NEWS, VIEWS & TRUTHS (30TH APR – 4TH MAY)

Published on: May 4, 2018

It’s Friday, May the 4th be with you. Welcome to News, Views and Truths.

This week began with a bang. That particular bang being the announcement that J Sainsbury’s have tabled an accepted bid, worth £7.3bn, to buy rival supermarket group Asda from the US parent Wall-Mart.

This was heralded by Mike Coupe, CEO of J Sainsbury’s singing “We’re in the money”, ahead of a live TV interview, unbeknownst to himself. This is quality TV.

Investors appeared to agree as Sainsbury’s shares rocketed some 20% during the day, although almost as soon as the announcement was made, questions began to be asked on the effect the takeover would have on jobs, competition and suppliers. MPs have, as a result, written to the competition regulator asking for more information into the proposed deal. The combination of Sainsbury’s with Asda would create a huge retailer with combined revenues of about £51bn and a network of 2,800 stores covering 31.4% of the British grocery market. Tesco has 27.6%.

Another story that piqued my interest this week was the news that the Bank of England’s chief economist, Andy Haldane, has suggested that people’s Spotify downloads may be a useful tool to understand their mood and behaviours.

Among the data metrics singled out by Haldane to better understand and measure human behaviours, were the kinds of books, music and TV shows people enjoy. “To give one recent example, data on music downloads from Spotify has been used, in tandem with semantic search techniques applied to the words of songs, to provide an indicator of people’s sentiment,” he said.

According to Haldane, the results from the Spotify study did at least as well in tracking consumer spending as the Michigan survey of consumer confidence in the US.

So do we have cause to be happy? Should our playlists be more sunshine or cloudy day?

Well, the markets have had another positive week, albeit with some outliers. The FTSE 100 was broadly flat, closing last night up 0.05% – at the time of writing it is up 0.45% for the day so keep it up boys! The US S&P 500 is up 0.36%, Europe up 1.1% and Japan going gangbusters at 1.93%. The only significant detractor are the Emerging Markets, down 0.88% for the week on continued macroeconomic uncertainty from the White House’s programme of US protectionism. My personal note on this is that Global Emerging Markets (GEM) will continue to be affected by such “top down” pressures; make sure your exposure to this most important of sectors has a “bottom up” stock-picking focus. Naturally I am always available to discuss this if desired.

To finish and knowing that the BoE will be watching, have some bank holiday positivity in this week’s playlist. May your charcoal light first time and may the rain stay away.

See you next week.


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