FTSE searching for direction with US GDP figures in sight, and Pets at Home reaps benefit of pet ownership surge

“The FTSE 100 seems to be on a road to nowhere at the moment,” says AJ Bell Investment Director Russ Mould.

“Fears about inflation have subsided for the time being and even some volatility in Asian markets wasn’t enough to wake the index from its slumber.

“There is a relative dearth of economic data which could push markets in any particular direction in the coming days, although a second estimate of first quarter US GDP later on Thursday could renew focus on inflationary pressures, particularly if the already elevated number is revised upwards.

“Metal prices are also creeping higher again. This could put yet more focus on the risks of the global economy overheating but has at least given the UK mining sector a bit of a lift this morning.

“The market doesn’t seem too interested in news that HSBC is withdrawing from the US retail banking market as it continues its pivot towards Asia.

“However turning around such a large super-tanker of a business requires lots of these incremental moves and the decision could be afforded more significance over time.”

Pets at Home

“Hands up, who got a dog in lockdown? Judging by the foot traffic around local parks at 7am and 6pm, it seems many people did.

“Being stuck at home in 2020 and a large chunk of 2021 has seen many individuals seek a new furry addition to their family, and pet ownership has rocketed.

“That’s clearly been a tailwind for Pets at Home, but like many pandemic-induced trends it seems inevitable that pet ownership momentum could ease as we move into life beyond Covid-19.

“Pets at Home has expanded its customer base during the pandemic and it now has a large opportunity to cross-sell services such as healthcare and pet grooming.

“The beauty of pets is that owners are generally willing to keep spending regularly on their four-legged friends, thereby creating the opportunity for Pets at Home to collect a constant stream of cash.

“With this tailwind firmly in place, Pets at Home must now embrace digital technology to make it easier for customers to manage their pet needs, and ultimately make it easier for them to spend more money.

“Competition in the pet supplies space is fierce, but Pets at Home seems to be doing all the right things such as investing to improve its infrastructure and technological capabilities, as well as crunching all the data it has on customers to sharpen its selling skills.”

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