Market Wrap

Market Wrap: Vodafone makes important call, FTSE ignores scaremongers

Andrew Saks, Friday, 18 June 2021

Estimated reading time: 6 minutes

ETX Capital Market Wrap

The not-so-dormant inflation debate

A few weeks ago, some economists predicted that the British and American economies would suffer from inflation. However, the weeks rolled by and the slumbering giant awoke, revealing figures that reflected a change in consumer spending – figures that the Office for National Statistics said were distorted by 'base effects' due to the 2020 lockdowns.

It can be glossed over, but it's becoming clear that someone is going to have to pay for the new massive hole in the economy. As per the Consumer Price Index, inflation indicates that supermarket prices have increased on average. For example, a rate of 2.1% means items previously priced at £1.00 will have risen to a fraction over £1.02.

Two pence. The echo can be heard from here. No, it is not a lot of money, but it is enough to cause investor caution and squeeze the coffers of big business.

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Girl Power – GSK stock goes up as Emma Walmsley pulls $625m rabbit out of her hat

Last month, activist investor Elliot Management set its sights on ousting GlaxoSmithKline CEO Emma Walmsley. This was an attempt to reshuffle the boardroom from outside, a well-rehearsed activity by hedge funds that gain controlling stakes in large publicly listed companies.

Emma Walmsley bode her time until this week, announcing GlaxoSmithKline would buy Canadian cancer treatment company iTeos Therapeutics for $625 million. As a result, GlaxoSmithKline's share price rocketed by 28 points on Tuesday.

It unfortunately looks like this is just one of six female FTSE 100 CEOs who will stay.


For those of you who didn't catch the G7 coverage, prominent leaders have been delivered a strong message from the industrious Asia Pacific region.

China said that the world should not be controlled by ‘small countries', referring to the United States, UK, France and other developed Western economies.

This may sound churlish, but they are small in comparison with China, whose message was very clear: policy, economic structure, and the way that the world's markets are governed and operated are no longer in the hands of these Western economies.

In Britain alone, £134 billion in infrastructure investments and publicly listed stock is held by Chinese entities at the top level. This is something that has happened quickly.

The conversation between the G7 leaders suddenly shifted to studying the cold, hard figures. China wants to keep its own stocks and shares inside its own borders, but the London Stock Exchange's listings are now on the agenda of Chinese investors.

A clever piece of PR by the economic powerhouse of the East. Who knows where this may lead stock prices in the future.

Mark your calendars

On Monday June 21, the UK's house price index will be unveiled by property website – with an expected 1.8% increase in May over the April figures. At 3.15pm GMT, ECB President Christine Lagarde is scheduled to make a speech.

Tuesday will see Finland reveal its unemployment figures, expectedly steady at 7.6% as it has been one of the most stable Eurozone nations. At 4.42pm GMT, Portugal will follow up with its figures – an announcement to take note of, given the disparity between their debt and massive development. Then at 3pm GMT, we expect to get confirmation that the Euro confidence index has gone down tremendously since January, from -3.1 to -5.1.

At midnight on Wednesday, Australian manufacturing PMI will be revealed, expected to be around 60.4. Also in Australia, RBA Assistant Governor Ellis is set to speak. US Current account figures are up slightly, but still in negative at an estimated 188.5 billion dollars, though this will be announced at 1.30pm GMT.

On Thursday at 8am GMT, we'll learn the Spanish GDP figures for Q1 – estimated to be 4.3% instead of the 9.1% decline in Q1 of 2020. Sweden is doing well, with PPI figures for May at 5.6%, which will be confirmed at 8.30am GMT. In the US, the Goods Trade Balance for May is due to be announced at 1.30pm GMT – a negative figure of 85.73 billion is expected.

Friday will set the stage for Germany's consumer climate, to be announced at 7am GMT. It's expected that July will show decreasing figures, with estimates showing -7 compared to last month's prediction of -4.3. At 9am GMT, the Euro M3 Money Supply for May 2021 will be announced. It's expected to be larger this year at 9.2% when compared to 8.5% in May 2020.


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