What’s been happening?
The market seems to think it’s worked the Fed out and it’s ever so chuffed with itself.
The US central bank is still expected to start raising rates to tackle inflation.
But investors are looking at the Omicron variant (At least 30 US states have reported cases now) and are clearly confident a rate rise is very much 2022’s problem.

Even with high inflation, investors are taking the view that actually more stimulus cheques are more likely than a rate rise, in the short term.
That was Friday’s message anyway, with the S&P 500 hitting new highs and shrugging off a toppy inflation reading. The bond market nodded along today, with US 10-year Treasury yields trickling lower.
US stock investors largely chose to tread water this morning, ahead of interest rate meetings around the world this week.
While they might be quietly confident in rates staying unchanged, there’s still enough uncertainty in the pace of Omicron’s spread and impact on the recovery to keep indices tentative.
In the UK, the miners led the way among a sea of red. Fresnillo, Antofagasta and BHP were some of the top performers on the UK 100 as the market got a bit more optimistic about a global economic recovery.
We say ‘global’ but really that confidence came from China’s comments on Friday that the government could offer more stimulus next year to get growth going again.
Given the huge infrastructure projects China is known for, and how much it hoovers up global commodity demand, metal prices rose and took the miners with them.
Buzzing 🐝
Lotions and potions business Croda has been on the up.
The FTSE 100 firm supplies chemicals to some big hitters in the cosmetic space like Unilever, Procter & Gamble, L’Oréal and Boots.
And it looks like it’s got a fan in UBS.
The Swiss investment bank is eyeing up just how much more efficient the group could be without its polymer and plastics division.
The business-to-business segment sells materials for car-making and food packaging, and Croda started thinking about getting rid of it in May this year.

The strategic review came as Croda wanted to prioritise its “investments in faster-growth life science and consumer markets, which now represent over 80% of the group’s profitability."
UBS thinks it’s “most likely” the chemicals firm will sell off 75% of the division after reading into management comments, which would bolster Croda’s cash pile and let it concentrate on the most profitable relationships.
The company’s current valuation might put some value hunters off (40x earnings is punchy in anyone’s book) but the bank is clearly upbeat on the potential for growth from here.
Analysts upgraded Croda to ‘buy’ from ‘neutral’ earlier this month and said it ‘ticks all the boxes’ for the type of firm you’d want in your consumer chemicals stocking this year.
Got stung 🚑
DotDigital is still nursing its wounds.
Shares in the software-as-a-service business fell off a cliff in mid November after full-year results prompted investors to whack the sell button.
To be fair to the email marketing firm, headline revenues were actually up 23% to £58.1m, with 93% of that recurring (investors tend to love that steady stream of money coming in).
But the market was clearly concerned the rise only translated into 5% profit growth. Given the lofty valuation dotDigital carried into the results, shareholders really were hoping for a bit more.

A price-to-earnings (P/E) ratio of 50 might not be unheard of in tech. Big potential often comes with a hefty pricetag in the sector and the argument is that growth rarely comes cheap.
But investors will only pay up for shares when they see the company playing its part too.
And with clients using lower margin services like SMS texting over email (which can have margins over 90%), investors decided the price needed to come down to reflect reality rather than hope.
There’s likely an element of profit-taking in there too, after the firm’s strong run this year, but it’s a good case study in how investors keep an eye on the valuation and try not to let emotion override fact.