FTSE 100 lower as oil sinks, Magnificent Seven in focus as US earnings hot up and Vistry sees weak private house sales

“Markets remain edgy amid the ongoing conflict in the Middle East, with the FTSE 100 pulled lower by commodity stocks,” says AJ Bell Investment Director Russ Mould.

“This followed a reverse in oil prices on reports Israel plans to delay its ground invasion of Gaza. Any sign of de-escalation would be received positively for humanitarian reasons but also by investors wary of the risks of the war in Gaza spreading to other parts of the region or bringing in other actors.

“This week the US earnings season really hots up with earnings reports from a good chunk of the ‘Magnificent Seven’ of tech stocks who, like their cinematic counterparts, have been standing tall alone against a wave of malign forces this year.

“Expect more chatter about AI but that alone may not be enough to sustain these stocks, with valuations allowing little margin for error when it comes to the hard currency of revenue and earnings. Even in-line numbers may result in raspberries from the market.

“There is also a string of economic data due out over the coming days including PMI readings from the US and Europe – providing their usual look through to current economic conditions – as well as a fresh estimate of US GDP and the latest decision from the European Central Bank on interest rates.

“An address by Federal Reserve chair Jerome Powell in Washington on Wednesday will offer some insight into the Fed’s thinking, with the current uncertainty making life extremely difficult for central bankers.”

Vistry

“Vistry has outperformed its housebuilding peers in 2023 as its acquisitions-bolstered partnerships business provided it with a more resilient revenue stream amid a pronounced housing market downturn.

“Big exposure to regeneration and affordable housing is undoubtedly a plus but today’s update reveals there are limits to the protection this can provide. The lack of a seasonal pick up in its private housing business at least demonstrates the wisdom of the decision to retrench from this market but it is still a shock to learn it is performing below even the group’s own modest expectations.

“For now, Vistry is sticking with its full-year forecasts, however there may be some nervousness in the market that today’s gloomy update is a precursor to an eventual profit warning.

“Rival housebuilders are pulled lower in the wake of Vistry’s gloomy assessment of market conditions.”

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