This week

For those fans of social media, the past week has been something of a revelation. The Twittersphere was sent into something of a spin on Thursday as the platform itself was the subject of a cash bid from famed entrepreneur, Elon Musk.

Having already built up a 9.2% position in the company and rejecting a seat on the board this week, the somewhat eccentric Tesla founder has bid $54.20 a share for Twitter, valuing it at about $40bn. Announcing the move unsurprisingly…on Twitter, Mr Musk simply tweeted “I made an offer”. Published in the filings of the proposed takeover, he also said "It's a high price and your shareholders will love it." Whilst purchasing the platform may seem like a shrewd investment, one Twitter linked purchase this week certainly doesn’t.

The buyer of a non-fungible token (NFT) of Twitter founder, Jack Dorsey's, first tweet says he "may never sell it" after receiving a series of bids nowhere near his initial outlay. Sometimes touted as the digital answer to collectibles, the huge loss highlights the somewhat volatile and wholly illiquid world of NFT investing, with the buyer being offered just over $6,200 (£4,720), about 0.2% of the $2.9m he originally paid for it. With the owner touting the purchase as the “Mona Lisa of the digital world…There is only one of that and it will never be the same,” it may be more of a case of how such investing is framed…

Whilst prices in the digital world may be falling, in the real world, they are going very much in the opposite direction. Data released on Wednesday showed that domestic inflation rose to a 30 year high of 7% for March, driven by fuel prices and furniture costs. To put this into some context, the month on month rise was the highest for the time of year since the Office for National Statistics' records began in 1988.

It was much the same story across the pond as the US also released strong inflation data the previous day. With prices jumping 8.5% year on year, their fastest since 1981, there was some light at the tunnel to be found. The data also showed monthly underlying inflation pressures moderated as goods prices, excluding food and energy, dropped by the most in two years as consumers looked for experiences rather than goods to spend their money on, a likely product of COVID restrictions easing.

From an NFT depicting oil on canvas to just oil, both fell significantly throughout the week as US inventory data, released during the middle of the week, showed that reserves increased much more than expected, with refiners surprisingly hitting the brakes on activity. Additionally, a big part of the build in stockpiles came from a slump in exports, which fell week on week by just over 1.5 million barrels a day, dropping to 2.18 million, its lowest level in 13 weeks.

Next week

With markets in the UK, Europe and US all closed in observance of Easter Monday, the coming week should be slightly subdued. However the beginning of the week does see the National Statistics Bureau of China releases its nation’s GDP numbers.

On Easter Monday, economists will scrutinise data often considered being the broadest gauge of economic activity and the primary measurement of an economy’s health. Measuring the change in the total value of all goods and services produced by the world’s second largest economy. The numbers will make for particularly interesting reading as the number of COVID cases continues to rise in the Orient with the southern city of Guangzhou now looking like it will enter full lockdown soon.

Across to the continent during the middle of the week, as investor focus switches to Germany as the Eurozone’s largest economy reports the results from its business climate survey. The survey is highly respected due to its large sample size and historic correlation with German and wider Eurozone economic conditions and tends to create a hefty market impact when released. The data is so useful in that it acts as a leading indicator of economic health with businesses reacting quickly to market conditions, with changes in their sentiment acting as an early signal of future economic activity such as spending, hiring and investment.

An exhausting week comes to an end with a glut of domestic data, with retail sales figures being the most eye catching. As inflation begins to bite, it will be interesting to see if the UK consumer is beginning to tighten their belt as disposal income is slowly eroded away. With savings ratios still high and a palpable want to spend on discretionary items after lockdown, expenditure has remained elevated on the high street, with borrowing and credit card usage reaching levels not seen for decades. However, this could be a sign of the consumer wanting to borrow and spend before rates and prices start to rise substantially.

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 14 April 2022.