After much hype and frenzy, an eye-watering amount of money, great fanfare and ticker tape, the self-proclaimed largest event in the history of the world, led by a larger-than-life character, has finally taken off. We will see what great heights it reaches to in the coming weeks.
Of course I mean the FIFA World Cup/SpaceX IPO*
*Delete as appropriate.
Can I suggest you strap yourselves in because it’s going to be a long and emotional journey whichever of these you choose to follow closely.
If it weren’t for the fact that I don’t really know if we are at the start of significant negotiations between the US and Iran over at least the reopening of the Strait of Hormuz, I might well have comfortably slotted that into the above commentary. Added to that we are less than a week away from the Makerfield By-Election and all that that might bring with it!
This all boils down to my way of saying it’s been a heck of a week! Markets, rather predictably, have followed in kind with what looked as though was going to be a performance more akin to South Africa in the opening match [Ed – two red cards for those of you that don’t follow football] but instead put in a good second half performance.
Amazingly it was the UK that came out on top up 1.3% on the week despite news that the UK’s economy shrank slightly in April as the Iran war began to have an impact on businesses, official data has indicated.
The economy contracted by 0.1% in the month, the Office for National Statistics (ONS) said, with some firms citing the conflict in the Middle East as having raised costs and affected turnover. April’s contraction was the first monthly fall since August last year but had been forecast by economists after stronger than expected growth in March.
Post Match Analysis
To bring some sense to everything I’ve dribbled on about there are our usual squad of commentators and experts making up one of the most formidable teams this side of draw.
And to kick us off is the ever-present Lothar Mentel and colleagues at Tatton Investment Management with the Tatton Weekly, with the following line up!
- Stall, correction and rebound – Even the seesaw of the Iran war negotiations could not steal the limelight from market history’s largest ever IPO. The mixed conditions it met in the run-up were likely of its own making.
- Tariff trouble again – After his Liberation Day Tariff’s withered, Trump’s second attempt stands on a firmer legal footing — but it’s clear the aim is now simply raising revenue through an indirect tax on US consumers.
- Super El Niño threatens food security – The climate phenomenon doesn’t just make weather forecasting harder, it also has the potential to further disrupt supply chains.
In their latest Weekly Digest, the friendly opposition, Head of Market Analysis at Rathbones, John Wyn-Evans explains why recent market weakness doesn’t yet make the case for cutting stock market exposure. Cooler sentiment, geopolitical tensions, and signs of speculation in AI-related markets have unsettled investors. Even so, periods like this can also create opportunities, while last week’s market moves highlighted the value of staying diversified.
The half-time break of the Canaccord Coffee Podcast, this week brings Jane Parry, Chief Marketing Officer, and Richard Champion, Co-Chief Investment Officer, discussing:
- Why strong economic data can sometimes push markets lower, (which is something that always bemuses us in the office too)
- How AI spending and broader stimulus are heating up the US economy
- Why inflation and interest rate expectations are back in focus
- What a ‘healthy pause’ really looks like after a strong rally.
Encouraging Charts of the Week
As expectations that Iran negotiations will come to fruition oil prices have dropped slightly. Brent crude oil is trading around $88 a barrel (£65), meaning prices are still more than 20 per cent higher than they were before the war broke out.
Susannah Streeter, chief investment strategist at Wealth Club said “Even if warring nations sign on the dotted line, the Strait of Hormuz still risks becoming a future flash point.
“Given the damage wreaked on facilities it’s going to take months, if not years for energy supplies in the region to return to pre-conflict flows.”
On Thursday (June 11) the European Central Bank was the first of the major central banks to raise interest rates since the start of the Iran war earlier this year. It raised rates by 25 basis points to 2.25 per cent, the first time it has lifted rates since 2023.
Richard Carter, head of fixed interest research at Quilter Cheviot: “This move had long been priced in by markets, with policymakers’ recent hawkish rhetoric leaving little doubt about the direction of travel.
A Sticky Situation
World Cup fever is sweeping the 7IM office. Sweepstakes, wall charts, the rivalry between their London and Edinburgh offices … it’s all kicking off (literally) this week.
But. What has REALLY got the Investment team going, is this year’s Panini sticker album:
Hunting for rare opportunities, the trading with other teams (or children), plus the nostalgia factor for a team whodefinitely spent their youth sticking, rather than kicking.
And while the thrill of the chase is real, we couldn’t resist doing a bit of analysis either …
The 2026 Panini FIFA World Cup sticker album is the biggest in history. The album includes a massive 980 stickers, representing the 48 teams that will be playing over the coming six weeks.
Now, how much might it cost you to complete the sticker book? In an ideal world, you’d buy 140 packs, with 7 stickers to a pack, and with absolutely NO duplicates – it would cost £175.
But there’s a reason that Panini doubles its annual sales in a World Cup year (it reckons it will make $1.5 billion from sales this summer alone. On stickers!!)
The numbers are in Panini’s favour:
Source: 7IM
After buying 100 packs (700 stickers), you’re around 50% complete. But now it gets harder.
It’s not bad luck – it’s just maths; The Law of Diminishing Returns:
Stage 1. Early packs deliver rapid progress – almost every sticker is new.
Stage 2. Each new pack has a few stickers you’ve already got. You start recognising familiar faces (Jeremy Doku and Declan Rice in our case!).
Stage 3. You should stop buying packs once you’re around 90% complete (around 300 packs, so £375 spent). If you need 50 stickers to complete the book, you’d have to buy 600 PACKS of stickers. Time to start swapping*!
Is there an investment analogy here? Of course!
Lots of investors think that continually adding stocks or funds to their portfolios increases diversification. But there’s a sweet spot, like sticker collecting. For a given allocation (say, UK Equity), once you’ve got 4 funds, adding any more doesn’t help. Risk doesn’t reduce, and returns don’t increase.
Changing the portfolio requires swapping, not buying (although less frequently than with stickers!).
*If you [Ed – or your children/grandchildren] want to do any trading, do let us know, and we’re happy to liaise with 7IM about a Swapfest before the Final.
Miscellaneous
The aggregate surplus of defined benefit (DB) pension schemes in the UK increased by £5.3bn in May, reversing the reduction in surplus the previous month, the latest figures from the Pension Protection Fund (PPF) have shown, So….
….The Pensions Regulator (TPR) will consult on supporting guidance for trustees on defined benefit (DB) pension scheme surplus release later this year, TPR director of trusteeship, administration and DB supervision, David Walmsley, has confirmed. Speaking at the Pensions Age Northern Conference, he highlighted the government’s recent announcement of a consultation on draft regulations that would allow trustees of well-funded DB pension schemes to release surplus funds to sponsoring employers.
Helium is a commodity that is key to every major growth theme in the global economy – space, AI, and healthcare. But almost nobody talks about it – and the helium supply picture has just become dramatically more complicated reports MoneyWeek. The launch of a single Falcon 9 rocket consumes roughly 14%-18% of the world’s daily helium production in a single ignition sequence. SpaceX launches Falcon 9 rockets dozens of times a year, with ambitions that stretch well beyond that frequency. So surely someone is producing more of it? They are not, at least not at anything close to the rate the market requires. Helium is not manufactured. It is extracted as a by-product of natural-gas processing in a small number of locations where underground concentrations happen to be commercially viable. The US and Qatar together account for more than 75% of global supply. Interesting or just hot air??
There has already been a good result today [Ed – I know it’s confusing, but he means Saturday] for Scotland in the World Cup. It was in the Women’s T20, but congratulations to them and we’ll see if the men’s football team can emulate them later. Good luck! And later this coming week to both England teams in their matches in the relevant competitions.
I’m off now to watch my youngest in her ballet show. Having had to encourage her by running alongside at the cross-country race earlier this week, I am hoping, for everyone’s sake, she can manage this without my help!
I hope to catch up with you next time.