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@Poker
US inflation risks becoming out of control. Aggressive raising of rates sensible to combat inflation. Rates will be rising quicker as I thought. Great to be in cash at the moment.
@Poker they will do it anyway as the effect of lowering inflation is delayed by quite some time, they have to be careful because later we could then be dealing with deflation next year, i would say oil price is a good indicator that it is working, Brent crude is under $100 now as is standard oil, commodities react first so its heading in the right direction, its not far off the price before 24th Feb now. Diesel was 146p a litre back then its currently at 196p, someone is making hay while the sunshines...
US retail sales data for June , due out on Friday.
"Barclays economists led by Pooja Sriram said their internal credit-card numbers suggest that retail sales may have dropped 0.4% last month, which would be a second straight decline. (Adjusting for inflation, spending actually dropped 0.4% MoM in May...)
The Barclays model shows that credit-card spending at gas stations surged, while there was a decline in outlays on cars, health care and general merchandise. "
https://www.bloomberg.com/news/articles/2022-07-11/barclays-bofa-say-card-data-point-to-weak-us-consumer-in-june
* 244k Americans filing for unemployment benefits for the first time last week. That is the highest since November 2021
* Oil,copper,Iron ore and other commodities falling in price as recession fears grow
* Amazon Prime Day poll suggests that 58% of orders were placed for items under $20
Are the FED trying to do too much, too late with a possible 1% rise at the end of the month ?
American inflation rising higher than the market expected. This leads to a higher probability of higher and faster interest rate rises by the Fed in the US. Investors are currently further selling off high risk stocks as the worldwide macroeconomic environment further deteriorates..
Could be rounds of talks etc. Personally I see continuation and escalation being the running themes of the Ukraine- Russia war for the foreseeable...
sorry wrong link ... they usedthis 1 million before !!
https://news.sky.com/story/ukraine-news-live-army-of-one-million-ukrainians-being-established-for-new-counter-attack-in-south-12541713
Putin - well, he seems to be working at trying to get the West to see that the sanctions are really affecting the West and I get the impression he would really like to de-escalate things...if the West can see that it would be in their favour too....polls do show Europeans and Americans realising the effect of the war on them and they are moving to wanting Ukraine and Russia and EU and US to get round the table ... Canada allowed the gas turbine to be exported, Ships now crossing from Odesa to Sulina to move cargos up the Danube ..so each side making small steps
Russian inflation 15.9% and the sanctions are hitting them too....and export of Russian oil dropping and gas too
We need talks and a Summit to move things forward .....
but then again.....
https://kyivindependent.com/news-feed/minister-ukraine-may-mobilize-up-to-1-million-people-against-russia
Meanwhile Putin will be using any inflationary lever he has over the west to drive up the cost of living crisis....
I do not believe that will happen in the short/ medium term
Valueplay
short term I agree..... a bumpy ride...played out by the two boxers in the ring....The FED in the red corner and the US Economy in the blue corner......can the weakened economy hold back the FED from knocking the economy out ?? !!!..does the FED want the economy flat on he canvas to help its own reputation of being weak against inflation??
mid term- well that is regarded as 3-4 years time....so..one hopes and prays someone will come along and knock some sense into it all!!
The current macroeconomic environment is known. Many in the market are hoping for it to improve, I do not believe that will happen in the short/ medium term. Thus shares will fall further.
Many commodity prices are falling as the likelihood of a global recession further increases.
Cheers oceanfruit, Carrington, best of luck
Value and Carrington - these are really interesting exchanges thank-you... Being a long term holder I am really hoping that Carrington is correct...
Disagree Valueplay - as I have said before the macro environment is known - shares have fallen accordingly, some much more than others - the current trading levels for MKS and OCDO are priced in imo - with regards to macroeconomics - wheat and copper are down 30pct from their May high, cotton down 40pct and oil is now showing signs of stabilising and well off its highs - these are big inflation factors that have yet to play out but will in a few months time - the market is basically waiting for inflation figures to stabilise or decrease which in turn will put a halt to rate rises - once this happens the shares that have been sold heavily will reverse pdq - as you say we will see who is right and who is wrong here - good luck
dyor etc
Carrington,
There were in my view a number of red flags around the recent share placement imo as I raised in previous posts. It was at a large discount to the share price, 9%.
Plenty of downwards moves to come for this share. Last Friday Goldman Sachs downgraded Marks and Spencers to a sell. As further downgrades to Ocado retail figures, guidance has already been reduced twice this year by Ocado retail management, occur over the coming year I see further downgrades for both MKS and Ocado occuring.
We differ in opinion, the market will show whose vision is more correct. I believe the macroeconomic environment will further worsen driving this stock down more. Happy to watch this happen from the sidelines.
The labour markets are so tight in many countries at the moemnt that having people in warehouses packing deliveries is a waste for the future....Poland has a serious labour shortage only helped by 200,000 Ukranian refugees finding work...many sectors havi g to psuh wages up and up to keep staff....similar stories elsewhere...
For a mid-long term return robots are a manageable investment many are indeed looking at...
The size of the labour markets are declining and Europe has an aging demographic....we need warehouse staff elsewhere....simple as that
Many will indeed wait for Ocado next update and make the case for that coming short and the price dropping on the day ...everyone makes their choice..difficult to judge the short term for sure.... I think it is a fair game to see a rally stalling in the markets ....next week US June inflation number out etc.....then end of month ext FED decision
These are the hard lessons we learn trading, especially when we watch a good gain swallowed up by a sharp fall and before you know it you are starring at a loss.
But, its not a time to take the loss and sell or even in my view to average down - that can make the loss much worst.
So, the investment here now is in extra time to recover the loss and wait for the profit.
And the lesson - always top slice and take profit when the opportunity presents itself.
It's better to miss out on a 20% gain than suffer a 40% fall.
Valueplay - you remind me of myself around 30 years ago when I first started trading, always trying to convince myself that the bottom was not there, telling myself that although a share that I wanted to buy had showed resistance it would fall back again anyway and finding a reason not to buy - you are not alone btw, many more on here giving it large about how Ocado will fall below 500 or even 300 - looking at the 575m raised at 795p tells me all I need to know - the share has fallen a couple of times below the 795p mark but not by much - these investors are big players and can see, as I can see, that the future of retail will be dominated in the end by Ocado - maybe not for a year or two but long term absolutely - good luck with your investments
dyor etc
Lol Pokerchips,
Such strong competition in grocery currently. Many see Ocado retail continuing to shed customers during this cost of living crisis...
https://www.telegraph.co.uk/business/2022/06/22/pricey-ocado-going-crushed-aldi-lidl/
" Some Ocado customers will be shopping more at Lidl and Aldi currently "
shows the scale of the national crisis when that happens....... filling the Heinz ketchup bottle with Lidl ketchup to try and fool the kids and keep the family standards !!
Some Ocado customers will be shopping more at Lidl and Aldi currently but those two have limited online delivery options. The bigger destination for those customers currently leaving Ocado will be the main grocers with solid online delivery options, Tesco/Asda/Sainsburys.
The chance of a general election this year is very remote which is why the markets have barely moved today. New Tory prime minister will take over after Tory leadership contest and follow similar economic policies to Boris imo..
i wouldnt say the people who shop at Ocado are the sort to penny pinch, your M&S and Waitrose customer wont be running off to Aldi or LIdl im sure.
The biggest problem the markets have now is the risk of a general election, ive traded through this before and its messy when you get a leader who doesnt wqant to be removed. FTSE ftures are up as is the S&P so atm we are OK.
In normal circumstances retail is about much more than price. Currently though the spotlight is very firmly focussed on price due to the huge cost of living crisis. It's a crisis that has been rarely seen in the UK in recent years.
It's the misstep on price that's causing Ocado retail to lose sales month after month this year. It's a big part of the reason Ocado raised funds imo. Due to the repetitively falling sales at Ocado retail.
Why do so many people get the idea that retail is just about being competitive on price.
Sure, price is important but quality, choice and service are more important for many consumers, especially those who have chosen Ocado and M&S.
The 36p difference in the strawberries prices I highlighted shows the overall issue. Ocado is often 12% priced above competitors for similar goods (as in the strawberry comparison)
Ordinarily this is not so much of an issue because Ocado stock a greater range, have better customer service, less substitutions. However currently consumers are laser focussed on the price of goods versus all other issues. In the pandemic people were cash rich, treating themselves to a host of luxuries to cheer themselves up. Now though consumers will happily pay 12% less for their online grocery shop even though there's less range and there may be more subs..
Cheers SFH300
Will check this Ocado website out now