Share Prices & Company Research


09 April 2024

Market Round-Up

UK shop price inflation has hit its lowest level since the start of the cost-of-living crisis in 2021. March saw a significant drop, with levels plunging by nearly half to 1.3%. This marks the first time in over two years that the figure has fallen below 2%. Measured monthly across all retailers, this metric acts as an early warning system for price pressures, providing valuable insights into future trends.

The decline in shop price inflation can be attributed to various factors, as highlighted by Helen Dickinson, the Chief Executive of the British Retail Consortium. A significant contributor is the noticeable decrease in food prices, driven by easing costs and increased competition among retailers. Many shops have faced pressure to maintain competitive pricing to retain customers, resulting in price matching and promotions, particularly during the Easter holidays. While food prices continue to rank among the highest in terms of inflationary pressure, there has been a noticeable decline compared to previous months. It is worth noting that it was at an all-time high of 15.7% in April 2023, during the invasion of Ukraine by Russia.

This trend of slowing price growth offers encouraging prospects for the resurgence of consumer spending this year. As consumers find relief in lower prices, they are more likely to increase their spending, thereby contributing to a potential economic recovery following last year's recession. The combination of competitive pricing strategies and consumer optimism could indicate a more positive outlook for the future.

The recent 7.4 magnitude earthquake in Taiwan, the strongest in 25 years, has resulted in fatalities, numerous injuries, extensive damage to buildings and also caused disruption to the semiconductor industry. Taiwan, a dominant force in the chip manufacturing industry, supplies over 60% of the world’s semiconductors for smartphones and Artificial Intelligence (AI). The majority of this production is manufactured by a single company, namely Taiwan Semiconductor Manufacturing Corporation (TSMC) which supplies tech giants Apple and Nvidia. However, this concentrated production presents significant risks, especially in regions like Taiwan which is prone to seismic activity. Even the slightest tremor can disrupt production and the supply chain.

During the earthquake, staff were moved out of TSMC’s factory and into safety. There was no major damage to the factory, and production was expected to resume very soon after safety checks. On the morning of the earthquake, TSMC shares fell by 1.3%, but news of continued production could induce a recovery in the share price.

In an aim to diversify its production geographically, TSMC unveiled plans to expand its production into locations such as China, United States, Japan and Germany. By dispersing production across different regions, TSMC seeks to minimise the impact of potential disruptions, ensuring it can meet the growing demand for its semiconductors worldwide, while enhancing the sustainability of its supply chain in the future.

Please note that this communication is for information only and does not constitute a recommendation to buy or sell the investments mentioned. Investments and income arising from them can fall as well as rise in value. The information and views were correct at time of publication but may have changed at point of reading

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