FTSE needs a strong Friday to avoid three bad weeks in a row, Salesforce shares crash and Auto Trader revs up

“There were divergent fortunes either side of the Atlantic. The US stock market was in the red after economic data came in weaker than expected,” says Dan Coatsworth, Investment Analyst at AJ Bell.

“In the UK, the FTSE 100 perked up as the day went on and closed 0.6% ahead. While promising, the UK market is still on track to record a 1% weekly loss. At the current rate, it might be three ‘down’ weeks in a row for the FTSE 100, but that is coming off the back of three very strong ‘up’ weeks. That is not a reason to panic as markets do not move in a straight line.

“Markets tend to move in waves and currently we’re in a repositioning phase where investors are coming to terms with the prospect of interest rates staying higher for longer. While that has knocked some of the wind out of the sails, it might only take one or two positive economic data points to perk up investor sentiment once again.”

Salesforce

“Salesforce is proof that tech companies aren’t a guaranteed one-way ticket to the moon for shareholders. Its shares crashed 20% as quarterly results disappointed along with a worrying outlook, prompting analysts to downgrade their forecasts and leaving investors in panic mode.

“Previously a target for activist investors, Salesforce might have to sharpen its defences once again as the share price slump could attract another wave of institutions putting pressure on the CRM software provider, eager to offer their suggestions for how it can improve profitability.”

Auto Trader

“Auto Trader was the talk of the town among UK stocks as its shares jumped 13% after a bullish set of financial results.

“Even though the used car market remains vibrant, car sellers are having to worker harder to shift new vehicles, so they might be more willing to pay for extra bells and whistles on Auto Trader’s platform to get noticed. The gap between Auto Trader and direct competitors is vast, making it the go-to place for any retailer trying to shift a vehicle or twenty.

“What’s really interesting is the Deal Builder product which has the potential to help Auto Trader stand even taller than its rivals. Anything that helps get a sale over the line is a big win and Deal Builder does just that. Drivers can add a part-exchange, complete a finance application and reserve a vehicle, all from the comfort of their own home.

“Tests to date would suggest it’s a scorcher of a service, boosting conversion rates, cutting admin time and letting the driver do everything digitally which is increasingly the preferred channel for consumers. It’s still early days, but this has the potential to provide yet another earnings driver for the group.”

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