BP and Shell’s shares were firmly higher on Monday after dramatic events in the Middle East over the weekend sent oil prices higher and took the FTSE 100 oil majors with them.

Three US servicemen were killed and many more injured in attacks by Iran-backed militia near the Syria/Jordan border. The US President has promised retaliatory measures in response.

BP rose 1.5%, and Shell gained 1.2% after Brent oil traded near $84 on Monday before falling back.

BP and Shell shares have struggled with falling oil prices in recent months, and the two companies trade significantly below 52-week highs.

Although today’s news may boost their share prices in the short term, the ongoing crisis in the Middle East may have implications for the demand story should inflation jump and interest rates remain elevated as a result.

“Oil prices advanced thanks to a renewed escalation in Middle East tensions, with a further attack on shipping in the Red Sea by Houthi rebels and three US soldiers killed in a drone attack on a US service base on the border of Jordan and Syria,” said AJ Bell investment director Russ Mould.

“Crude hitting its highest level since November feels ominous given it adds inflationary pressure at a time when borrowers and the markets are hoping to see interest rates cut. Geopolitical factors seem to be propping up oil at a time when the wider dynamics of supply and demand look less than favourable for the energy market.”

Chill Brands shares lost around a third of its value on Monday after the UK government announced it would introduce measures to ban disposable vapes entirely to stop them getting into the hands of children.

The news sent Chill Brands into a tailspin and they were trading down around 22% at the time of writing after recovering from the worst levels.

“Chill Brands implies it is not affected by the latest announcement because recharging ports on its products mean they are not classified as disposable,” said AJ Bell investment director Russ Mould.

“The market seems to question this logic given the fierce share price sell-off. Effectively, investors are saying there is a major risk to earnings, whether it is from Sunak’s latest announcement or the general direction of travel by the government to stop young people getting into the vaping habit.”

According to Action on Smoking and Health (AS), 7.6% of 11 to 17-year-olds now vape on a regular basis, compared to 4.1% in 2020. Health experts have publicly welcomed today’s news.

Chill Brands has developed a range of vaping products containing zero nicotine and are stocked by WH Smith, Morrisons, and Shell and BP roadside garages. Chill’s zero nicotine vapes are not designed in the garish colours associated with the explosion of use among children.

The company said they are working on a new range that will be fully compliant with incoming laws.

In response to the UK government’s ban, Callum Sommerton, Chief Executive Officer of Chill Brands, said:

“The vaping landscape is constantly evolving, creating opportunities for businesses that are able to navigate the regulatory environment. The Chill brand has gained rapid traction with the support of major retailers, and I am confident that it will continue to do so as we move forward with our plans to launch reusable pod system vapes.

“Chill Brands Group is an agile company, and we are prepared to adjust to any legislation that may be enacted. In the meantime, our existing high-puff count and rechargeable devices will continue to be sold by US and UK retailers who have demonstrated a strong appetite for products brought to market under the Chill brand.”

First Class Metals shares have had a pretty awful week, and investors seem unprepared to step into the stock, despite the company’s range of promising projects.

First Class Metals shares have cratered 30% in 2024 so far, and we’re not even at the end of January.

The stock is down 69% over the past year.

This week’s sharp decline resulted from major investors dumping their entire stake in the company.

The disposal announcement was made on Wednesday, and First Class Metal shares haven’t been able to catch a bid since.

Focused on Ontario, Canada, the company has an attractive portfolio of projects diversified across lithium, copper, gold, nickel and PGMs.

In December, First Class Metals said they had encountered lithium-bearing pegmatites in all nine targeted drill holes in a recent campaign at the lithium ZigZag project. This would have been welcome news for investors with the license sitting in close proximity to Green Technology Metals’ Seymour Lake Project and Battery Age Minerals Limited’s Falcon Lake Project.

In addition, the company recently secured exploration permits for its Hemlo and Esa licenses which have visible gold and promising historical studies. First Class has confirmed high-grade showings in the vicinity.

There is a lot to be excited about.

However, as with all early stage mining exploration companies, there are high risks attached to First Class Metals.

First Class Metals has been clear the next stage in their ‘Big Four’ projects’ development will be drill campaigns later this year. This will be a capital-intensive exercise.

The company raised £603,000 via a placing at 6p in November after raising £1m at 10p in June. Investors may fear the company will need to tap the markets again to fund the development of their projects with shares at depressed levels.

With the market cap now down to £4m, meaningful funding rounds could be highly dilutive for existing shareholders. If shares continue to slide, the next placing could well be beneath 3p.

Investors will hope that anticipated results from the recent activity at the ZigZag lithium project provide a catalyst to move the share price higher.

LVMH shares were sharply higher on Friday after the luxury goods group announced a very respectable increase in sales in 2023, helping to dispel fears about a broad decline in demand for luxury goods.

LVMH were 12% higher at the time of writing on Friday after announcing group sales grew 13% on an organic basis to €86.2bn in 2023.

The luxury sector has been under pressure due to concerns that the cost-of-living crisis is finally starting to drag on the wealthy’s propensity to splash out on big-ticket items.

Sales in LVMH’s Fashion & Leather Goods division rose 9% to €11.3bn, suggesting the concerns about a luxury slowdown were overblown, if only for LVMH’s brands.

Perfumes & Cosmetics sales rose 10%, and Wines & Spirits sales grew 4%. Watches & Jewelry sales growth was sluggish, rising just 3%. Watches of Switzerland recently warned of slow demand for high-end watches so this seems to be a sector-wide issue.

“The numbers, although broadly in line with sell-side estimates, are being well received by the market this morning. Concerns over a slowdown in the luxury goods market have weighed on LVMH shares over the last twelve months following a period of extremely strong growth, and the results show that while growth is naturally moderating, it remains at a healthy level, particularly in the all-important Fashion & Leather Goods division,” said Mark Nelson, Senior Equity Analyst at Killik & Co.

“We remain positive on the medium-term growth prospects for the luxury goods sector and on LVMH’s industry leading position. The shares trade on a price to December 2024 earnings ratio of 22.6x. (Buy)”