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Markets static ahead of Powell testimony

by LLB Reporter
7th Mar 23 9:58 am

Investors are waiting with bated breath for Federal Reserve chair Jay Powell to appear before the Senate Banking Committee today, eager for any new thoughts on the central bank’s monetary policy and how it will tame inflation.

Russ Mould, investment director at AJ Bell, said: “Many people believe the Fed will continue to lift rates as the US economy is so far proving to be more resilient than expected under the circumstances. The next rate decision comes on 22 March and the big unknown is whether the Fed will go for a 25 or 50 basis-point hike. The latter would show the central bank is prepared to keep fighting aggressively and may trigger some investors to reconsider their appetite for risk.

“Mr Kipling cakes maker Premier Foods continues to have an exceedingly good time with trading. The company has shown recent success wasn’t simply down to people being stuck indoors during the pandemic and feasting on sweet treats. Instead, the company is enjoying the benefits of sorting out of its debt problems and being able to reinvest spare cash back into the business to make it more competitive and innovative.

“The same joy cannot be shared with logistics group Wincanton after it lost a contract with HMRC. Making matters worse is a gloomy trading environment, triggering one almighty profit warning from the company. The timing is bad given that a lot of companies have been talking about supply chain problems easing, which indicated a company like Wincanton should find life easier to get goods from A to B.

“In The Style becomes the latest flop IPO in the UK, with the operating business set to be sold for a mere £1.2 million and the shares to delist from AIM. Trading has been awful and its finances as robust as a soggy Weetabix. The fashion retailer floated on the UK stock market almost two years ago to the day, valued at £105 million. It didn’t take long for the problems to appear and the departure of the chief executive at the end of 2022 effectively marked the captain jumping off board before the whole ship sank.”

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