FTSE 100 flat after Fed meeting, BT up as Slim takes stake, Tesla faces crunch vote on Musk’s pay, Crest Nicholson sees housing market momentum stall and Wise hit by weak outlook

“The FTSE 100 made a sluggish start to trading on Thursday despite gains in the US overnight as the Federal Reserve sat on its hands,” says AJ Bell Investment Director Russ Mould.

“Fed chair Jerome Powell didn’t give a huge amount away, although it felt telling that he was fairly cautious about the cooler than expected inflation figures from earlier in the day. The central bank is clear that it wants further signs inflation is on the path to the magic 2% level before it is prepared to start cutting rates. One major sticking point being the continued tight labour market conditions.

“The FTSE 100 was held back by weakness in the housebuilding sector although specialist engineering firm Halma was in demand as it delivered yet another record set of results. The company’s focus on niche areas and providing technology-enabled health, safety and environmental solutions proved to be a winning formula yet again.

“BT shares ticked higher on news Mexican billionaire Carlos Slim had snapped up a 3% stake. This could be taken as an endorsement of recently appointed chief executive Allison Kirkby’s new strategy for the group.”

Tesla

“A crunch vote on Elon Musk’s pay at Tesla’s AGM later could either provide a further catalyst for the share price to stall or remove an overhang and allow the shares to power up once more.

“Musk, no stranger to controversy, has gone on record as saying his blockbuster pay package will pass by a wide margin but there has been considerable disquiet about its size relative to the recent performance of Tesla. He also says the move to incorporate the business in Texas, linked to the renumeration issue, will get through.

“The company’s attempt to protect market share and invest in areas like automation and artificial intelligence has diluted margins and the shares have lost nearly 30% of their value since the start of 2024. Defeat could further undermine Musk’s credibility.

“Somewhat unusually ordinary investors, which make up around 30% of the shareholder register, will have a major part to play in the destiny of the vote.”

Crest Nicholson

“The housebuilding sector was supposed to be on the path to recovery but Crest Nicholson’s latest results are at odds with that narrative.

“The company says since Easter it has seen a softening of the momentum which had built up at the start of the year. The company and the wider sector will hope this relates more to short-term uncertainty around the election than the fact interest rates look set to stick at a higher level for longer than hoped.

“This has translated into volatility in the mortgage market and slowed the hoped-for reduction in borrowing costs which is such a crucial driver of demand.”

Wise

“Fintech outfit Wise, focused on global money transfers, demonstrated the truth of the old idiom that markets are inherently forward looking as despite posting a big increase in annual profit, a weak outlook caused shareholders to desert the company in droves.

“The crux of the matter is Wise expects less growth in the current financial year than it delivered in the year which ended in March. The company is planning to reduce fees in an attempt to build out its customer base.

“If Wise was trying to inject a dose of conservatism to its forecasts to help manage market expectations, the move seems to have backfired for now.”

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