FTSE struggling for direction ahead of US jobs data, and Aston Martin declares return to health despite new profit warning

“It looks like investors are really trying to start 2022 in an optimistic spirit but despite a clear diminishing of concern over Omicron, there are still enough worries out there to prevent them from getting carried away,” says AJ Bell Investment Director Russ Mould.

“Later on the US non-farm payrolls number will be closely monitored. The first release based on hard data to give an insight into the health of the world’s largest economy, the jobs data is also a key influence on the decision making of the US Federal Reserve.

“A stronger than expected number might add to the impression given by the recently released minutes of the Fed’s latest meeting that rates are set to rise further and faster in the short term and provide another jolt to markets.

“The extreme volatility in Bitcoin continues, as it falls to its lowest level since September at less than $41,000 having traded at a record high of $69,000 in November. Whatever the merits of the cryptocurrency such wild swings would preclude it from supplanting traditional currencies any time soon.

“In the UK market investors reacted with a shrug to news that Royal Dutch Shell intends to buy back shares ‘at pace’ after strong profits from gas trading in the fourth quarter – not helping matters was a weaker than forecast performance from its oil trading and refining unit.

“House prices continued to surge in December based on the latest figures from the Halifax, raising the question of just how long the housing market can keep defying gravity.”

Aston Martin Lagonda

“Aston Martin seems to be hoping for the type of comeback that the James Bond franchise achieved when Daniel Craig brought a new spark to the film series in 2006.

“The company declares that it’s been a ‘very long time’ since the core business was as healthy as it is now. That’s a bold statement given the rocky road it has travelled since being a listed business, and even beforehand. Let’s hope management doesn’t live to regret such a bullish comment, given Aston Martin has form for disappointing shareholders.

“Since floating in 2018, the company has stomached large debts with high rates of interest, it has suffered multiple profit warnings, become embroiled a legal dispute which caused a hit to earnings and cash flow, and saw too many cars sitting in dealer showrooms. The story sold to investors at the IPO certainly didn’t live up to the hype.

“More recently Aston Martin has seen wholesale volumes pick up, its DBX SUV model has been a welcome hit, and its selling prices have improved. Unfortunately, the company still can’t shake the habit of delivering some sort of bad news every time it updates the market.

“The latest setback effectively adds up to another profit warning, whereby it shipped fewer Valkyrie vehicles than planned during the fourth quarter. The company says this is only a timing issue as it already has buyers lined up, hence why the share price has not collapsed on the news.

“Nonetheless, this setback reinforces the message that Aston Martin still seems incapable of running smoothly as a business.”

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