This week

It was in 1946 when Massachusetts born Earl Tupper designed his first line of polyethylene kitchenware, leading TIME magazine to soon rave about the plastic that could "withstand almost anything." After only a few years, Tupperware storage units became a 1950s kitchen revelation. Properly "burping" Tupperware to get an airtight seal, flipping the containers upside down to prove they didn't leak and dropping the unbreakable plastic bowls down flights of stairs, the business model of direct sales only at “Tupperware Home Parties” revolutionised the way a product could become a lifestyle brand.

However, the 77-year-old business has been struggling in recent years to maintain its relevance against a growing collection of rivals. Suffering with a staid image that fails to attract younger customers, coupled with a drastic reduction in consumer pullback in home product purchasing, the company now finds itself in financial trouble, with its shares having fallen 90% since 2021.

It is with this in mind that we examine the UK’s inflation data, released this week, with the Bank of England acting as a sharp contrast to Tupper’s invention, failing to keep a lid on things. Britain is now the only country in western Europe with double-digit inflation in March, after prices fell less than expected to an annual 10.1%, above the 9.8% forecast. The data showed that prices for food and non-alcoholic drinks were 19.1% higher than a year earlier, the biggest such increase since August 1977, which has been partly attributable to in the higher costs for biscuits and cake.

Worryingly, core inflation, a reading that strips out volatile energy and food prices, also failed to fall as expected, holding at 6.2%. Services inflation, which the Bank of England views as a proxy for domestic price pressures also remained unmoved at 6.6%.

Although inflation remains stubbornly strong here in the UK, across the pond, although having seen its inflation levels fall quicker, the US federal Reserve is also struggling to be a container of price rises. Wednesday saw Federal Reserve Bank of New York President, John Williams, comment that inflation is still at problematic levels and the U.S. central bank will act to lower it if required. Interestingly Mr. Williams did note that central bank forecasts released recently flagged the prospect of more rate hikes to help lower inflation, failing to counter when asked, that the view was incorrect.

Thursday saw markets dragged down partly by a note from JPMorgan analysts warning that they expected the U.S. debt ceiling to become an issue as early as next month. Shortly afterwards, the cost of five-year US credit default swaps, which are contracts that act as insurance against exposure to U.S. Treasuries, rose to their highest since 2011.

It seems that those on both sides of the US political spectrum will need to freshen negotiations up to avoid further jitters throughout financial markets and to avoid running out of money by mid-August at the latest.

One group who won’t be keeping things fresh for much longer does seem to be Tupperware, who in company news this week, sadly admitted that it "has concluded that there is substantial doubt about its ability to continue as a going concern", paving the way for administration. The company has fallen a long way from even relatively recent times. It was only back in 2015 that it was estimated that there was a Tupperware party held somewhere in the world every 1.4 seconds. However, it seems that like its pioneering products, the company’s fate is now close to being sealed.

Next week

As the year begins to gather pace and with May just round the corner, the beginning of the week will be all about moving as Rightmove, the online estate agent, releases its House Price Index data, detailing the change in the asking price of homes for sale on its website.

With the housing sector beginning to cool as the Bank of England’s rate rises start to have the desired effect, making mortgages more costly and timing the market, it will be interesting to see whether the theme continues to manifest. Although this acts as the UK's earliest report on housing inflation, the data can sometimes produce a relatively mild impact due to asking prices and selling prices not always being correlated, nonetheless it should be vital when judging the health of the overall UK housing market.

They say a little confidence is everything and with this in mind, we head over to the US on Tuesday for its consumer confidence numbers. Financial confidence is a leading indicator of consumer spending, which accounts for most of the overall economic activity and so a survey data of around 3,000 respondents, all asked to rate the relative level of current and future economic conditions including job availability, business conditions, and overall economic situation can prove to be invaluable.

From data covering addresses at the beginning of the week to an address at the end, investor focus should shift to Japan on Friday. A press conference from the Bank of Japan, outlining their future rate policy, should hopefully bring us no surprises this month, as it is widely expected that they will hold off on its policy action at its next meeting. It is just too early for the incoming governor, Kazuo Ueda, to make policy adjustments and there is no indication at this point that policy normalisation is urgent from the central bank.

The week will be rounded off with US monthly Core PCE Price Index numbers. The data differs from normal inflation readings in that it only measures goods and services targeted towards and consumed by individuals. Prices are weighted according to total expenditure per item which gives important insights into consumer spending behaviour. Adding even more importance to the figures is that this is reportedly the preferred piece of data for the US Federal Reserve, using it as their primary inflation measure.

 

The information in this blog or any response to comments should not be regarded as financial advice. If you are unsure of any of the terminology used, you should seek financial advice. Remember that the value of investments can go down as well as up, and could be worth less than what was paid in. The information is based on our understanding as at 21 April 2023.