Lloyds shares have had a terrible start to 2024. The banking group started the year at 48p but quickly sank to trade at 42p as the interest rate malaise rocked financials.

General uncertainty around the timing of the first interest rate cuts will drive day-to-day trade in UK banks in the first quarter of 2024 as investors attempt to translate economic data into monetary policy predictions.

Importantly for the Lloyds share price, we are unlikely to see any major changes in the underlying economic fundamentals before Lloyds report full-year results on 22nd February.

The Bank of England will decide on their first interest rate decision of 2024 on 1st February and is widely expected to leave rates on hold.

The current trading range between 40p – 50p will likely be held until a material change in the macroeconomic environment, at which point these key psychological levels will be tested.

With the Lloyds share price trading beneath the 200-day moving average at 44.5p, the stock is set to trade with bearish bias in the near-term, with traders looking to sell into rallies.

The 42p level was held in mid-January after Lloyds built support in the area during November. This represents a critical technical level for shares because if it’s broken with any vigour, the 40p level will be in the sights of the bears.

Should a break below 42p/40p coincide with adverse developments in the real economy, Lloyds shares could well start Q2 2024 in the 30s.

The upside scenario and a retest of 50p is likely to be driven by perceptions of a ‘soft-landing’ in the UK economy that sees interest rates fall without significant disruption in the UK economy. The UK jobs market should be watched closely by Lloyds investors.

SmartSpace Software, a provider of office management software, has received a preliminary buyout offer from US investment firm PSG Equity.

SmartSpace Software shares were 30% higher after 85p after the group confirmed it was the latest UK company to receive takeover interest from US smart money.

PSG, through its majority-owned subsidiary Sign In Solutions, has proposed acquiring all of SmartSpace’s shares for 90p each in cash. That represents a premium of circa 38% over SmartSpace’s closing share price of 65p at the end of last week.

SmartSpace said its board is inclined to recommend shareholders accept the possible offer, if PSG formally launches a takeover bid at that price. The proposal is still subject to due diligence and other customary conditions.

There is no certainty PSG will proceed with a firm offer, even if it completes due diligence satisfactorily. Further announcements will come as appropriate, SmartSpace said.

The London-based company provides software to manage office spaces, desks and meeting rooms for corporate clients.

SmartSpaces announced a 16% increase in revenue in the six months 31st July, 99% of which was recurring revenue.

S4 Capital shares surged in early trading on Monday after the group said revenue would be in line with estimates and they were taking steps to manage costs.

Digital marketing firm S4 Capital saw its revenue decline in the fourth quarter of 2023, but met its own forecasts. The London-based company said its net revenue fell about 4% compared to the same period a year earlier. But that dropoff was in line with the guidance it gave in November.

S4 Capital said cost-cutting helped improve its profit margin in the second half of 2023. It expects its full-year operating profit margin to be 10-11%. The company also anticipates its debt load will be at the lower end of its previous guidance of £180-220 million.

S4Capital plans to announce full 2023 results on 27th March.

Advertising and marketing firms globally have been facing setbacks as advertisers hold back on spending amid economic uncertainties. S4’s update today will be taken positively as far as the Chairman’s comments suggest the worst may be behind the sector.

“After four years of very strong growth, 2023 was a difficult year impacted by volatile macro conditions and, consequently, cautious spending from clients, particularly those in the technology sector and from smaller project-based assignments. Our client relationships remain strong and we have also managed costs tightly,” said Sir Martin Sorrell, S4 Capital Executive Chairman.

“While it is early in the year, we are not expecting 2024 to show macro-economic improvement, and client caution on marketing spend will likely persist, although not at last year’s level given interest rates are likely to fall over time. Initial indications are for an improvement in performance in the Content practice, reflecting cost reductions, broadly similar performance in Data&Digital Media to last year and a more challenging outlook for Technology Services. In these unpredictable times, we are focused on positioning the Company for medium term growth, improving profitability and returning funds to shareowners.”

Wincanton shares soared on Friday after the logistics group announced it had agreed takeover terms with CEVA Logistics.

CEVA Logistics, a subsidiary of CMA CGM, has reached an agreement to acquire Wincanton in an all-cash offer valued at approximately £566.9 million. CEVA will pay 450p per share, representing a significant premium of 52% compared to Wincanton’s share price yesterday.

The deal valued Wincanton at roughly an EV/EBITDA of 6.8x.

The acquisition will expand CEVA’s contract logistics capabilities in the UK and Ireland by leveraging Wincanton’s expertise in partnering with grocery retailers and consumers. CEVA believes the combination will support future growth and innovation by bringing the backing of a well-capitalised, global logistics provider.

CEVA expects the acquisition to create cost synergies by sharing best practices and key talent.

Wincanton’s board are recommending shareholders vote in favour of the takeover.

Wincanton recently announced trading was in line with expectations as revenue grew 1.3% in Q3.