FTSE 100 takes its cue from US weakness, Moonpig higher, Ashtead posts flat second quarter after warning and On The Beach shares soar on results

“The FTSE 100 slipped at the open after weakness on Wall Street last night. The markets are a touch nervous ahead of US jobs figures this week which could either reinforce or undermine the narrative that interest rates have peaked and rate cuts are on the way,” says AJ Bell Investment Director Russ Mould.

“Signs the labour market is heating up again would put any hopes of a Santa rally into the end of the year under threat.

“Online greetings card seller Moonpig, while not exactly soaring in flight, managed to get off the ground as it posted strong first-half results and confirmed full-year guidance – suggesting it is feeling confident in the midst of one of its most important trading periods. What will encourage investors is a material increase in the number of subscribers to its Moonpig Plus services, as this could help make its revenue profile more predictable.

“Pubs group Marston's was able to toast encouraging Christmas bookings and will be hoping further industrial action on the rail network and bad weather doesn’t put these under threat. However, the company still served up a loss as it faced up to the impact of higher interest rates and lower property values.

“Barclays was under pressure in early trading after reports Qatar is planning to halve a stake built up during the financial crisis, showing it’s not just NatWest which is struggling with a share overhang in the banking sector.”

Ashtead

“Equipment rental business Ashtead has an enviable track record of earnings and dividend growth going back more than a decade and it has posted record results yet again today.

“The catch is that earnings were flat in the second quarter, underlining why the company recently moved to warn on profit. Some of the reasons for this warning – notably the writers’ strike which affected demand on film and TV sets – seemed genuinely one-off in nature but there will be concerns about how robust America’s construction and infrastructure markets are right now.

“It’s little surprise that Ashtead management felt moved to flag its core US market as being robust. The company argues growth in this area has structural and legislative underpinning, though the fate of some of the big spending programmes announced by the Biden administration may start to be cast under a shadow of doubt ahead of a US Presidential election next year.

“For now, Ashtead’s scale and know-how in a market which remains highly fragmented should be enough to help it shake off its recent woes.”

On The Beach

“Holiday seller On The Beach is making a comeback after a difficult few years. A strategic push to become bigger in the premium and long-haul beach holiday markets initially spooked investors who feared it would have to stomach considerable marketing costs to get its brand front of mind for travellers. However, the move now appears to be paying off.

“Up until six months ago, chasing the premium end of the market seemed like a no-brainer on the assumption that wealthy people wouldn’t change their spending habits despite higher inflation. But in recent months we’ve seen cracks in the luxury goods market which suggest wealthier clientele aren’t completely immune to cost-of-living pressures. Will this trickle down to the premium holiday segment? Judging by On The Beach’s outlook statement, it hasn’t happened.

“Holidays have proved resilient during the cost-of-living crisis as people are prepared to give up some of their normal day-to-day treats if it means still being able to go abroad for a week by the sea. Airlines have been talking about strong demand for some time and On The Beach’s latest results certainly suggest a favourable backdrop for the travel industry.”

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