FTSE 100 dips ahead of US jobs data, Bellway positive amid signs of life in housing market and C&C boss exits after accounting failures

“After a week of steady recovery from Monday’s sell-off, the FTSE 100 returned to the back foot on Friday, dragged lower by retail and banking stocks,” says AJ Bell Investment Director Russ Mould.

“Wall Street paused for breath last night ahead of non-farm payrolls data later and, more significantly, a meeting of the Federal Reserve next week. The Fed isn’t expected to cut rates just yet, but investors will be watching closely for any indication a move on this front is coming.

“Bitcoin made progress as flows from ETF investors helped drive the cryptocurrency price while disappointing German industrial production figures points towards continuing structural problems for Europe’s largest economy.

“Beer and cider maker C&C, the name behind brands such as Bulmers, Magners and Tennent’s, is waving goodbye to chief executive Patrick McMahon after accounting failures which have prompted significant write-offs. Given he also served as finance chief for some of the period for which the discrepancies have been identified, his exit was probably inevitable.”

Housing Market / Bellway

“Despite mixed house price data there were signs of life in the UK property market on Friday.

“Labour pledged to make a government mortgage guarantee scheme permanent if it won the general election. This would offer first-time buyers ‘freedom to buy’ but may not resolve the housing crisis as it does little for the supply side of the equation. If nothing else, it would provide another kicker to demand.

“Housebuilder Bellway is already seeing healthy appetite for its homes and says it is on course to return to growth in its financial year running to July 2025. The company referenced supportive policies from both main parties, suggesting it is relaxed about the outcome of next month’s election – even if it sees the possibility of a slowdown in activity around the date itself.

“The company and its peers will be hoping for a return to the trifecta of attractive supply and demand dynamics (likely given housebuilding volumes have dropped markedly of late), state support and cheaper mortgages.

“Investors will certainly hope for the same given a healthy period for the industry through the course of the 2010s enabled Bellway to dole out plenty of cash to shareholders.

“The Halifax house price index reading was a mixed bag – on a year-on-year view it was encouraging and came in ahead of expectations but month-on-month prices are largely static. However, after a rollercoaster ride coming out of the pandemic a steady period may be just what the market needs. There will be hope for an interest rate cut from the Bank of England sooner rather than later, too.”

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