FTSE makes calm start after a wild week and Cineworld toasts bumper weekend

“The FTSE 100 made sedate progress on Monday morning although you would imagine investors would take that after something of a wild ride last week driven by inflation fears and a bitcoin crash,” says AJ Bell investment director Russ Mould.

“The cryptocurrency remains more up and down than a yo-yo, enduring further heavy losses over the weekend before staging a modest recovery amid a crackdown in China.

“The UK’s flagship index traded higher despite miners’ share prices being pulled down by falling iron ore prices as Chinese authorities warn of excessive speculation.

“Observers will be asking if this is the week the FTSE 100 finally pushes ahead of the 7,000 mark after a period of going backwards and forwards around this level.

“A second estimate of US GDP on Wednesday may provide some direction, in addition to consumer confidence and price data which should help show whether the world’s largest economy is simmering nicely or is in danger of bubbling over.

“After recent evidence of rapidly rising prices in the UK, there is likely to be considerable attention on Bank of England Governor Andrew Bailey and his colleagues when they appear before MPs to testify later.

“Like a master investigator, the markets will be laser focused on the slightest clue their words might offer on the future trajectory of interest rates and financial stimulus.”

Cineworld

“Cinema operators have been waiting for this moment for a long time, keeping their fingers crossed that consumers would feel confident enough to return to the big screen. Judging by Cineworld’s trading update, it looks like people have missed the experience and we’ve just had a bumper weekend for cinema visits.

“Cineworld doesn’t give any figures for sales or admissions, so we’re only going on the word of the management that performance was good. Yes, the company said UK trading beat its expectations – but what if they were extremely low in the first place?

“The weather was atrocious in many parts of the UK and so going to the cinema would have been a welcome relief, particularly to keep children entertained. But what happens if we finally get some good weather this weekend and from then on?

“The nation might prefer to enjoy the great outdoors and associated leisure activities, instead of sitting in a dark room with strangers and worrying about whether the ventilation system is up to scratch.

“Cineworld’s operations span the US and parts of Europe, so it is not a pure UK story. The cinema industry is celebrating the success of Fast & Furious 9 in China over the weekend, so Cineworld will be hoping that title will be also be a blockbuster hit once released in the UK and US in late June.

“The success of the cinema is heavily dependent on the quality of the film slate and there aren’t that many big films lined up for release until later in the summer. This suggests Cineworld will still have to keep its fingers crossed that the past weekend’s trading boost wasn’t a one-off.”

These articles are for information purposes only and are not a personal recommendation or advice.