FTSE 100 nudges ahead, Bellway in sticky patch, Rolls-Royce cuts jobs, Frasers target German expansion, Moneysupermarket riding high and Shoe Zone still in sweet spot

“The FTSE 100 managed to nudge ahead 0.4% to 7,661 as investors showed signs of increased risk appetite, buying into stocks that have been weak in recent sessions. This includes Ocado and Howden Joinery,” says Russ Mould, Investment Director at AJ Bell.

“Helping to give UK stocks a boost were the latest figures on jobs with a slowdown in wage growth. That in theory reduces the chances of the Bank of England rushing to put up interest rates again.

“The positive sentiment didn’t extend across all of the continent as a third quarter miss from Ericsson was a sore spot.”

Bellway

“It’s a miserable time to be a housebuilder despite operating in a country with a chronic housing shortage. Bellway has seen a sharp decline in the number of new home reservations and that has led it to guide for lower volume output in its current financial year.

“Selling prices haven’t fallen off a cliff which is reassuring for the company. However, it is at the mercy of the mortgage market and the ability for aspiring homeowners to be able to afford a loan at the current elevated interest rates.”

Rolls-Royce

“We’ve seen the classic ‘share price moves higher on job cuts’ movement on Rolls-Royce’s restructuring efforts.

“While not good news for people working for the engineer, cutting jobs means saving money in the future, hence why the market has given it the thumbs-up.

“Reducing the workforce by 6% is a bold move and the challenge is not to sacrifice quality in the quest to save a few quid.”

Frasers

“Frasers has found a formula that works in the UK and now it is trying to repeat this strategy overseas.

“Its considerable buying power puts the group in good stead with the major sports brands who want their products to reach as many people as possible, and that bodes well for its expansion in Germany through the acquisition of SportScheck.

“Expect to see money spent on sprucing up the acquired stores, better online capabilities and deals with the big sports names to get their best products on the shelves. A better shopping experience could lead to more repeat purchases and therefore more money for the new owner.

“Frasers’ ‘Elevation Strategy’ is all about attracting more high-profile brands to its stores. So perhaps it sees an opportunity to use SportScheck as a channel for introducing more premium athleisure products as well as driving up sales volumes.”

Moneysupermarket

“Moneysupermarket continues to enjoy tailwinds from consumers looking to get a better deal on insurance products.

“With drivers getting punishing price hikes in their annual renewal letters, it’s no wonder they are looking elsewhere for cheaper deals. A similar trend is seen among home insurance policies.

“Moneysupermarket is one of the best-known comparison sites in the UK and it is raking it in from product sales commissions, hence the positive share price reaction to the latest trading update.”

Shoe Zone

“Shoe Zone has proved to be one of the few beneficiaries of the cost-of-living crisis and it is still in a sweet spot.

“Despite operating from fewer stores, sales, margins and profits are all going up. Everyone needs footwear but not everyone can afford to shop wherever they like. That’s why Shoe Zone has done well, thanks to its low-price points and value for money products.”

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