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Holly's Blog: 2019's global financial reality show

11 July, 2017

Shares have had a better time of it recently, picking up some of the dismal losses we saw at the end of last year. Yes, it’s reporting season as big brands start to announce how they did in the last months of 2018. I always think the stock market is like a global financial reality show, with the viewers voting for the stories and trends we like and think other consumers will follow. So who’s lighting up our commercial buzzers?

Tastebuds titivate

It seems as though not even Brexit, trade wars or low investor confidence can dampen our demand for tasty food and drinks. Ocado set tongues wagging on Monday about a possible tie-up with M&S. Ocado shares are up about 5% this week, as the City analysts get excited about the delivery of garlic-infused chorizo and Jerusalem artichokes to the Cotswolds in a 2 hour window. OK yah!

Fevertree – makers of posh tonic water – reported annual revenues were 40% higher as they become one of a rare group of UK businesses to have a successful bash at the US market. Their share price is up about 100% over the last 2 years, something which I feel I can no longer attribute to my personal G&T consumption.

And Diageo, the world's largest spirits company, beat half-year earnings forecasts. China and India seem to be embracing Johnny Walker and others, and its shares hit a new high yesterday.

Tech tantalises

Over to another addictive sector and the tech firms are still powering on. Both Microsoft and Facebook reported upbeat earnings this week. With over 1 billion of us clocking in daily to look at cat videos and our friends’ children in irritating angelic contrast to our own, Facebook made a profit of $25 billion last year. Yowzers.

Not every trendy brand is cruising though. Tesla had a tough year in 2018. Although they brought in over $7 billion in the last 3 months of the year, they lost $1.1 billion for the year overall. Marching onward, the group expects to deliver up to 400,000 cars in 2019. Shares have risen over the week and now cost about $305 a pop.

Finance flops

Financial firms are not having such a jolly time of it. St James's Place reported slower inflows, also feeling the pain of lower share prices around the world. As our portfolios fall, so does the pool of money they look after (and charge % fees on). They still added a net £10.3 billion to the coffers last year but their share price was down about 20% over the year. I can’t find much sympathy as I’ve long thought this group is shockingly poor on fee disclosure and transparency.

The big banks will report in February but the consensus view is that there won’t be much to cheer about. Mortgage applications were flat at the end of the year and even our love affair with credit cards has reportedly slowed.

Oil gets a clean up

Over in Oily Land, Royal Dutch Shell is riding high – up 4% this week after reporting – as profits surge given some chunky cost cutting. Reserves however are low – last year it sucked out 1.4 billion barrels, only adding 700 million in new reserves. The well is quite literally running dry. Nonetheless this share remains a perennial investor favourite for the moment, paying out a chunky 6% dividend.

And finally, power utility SSE said it had agreed to sell a 49.9% stake in its Stronelairg and Dunmaglass wind farms in Scotland to Greencoat UK Wind. The purchase was being made by Greencoat in partnership with a 'major UK pension fund'. I suspect we’ll start to see more news of our savings and investments being collectively used to support clean energy and forward-thinking firms which make a positive impact. I think this could transform our views of investments being something opaque, something being ‘done to us by others’ – into a positive thing we feel proud of, get behind and actually (dare I say it) find interesting!?

Over and out

So there you have it. Civilisation in 2019 summed up by our love of food and booze, an addiction to screens, falling stock markets and an exhausted planet!

Apologies if this is rough and ready - I wrote this with two bored children in the background (school closed), a bored puppy, plus an (evil) bored cat - hence the bird flying around the kitchen. I’d like to see a Wall Street analyst do that!

Time to go and get revenge in a snowball fight.