While equity markets have fallen in relative unison internationally since October, some have suffered more than others. Among the UK markets, the heaviest faller has been the AIM, the Alternative Investment Market that is home to ‘microcap’ stocks. These companies have an average market capitalisation of ‘just’ around £100 million.
In late January a run on tech stocks pulled equity markets down after several months of uninterrupted gains. The same thing happened in March. Both times big tech, led by the FAANGs bounced back and went on to new highs. But October saw a more gruesome tech bloodbath with $200 billion wiped off the value of Apple, Amazon, Alphabet and Microsoft, the world’s 4 most valuable technology companies.
GlaxoSmithKline’s (GSK) share price took a dent yesterday, falling 7% on confirmation that rumours of a $5 billion+ cash buy-out of cancer-focused biotech company Tesaro were true. The huge acquisition, reported to be $5.1 billion all cash, represents the pharma giant’s first major deal under the stewardship of new CEO Emma Walmsley, who took over from Sir Andrew Witty following his retirement in March of last year.
Bitcoin started the year with a trading value of around $20,000. A little over 11 months later and the original cryptocurrency has lost over 75% of its value. A single bitcoin unit was trading at around $3700 on Tuesday, November 27th. The drop has not only effected bitcoin but taken the whole cryptocurrency market along with it.
Global equity markets have shed 10% over the past few weeks and the big tech luminaries that comprise the FAANGs (Facebook, Apple, Amazon, Netflix and Google [Alphabet]) far more than that. It’s the second time this year after a similar correction in February and barring a strong last minute Santa Rally surge, something that currently looks doubtful, stocks appear unlikely to close out 2018 higher than where they started the year. If equity markets manage to get close to break-even that would, at this stage, be warmly welcomed by most of those investing online.
A recent article in the Financial Times doesn’t at first look like it has anything to do with data. It’s about a new ‘ethical’ watch brand, Baume, spun off from Swiss watchmaker Baume & Mercier, owned by in turn by Swiss luxury goods conglomerate Richemont. The new brand is features vegan straps in place of the traditional leather, is constructed from the minimum number of parts possible, meaning that the watches can be disassembled for reuse and has a socially and environmental supply and production chain.
eBay, the online marketplace whose addictive auction system made it the pioneer of the ecommerce model that is now such an existential threat to the huge bricks and moral retail sector, is in danger of becoming irrelevant. That appraisal may seem overblown in the context of eBay’s share price reaching historical highs as recently as February this year. In early 2009 eBay’s share price sat at around $5 and early this year had broken into the upper reaches of $44.
Lloyds Banking Group’s share price climbed higher at the end of last month as the bank’s third quarter profits came in ahead of expectations. Statutory profit before tax for the period came in at £1.8 billion when the analyst consensus had been for £1.7 billion. However, while Lloyds’ share price saw a gain from its October 19th year-to-date low of 56.13 pence, up to 59.49 pence early this month, it is still significantly down from its January high of 71.26 pence. That’s a headache for all those investing online in the bank’s shares through ISAs and SIPPs.
Record quarterly earnings results published yesterday don’t look like they will prove to be sufficient to maintain the company’s valuation above the $1 trillion level when markets open on Wall Street today. The average iPhone sales price of $793 was far ahead of analyst estimates for $751. The strong margins generated by the newest iPhone models, starting at around $1000 and rising to as much as $1449 with extras such as additional memory led to fourth quarter revenue rising to $62.9 billion and profit to $14.1 billion. Over the same quarter last year those figures stood at $52.6 billion and $10.7 billion respectively.
Earning season is in full swing and over the course of the past week and end of the previous, many of the big tech companies have presented their quarterly figures to markets. There’s a couple of the big boys still to go, notably Apple on November 1st and Facebook next Tuesday, October 30th.
