“Investors are getting set for another twist on the rollercoaster with Monday’s gains set to be largely erased after Snap Inc (NYSE:SNAP) interrupted the brief rally with a very downbeat snapshot. The FTSE 100 and FTSE 250 have opened 0.9% lower while in Japan the Nikkei slid by 1% and the Hang Seng in Hong Kong dropped by 2%.
Get The Full Series in PDF
Get the entire 10-part series on Charlie Munger in PDF. Save it to your desktop, read it on your tablet, or email to your colleagues.
Q1 2022 hedge fund letters, conferences and more
The Talas Turkey Value Fund returned 9.5% net for the first quarter on a concentrated portfolio in which 93% of its capital is invested in 14 holdings. The MSCI Turkey Index returned 13.1% for the first quarter, while the MSCI All-Country ex-USA was down 5.4%. Background of the Talas Turkey Value Fund Since its inception Read More
The owner of Snapchat notched up fresh worries after the bell on Wall Street by lowering its revenue and profits forecasts for June and blaming the rapidly weakening economic environment. That sent the stock into a tailspin, falling more than 30% in after-hours trading, pulling down other battered tech stocks with it, with Meta falling 7% and Pinterest by 11%. Worries are mounting that advertising will be a big casualty as companies try and deal with squeezed budgets as input costs rise dramatically and the concern is that campaigns and budgets will be scaled back. With the era of cheap money hurtling to an end the focus will be on a speech from Jerome Powell, the chair of the Federal Reserve later, with investors keen to glean any new titbit of information about just how far and fast the US central bank will go in raising rates and offloading its mass bond holdings.
In the UK, the cost-of-living crisis is still taking centre stage with clamour ratcheting up for support for the poorest households, as the Bank of England prepares borrowers to expect more interest rate rises as it attempts to keep a lid on rampant inflation. Chancellor Rishi Sunak, the finance minister, has been given more wriggle room to take action with public borrowing coming in lower than expected at £18.6 billion in April. Tax receipts piled up higher than forecast partly due to the increase in National Insurance contributions during the month, which added to the household budget squeeze. However, the Treasury will be concerned that this may be a short term gain and there could be long term pain coming as the economy contracts, so ministers are unlikely to start splashing the cash, instead the purse strings are likely to loosen for small targeted support schemes. The pound has pushed up higher against the dollar, up to $1.259, with sterling continuing to recover from the multi-year low it hit a fortnight ago as expectation mounts about a steeper path of interest rates.
As concerns mount over the fragility of the economies around the world, the oil price has slipped back, pulled down by ongoing worries about how detrimental China’s zero-covid policy will continue to be in terms of demand. But supplies are tight and that’s still keeping the price of a barrel of Brent crude elevated at around $112. A Russian oil embargo is still being pushed forward by EU nations and the head of Saudi Aramco has cautioned that a major supply crunch could be looming. The wariness among energy firms about investing in fossil fuels as pressure mounts for the transition to greener energy appears to be acting as a cap on money flowing into production, and will be a lingering inflationary pressure which consumers, companies and policymakers will keep having to grapple with."
Article by Susannah Streeter, senior investment and markets analyst, Hargreaves Lansdown
Over1.7 million clients trust us with £132.2 billion (as at 30 April 2022), making us the UK’s number one platform for private investors. More than 98% of client activity is done through our digital channels and over 600,000 access our mobile app each month.
Subscribe to ValueWalk Newsletter. We respect your privacy.
ValueWalk.com is a highly regarded, non-partisan site – the website provides unique coverage on hedge funds, large asset managers, and value investing. ValueWalk also contains archives of famous investors, and features many investor resource pages.
Mission: Providing a framework to improve your investing PROCESS, while collecting newsworthy information about trends in business, politics and tech areas.
Please speak to a licensed financial professional before making any investment decisions.
Subscribe to ValueWalk Newsletter. We respect your privacy.