Huawei Man, Give Us A Break

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Tuesday, 21st May: Quite frankly as we have seen with trade disputes before, especially when concerning such erratic players in their respective discussions, sentiment changes like the wind. At times investors sometimes muster up optimism or a change of tune in order to remind themselves there’s more going on. But given the enormity of the parties involved it is hard to overlook, especially when the domestic picture is as bleak as any.

The FTSE began today higher despite losses on Wall Street to begin the week. London shares had one eye on trade developments which saw the decision to delay Huawei bans (it is pronounced wah-wey). The news saw Asian shares recover and it has helped US markets open higher with the NASDAQ currently the best performing up 1.2%. The other eye was on Theresa May’s speech surrounding Brexit progression. Talks appear to have stalled again, which is old news, thereby increasing the chances of May’s departure. In either case the chance of a ‘hard’ Brexit increases and this has led to a drop in the value of sterling, shielding the loss of steam on the FTSE 100 which eventually closed 0.25% higher today.

In companies news it was a steady day. Tesco has announced plans to sell their mortgage portfolio which has now ceased new lending. The decision comes as the challenging environment makes higher returns more difficult.

Away from the markets but not the same themes affecting them, Jamie Oliver’s restaurants have announced they’ve fallen into the hands of administrators. The news puts over 1,000 jobs at risk and further highlights continued struggles for the UK’s high-street occupants. A little over 10 years ago the mid-market for dining out was notably different to today. It is arguably the most difficult area and the headwinds can’t be pinpointed to one source.

Majestic Wine has announced they’re considering the sale of their branded retail business and related business-to-business operations.

Galliford Try shares jumped over 15% today after reassuring investors following a sobering update in April. The write-down announced in April has seemingly been confirmed as the start and end of bad news for now. With no new problems arising and a visible payback period.

Sainsbury’s topped the FTSE with gains of 4.7% today after revealing the benefits from the Argos acquisition and associated cost synergies. Shares climbed despite broker concerns over the blurred profitability of the core business as a result of two businesses joining.

Halfords saw fiscal pre-tax profit decline 24% in 2019, blaming mild winter temperatures, weakened consumer confidence, cost inflation and investment costs. So basically, nothing went right is what they’re trying to say.

 

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