TEAM Asset Management’s global weekly market review for week commencing 20th November. TEAM Asset Management is a Jersey-based independent asset management company of AIM-listed parent, TEAM plc (LON:TEAM).
Global stocks struggled for direction in a Thanksgiving holiday shortened week for the US exchanges. The blue-chip S&P 500 edged 0.1% higher whilst the technology focused Nasdaq slipped 0.3%.
The most eagerly awaited event before markets closed for the holiday was Nvidia’s release of its quarterly earnings report on Tuesday evening. Amidst the hype that has propelled the chipmaker’s shares 230% higher this year, it had a lot to live up to which was ultimately reflected in the muted reaction to another blockbuster report.
Nvidia reported record revenues of $18.1 billion for the three months to the end of October, a 206% increase on the same period a year ago, and 34% higher than the previous quarter. Although it warned of a significant fall in sales to China due to export restrictions on its high-performance AI chips, the company stressed that it expects the declines to be offset strong growth in other regions and the rise of generative artificial intelligence will underpin long-term demand for its graphics processing units.
Despite beating analysts’ forecasts, Nvidia shares have fallen more than 4% from its record high of $504 set last Monday.
In the UK, EasyJet also reported impressive results on the back of strong demand for travel and a record summer. The budget airline revealed revenues rose 42% to £8 billion in the 12 months to the end of September, enabling it to generate a profit of £455 million compared to a £178 million loss last year.
The turnaround in performance will also allow it to pay a dividend for the first time since March 2020. In addition to record demand for seats, the airline has also seen strong growth in its holiday offerings (+221%) and ancillary revenue, including baggage fees, seat bookings and onboard food and drink sales. Ancillary revenue per seat rose to £23.47, up from £19.43 in 2022.
CEO Johan Lundgren noted that the conflict in Gaza will have some impact on winter sales, flights to Israel and Jordan have been suspended, but elsewhere the outlook is positive. He pointed to UK consumer research where three-quarters of respondents said they plan to spend more on holidays and travel next year.
Virgin Money, however, didn’t have a good week as its share fell 7% on Thursday after it reported profits of £345 million for the year to 30 September, down from £595 million a year earlier. The challenger bank was hit by larger provisions for credit card arrears where higher interest rates and inflation have made making repayments much more difficult for many customers. The £309 million impairment charge is nearly six times higher than a year ago.
The higher cost of living, however, didn’t deter US consumers from spending a record $5.6 billion online on Thanksgiving Day and another record $9.8 billion on Black Friday according to data provider Adobe Analytics.
Traditional bricks and mortar stores also reported brisk trade where big discounts on products pulled in the crowds. Consumers typically wait until Black Friday to take advantage of discounted prices on electronic goods such as televisions, household appliances, smartwatches and gaming products.
Gold has continued to climb, reaching a six-month high of $2,015 per troy ounce, on Monday. Although the risk of the Hamas-Israel conflict escalating into the wider region has eased, the safe-haven precious metal has benefitted from expectations that the Federal Reserve is finished raising interest rates and the weaker US dollar. Gold doesn’t generate income and can struggle when cash pays relatively high rates of interest.
Brent crude fell back below $80 a barrel after Opec+ pushed back its planned meeting on Sunday to Thursday. The postponement suggests that there is some disagreement amongst members of the cartel over further supply cuts to support oil prices. Saudi Arabia is expected to extend it voluntary cuts into the first quarter of next year and there is speculation the cartel is weighing up a further production cut of up to 1 million barrels a day.
TEAM plc (LON:TEAM) is building a new wealth, asset management and complementary financial services group. With a focus on the UK, Crown Dependencies and International Finance Centres, the strategy is to build local businesses of scale around TEAM’s core skill of providing investment management services. Growth will be achieved via targeted and opportunistic acquisitions, through team and individual hires, through collaboration with suitable partners, and organic growth and expansion.
