FTSE higher after seesaw session on Wall Street, and Rightmove reports surge in housing market activity

“The FTSE 100 was firmly higher on Tuesday after traders on Wall Street were left with sore necks thanks to the whiplash-like nature of last night’s session,” says AJ Bell Investment Director Russ Mould.

“Comments from the Trump administration that the US-China trade deal was over led to selling before a rapid clarification and a tweet from Donald Trump himself confirmed the deal was ‘fully intact’ saw stocks close materially higher – the tech-heavy Nasdaq index even reaching a new record high.

“Strong manufacturing data from the Eurozone also helped investors put on a happy face, although second wave concerns and geopolitical strife linked to Hong Kong have not gone away.

“Oil prices continue to creep up with the global benchmark Brent now firmly above $40 per barrel as lockdown measures start to be eased and supplies begin to tighten. Gold retained its shine though at $1,754 per ounce, suggesting there is still demand for safe havens amid lingering uncertainty.”

Rightmove/OnTheMarket

“The reopening of the property market has been like a dam bursting judging by today’s updates from property listings sites Rightmove and OnTheMarket as pent-up demand has led to a flood of transactions.

“Remarkably Rightmove has seen all 10 of its busiest ever days on the platform since 13 May when restrictions began to be lifted.

“What remains uncertain is whether this will slow to a trickle or continue in a steady stream once this initial activity drains away.

“Both businesses have extended their cut price deals for agents indicating they remain aware of the acute pressures facing the industry.

“The question for Rightmove is whether it can return to the level of fees charged pre-coronavirus and therefore to its previous levels of profitability. The company was already losing agents before the pandemic and this trend is continuing, with its immediate response to the crisis drawing fire from the industry.

“Rightmove continued to grow through the financial crisis and arguably its proposition is even more important in a downturn as clients become increasingly desperate to sell homes.

“Challenger OnTheMarket is in a very different position as an agent-led venture which is looking to disrupt Rightmove’s dominance of the market. Impressively it has seen record delivery of leads to agents despite a big reduction in marketing spend.

“Many of its subscribers are on free trials and though the discounts on offer to paying agents are smaller than Rightmove’s, that reflects much lower undiscounted fees.

“Will agents use the crisis as an excuse to quit Rightmove and move to a less expensive competitor? Or will they take a safety-first approach and stick with a tried and trusted, if more pricey platform?”

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