Markets Volatile In US And Asia As FTSE 100 Opens Slightly Higher

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“Markets were very volatile last night, with the S&P 500 index of leading US companies plunging by 3.2% and the tech-heavy Nasdaq index losing 4.3%. Weakness carried over to Asia with the Hong Kong market losing just over 2% whilst the Japanese market held up relatively well, limiting its losses to just 0.6%.

FTSE 100 Opens Slightly Higher

Nerves seem to have steadied this morning and the FTSE 100 has opened 0.6% higher, with a broad spread of sectors making progress, from Automotives to Specialist Financials. The largest loser amongst the top 350 UK companies was Renishaw group after a trading statement revealed some additional cost pressures, especially the need to boost pay higher in order to continue to attract and retain key staff roles. Even so Renishaw sees profits rising strongly this year, but no more than analysts were already predicting.

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Q1 2022 hedge fund letters, conferences and more

New flow from UK companies this morning is dominated by a trading update from Centrica PLC (LON:CNA), owner of British Gas. Centrica went to lengths to mention the additional costs and uncertainties they face in the current environment, but also revealed that earnings are set to be toward the higher end of recent analyst forecasts. Understandably, the group does not want to be seen to be profiting from the squeeze on consumers caused by surging energy prices. Centrica also revealed that some of its legacy gas handling assets may be repurposed in future to provide some of the infrastructure needed to introduce Hydrogen into the energy supply base at scale.

Philip Morris Is Looking To Diversify

In Europe, the tobacco industry was rocked by news that Philip Morris International Inc. (NYSE:PM), owner of the Marlboro brand outside of the USA is looking to diversify further away from traditional tobacco profits and is in talks to acquire Swedish Match, perhaps for as much as $15bn according to market reports after the companies revealed discussions were ongoing, but failed to disclose a price. Swedish Match have long focused on smokeless tobacco products ranging from Snus, a snuff-like product popular in Scandinavia to oral nicotine products far removed from traditional chewing tobacco. Swedish Match shares surged by 27% in early trading.

Heavy losses in the stock markets were not enough to dampen the bullish mood in the fine arts auction rooms. Last night in New York, Andy Warhol’s silkscreen print of Marilyn Monroe, Shot Sage Blue Marilyn sold for £158m, the highest value ever achieved by a 20th century artwork. To put that into context, the print sold for a sum greater than the market capitalisation of many well-known public companies, including Superdry, Metro Bank, Topps Tiles and Scottish TV.”

Article by Steve Clayton, HL Select Fund Manager

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