Markets await US inflation update and Fed meeting minutes, Everyman Media returns to profit and LADbible publisher sees earnings drop

“There is one key thing dominating the agenda today – US inflation figures. Markets have recently taken the view that the Fed needs to ensure stability in the financial system following the banking crisis. That means easing back on rate hikes which could topple the economy,” says Russ Mould, Investment Director at AJ Bell.

“However, the reason why rates have been going up so fast over the past 12 months is down to rising inflation, so today’s update on the cost of living in March will still matter to the Fed and its monetary policy. The consensus forecast is a 5.6% rise in core inflation year-on-year, up slightly on February’s 5.5% reading.

“The rate of inflation in the US has been easing back since October 2022, providing some relief to consumers and businesses. However, if the rate comes in higher than expected at today’s reading then markets could easily throw their toys out of the pram. It would also stir the pot that the Fed might need to stay on its current path with rate rises.

“Further insight into the Fed’s current thinking will be found in the latest minutes of its interest rate committee meeting, published later today.

“Wall Street was mixed last night with the markets struggling to find direction ahead of the inflation figures. Europe was in a better place on Wednesday, including a 0.2% rise in the FTSE 100 to 7,801, led by utility companies and banks.

“Investors aren’t taking too many chances though, with demand for so-called ‘safe haven’ asset gold continuing to grow. The precious metal jumped a further 0.6% to $2,015 per ounce, meaning it has increased by 5.3% over the past 30 days.”

Everyman Media

“Posh cinema operator Everyman Media has a tricky path to navigate through the cost-of-living crisis.

“It needs to keep prices low enough that it remains an affordable luxury for a large enough audience, while at the same time maintaining the quality and standards which help incentivise film-lovers who can stream most films they want at the click of a button to go out and pay to see the latest releases on the big screen.

“The company’s model is also reliant on people taking advantage of the opportunity to order food and drink to their seats. If people decide they can’t afford to do anything other than rock up and watch the film that could weigh heavily on profit.

“For now, the business appears to be doing a decent job by announcing a big jump in admissions in 2022 versus 2021, partly explained by the emergence from the pandemic, and a return to profit.

“And in a sign of its confidence the company is set to continue with the rollout of new venues.”

LBG Media

“It might not want to present it in these terms but the online publisher of LADbible specialises in clickbait and it is very good at what it does.

“The company is heavily focused on social media and video streaming platforms and has an agreement with Facebook to share revenue from in-video adverts on the platform. It is still waiting for other platforms like TikTok, Instagram and Snapchat to develop a monetisation model for third parties.

“Offering advertisers access to the hard-to-reach 18-34 demographic helps drive advertising revenue. However, the company is not immune to wider economic trends and earnings fell in 2022 as advertising spend dropped.

“Whether the laddish brand will remain relevant for the next generation is open to question and the company may have to adapt to survive.

“Opportunities for the business include building out the brand in the US and growing its LADnation research panel to offer advertisers more data and deeper insight.”

These articles are for information purposes only and are not a personal recommendation or advice.