Finimize - 🤑 Glencore's getting greedy

What’s going on here?

Swiss commodities giant Glencore released a swaggering update on Friday, but that hasn’t stopped it from fantasizing about what could be.

What does this mean?

Glencore and its peers boasted champagne-worthy results in 2022, after war-induced shortages led to wild price swings that buoyed up profit for commodities firms. And while some of Glencore’s rivals have been busy managing expectations for 2023, the Swiss goliath is being anything but humble. The firm’s trading business is on track for another bumper year, pushed along by a strong quarter of energy trading. And even though its mining segment dealt with a few roadblocks at the mines, Glencore’s sticking to its full-year production targets across all of its divisions.

Why should I care?

For markets: Alexa, play “Rich & Sad” by Post Malone.

Glencore unveiled this update before the scheduled release date, which might be part of a brewing masterplan. See, it recently offered to buy Canadian mining rival Teck Resources for $23 billion, planning to spin off anything that coal touches and rebrand the remainder as “GlenTeck”. That would have helped Glencore become less reliant on coal and stock up on green-energy-fueling metals like copper and zinc, a sure bet to please eco-conscious investors. But Teck rejected the offer, and Glencore’s been trying to pull the firm to the negotiating table ever since. Time’s running out, though: Teck’s due to vote on its own spinoff plans this week.

The bigger picture: Deal or no deal.

Even if the deal’s dead, this is a sign of what’s to come in the industry. The world’s biggest commodity companies have been steadily preparing for life after fossil fuels, stopping or winding down their dirtier operations and expanding into decarbonizing materials like copper, nickel, and lithium. And while you can bet they’re on the hunt for fresh sites, snapping up rivals is the quickest way to make headway.

What’s going on here?

Data out on Friday showed UK retail sales were dampened – most likely by a literal downpour – last month.

What does this mean?

Hardy British households had managed to keep spending ticking up in the face of rampant inflation this year. And while that streak was broken in March, hefty price tags mightn’t be completely to blame. England and Wales were hit with their heaviest rainfall in over 40 years, marking the beginning of a beautiful British springtime. That kept shoppers inside and away from the shelves – but even if they made it to the shop, there wasn’t much to buy: shelves were pretty barren after hiccups abroad constricted supermarket supply chains. The weather set the tone: the volume of goods sold in stores and online slipped 0.9% in March from the month before, a much steeper drop than the 0.5% economists expected.

Why should I care?

Zooming in: Grab your rose-tinted glasses.

Even with Friday’s lackluster data, January and February’s robust spending meant retail sales stepped up 0.6% last quarter. That’s the first time a three-month period has marked an increase since August 2021, the heady bounceback period that followed lockdowns. Plus, March’s dip could just be a blip: separate data out on Friday showed consumer confidence dramatically improved in April, jumping to its highest since before war broke out in Europe. And because that’s a forward-looking stat, it could mean the consumer spending picture’s brighter than it looks at first glance.

The bigger picture: Pats on backs all round.

Remember, retail sales only count spending on goods. The data doesn’t include services, which tend to make up a big chunk of all consumer spending – so you can’t make any concrete, far-reaching conclusions based on that alone. But if it’s any solace, the data suggests that the UK’s much more robust than economists thought, and there’s some hope that the country might not shrink this year like the IMF’s predicting.