In our weekend digest, we summarize the best pieces published from the working week. These can be read in full by clicking on the link over the name/ticker.
Stocks – Trying To Find Gems In The Volatility
Our trade of the week is going long SSE (LSE:SSE) shares at 1,925p. This comes ahead of the full-year results that are due for release on Wednesday. The share price has performed well over the last 12 months, up 24%. This has in part been down to a strong push towards clean energy, with an investment pot of £12.5bn to help in this regard. It’s become somewhat of an ESG poster child, and one that we feel will see more and more pile into in the coming year.
Bill Ackman, the CEO and founder of Pershing Square Capital Management (LSE:PSH), said markets are facing a precarious environment because the Federal Reserve has lost credibility in its attempt to combat inflation.
The CEO tweeted on Tuesday that “inflation is out of control”. He followed on by saying, “Inflation expectations are getting out of control. Markets are imploding because investors are not confident that the Federal Reserve will stop inflation. If the Fed doesn’t do its job, the market will do the Fed’s job, and that is what is happening now. The only way to stop today’s raging inflation is with aggressive monetary tightening or with a collapse in the economy.”
The global food chain disruption has continued this week. With sanctions on major grain providers like Russia, food and ingredient stocks are heating up. RiceBran Technologies (NASDAQ:RIBT) has caught our eye after a significant move since the start of the year. Over the last two months, RIBT stock has jumped from under $0.30 to $0.77.
Over the past few weeks, retail interest has soared in Woodbois (LSE:WBI) shares. The Woodbois share price was trading at an average level around 4.5p for much of the past year. However, within the space of April, the price doubled to 9p. The move completely retraced in the space of a couple of weeks, but has started to show signs of being bid up again. So where is the next stop for the stock?
Crypto – struggling to find a bottom
From our point of view, the play-to-earn mechanics of STEPN should allow the coins to hold value in a better way than alternatives. GST needs to be burned by users on a daily basis to maintain the level of their sneakers. Producing other sneakers (known as minting) also burns GST, which is a main way of a player progressing through the game. This supply contestants should help prevent inflation, or simply supply outstripping demand.
FX – Taking Advantage Of Short Term USD Weakness
In terms of fundamental drivers, we’ve seen some better UK data over the past week that’s help to bring the pair off the lows. For example, the unemployment rate fell to 3.7%, the lowest level in 40 years. A strong tight labour market is one element that could help to prevent GDP falling into negative territory come the end of the year. Aside from this, we’ve also seen a slight pullback in US yields, as investors become slightly more cautious about the aggressive pricing in the short term rates space.
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