TEAM Asset Management’s global weekly market review for week commencing 4th September. TEAM Asset Management is a Jersey-based independent asset management company of AIM-listed parent, TEAM plc (LON:TEAM).
Reports that authorities in China have ordered government officials and state employees to stop using Apple products at work weighed down broader market indices last week. Apple, the largest constituent of the blue-chip S&P 500 and technology focussed Nasdaq indices, saw its market valuation shrink by nearly $200 billion as its shares fell 6% on the news.
Whilst the curbs are also said to extend to other foreign-branded devices, they will have the biggest impact on Apple. China is its third-largest market, accounting for 18% of its revenue last year and around 50 million in annual iPhone sales.
The timing of the report also comes just before this week’s release of the new iPhone 15 range and the restrictions could knock Apple off track from passing Samsung to become the world’s largest smartphone seller.
Huawei, which has faced tougher scrutiny and restrictions in the West, will be a big beneficiary of the curbs. The Chinese technology manufacturer released its latest 5G smartphone last week, the Mate 60 Pro, powered by an advanced silicon chip made in China by Semicondutor Manufacturing International Corp. SMIC has also been subject to restrictions after US officials voiced concerns that exports of US chip technology to it could be diverted for military use.
Manchester United has been making a lot of headlines on and off the pitch in the new football season and its New York listed shares suffered their worst ever one-day fall on Tuesday after a newspaper reported that the Glazer family will take the club off the market. Shares declined more than 18%, wiping $700 million off the football club’s market valuation.
Sheikh Jassim Bin Hamad J.J. Al Thani, a member of Qatar’s royal family, and British chemicals billionaire Sir Jim Ratcliffe have made offers but the newspaper report suggested that their bids are a long way short of the £10 billion asking price. By way of comparison, Chelsea was sold last year for £4.25 billion to a consortium led by Todd Boehly.
There were some winners during the week, including Tesla whose shares jumped 10% on Monday following an upgrade by Morgan Stanley. Analysts at the investment bank raised their price target from $250 to $400, reflecting their view that Tesla’s Dojo supercomputer can unlock substantial revenue streams in the future.
Dojo is being developed to train artificial intelligence (AI) models for self-driving cars but the analysts expect it will also be used for vision-based AI technology beyond the auto industry in sectors such as robotics, healthcare and security.
In economic news the Office for National Statistics revealed that wages in the UK grew 7.8% from a year earlier in the three months through July, matching the fastest pace since records began in 2001. Wages are now rising at a faster rate than inflation which should put pressure on the Bank of England to raise interest rates further.
Money market futures are pricing in another 0.25% rate hike when the BoE’s Monetary Policy Committee meet next week, taking the benchmark interest rate to 5.5%.
Brent crude rose by $2 to $91 a barrel after Saudi Arabia and Russia confirmed that they will extend their voluntary supply cuts of a combined 1.3 million barrels per day until the end of this year. Oil prices have rallied more than 25% since mid-June and Brent is trading back above $90 for the first time in ten months, making the tasks of central banks to bring down inflation more difficult. There was also more volatility in European gas prices which jumped sharply higher on Friday after workers at LNG facilities operated in Western Australia began strike action. The strikes at the Gorgon and Wheatstone facilities, which account for around 7% of global LNG supply, will include work stoppages and bans on overtime but the Offshore Alliance, a group representing two labour unions, warned a full two-week strike will start on Thursday if no agreement with Chevron is reached.
Author: Andrew Gillham, TEAM Asset Management, Senior Investment Manager, ([email protected])
