% and is going to be on a rollercoaster for the next few weeks and months – probably until the point that Trump’s lock up period ends and he’s able to sell shares.

In the commodity space, the hands down winner is Cocoa, up from $4,000 per ton at the start of the year to more than $10,000 per ton last week. We’ve covered this move in a great amount of detail in last month’s WTFX, which is here if you’d like to get into why this is happening and what it means for global food manufacturers WTFX: Issue 11 – HCFX.

BRC Inflation Index

This morning the British Retail Consortium’s Shop Price Inflation level eased to its lowest level since December 2021 as it dropped to 1.3% over March. This marked a drop of 1.2 percentage points from February’s print of 2.5% and is indicative of a number of inflationary pressures easing.

Regarding groceries, the food price inflation rate fell to 3.7% in March, down from 5% in February. This represented the tenth consecutive fall as the index decelerated to its lowest level since April 2022. Amongst some of the most significant contributors was dairy prices which decreased from the month of February as farmgate prices fell.

Increased competition in supermarkets was cited as another reason for falling prices. For example, the Head of Retailer and Business Insight at NielsenIQ said that “intense competition amongst the supermarkets as they look to drive footfall, with focussed price cuts and promotional offers earlier in the month for Mother’s Day and now again in the weeks leading up to Easter.”

Tensions Rise Between Israel and Iran

Tensions between Israel and Iran have again highted following an explosion in Syria which Tehran said killed seven officers on Monday. Iranian officials have said that their consulate building in Damascus was damaged when the building next door was hit by an air strike.

Tehran also say that a senior commander of the elite Quds Force was amongst the dead. Brig-Gen Mohammad Reza Zahedi was a senior figure in Tehran having commanded Iranian forces in Lebanon and Syria between 2008 and 2016.

Since the aftermath of the 7 October attacks, Israel have increased the number of strikes in Syria as they target Iranian backed groups in the country but analysts are now considering the implications of the latest developments as concerns grow over the prospect of escalation in the Middle East.

Israel have not commented on the developments.

 

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