Markets finish the week treading water and Homeserve demonstrates its resilience

“Markets ended the week on a lacklustre note with the FTSE 100 only managing a 0.1% gain to 6,258, minor increases among European stocks, and a mixed performance from Asia,” says Russ Mould, Investment Director at AJ Bell.

“It’s a continuation of the push-pull factors influencing stocks. On one hand there is ongoing nervousness about the pandemic and localised flare-ups. On the other hand, there is the hope of more stimulus measures until there is firm evidence that the pandemic is under control and economies are getting back on track.

“Among UK stocks, technology, healthcare and utilities gave support to the FTSE 100 with Avast and Aveva the top risers, up 2.1% and 1.9% respectively. JD Sports was the top faller, down 1.8% perhaps as a reflection of investors’ nervousness over the ability for retail sales to deliver a sustained recovery while there is the likelihood for rising unemployment.

“In the US there is growing concern that the tech rally might soon run out of steam, not helped by Netflix disappointing with its latest update."

Homeserve

“There are some companies which just tick along regardless of what’s going on in the world and that includes Homeserve.

“Despite a backdrop of a global pandemic, households still feel their homes need protecting from unwelcome emergencies such as the boiler breaking down or the drains getting clogged up.

“Life needs to function as normally as possible at home, even if the skies are on fire from a health crisis and a radical change to the way we work and play.

“Homeserve says its membership policy renewal and cancellation rates have continued in line with historic trends and with no impact from the Covid-19 pandemic. Unsurprisingly, customer satisfaction is at record highs, probably as individuals are relieved that any emergency repairs are being sorted. There is nothing worse than being stuck at home when something essential doesn’t work.

“The fact Homeserve’s find-a-tradesperson website Checkatrade had its largest ever number of consumer web visits in June reflects how individuals are spending more attention to home improvement, perhaps because they’ve been stuck indoors for so long this year and their four walls need sprucing up.

“A lull in marketing activity during the early stages of lockdown could result in lower customer acquisition rates for the full year but that isn’t disastrous to Homeserve in the bigger scheme of things. After all, there aren’t many companies which can boast such resilience during the pandemic.”

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