Nasdaq up, FTSE down: topsy-turvy day for markets with Tesla and Broadcom flying and housebuilders crying

“A topsy-turvy set of events led to divergent fortunes on the US and UK markets. The Nasdaq pushed ahead, helped by strong showings from Tesla and Broadcom. At the same time, the FTSE 100 shuddered as investors voiced disappointment at the Fed’s commentary around interest rates last night,” says Dan Coatsworth, Investment Analyst at AJ Bell.

“The prospect of Tesla investors approving a gargantuan pay deal for Elon Musk is in itself perplexing given the $56 billion amount, but for it to drive up the share price might also leave some people scratching their heads. The logical explanation is that it means Musk is no longer a flight risk, should the deal be approved. Pay him well and he’ll stay to oversee Tesla’s ongoing efforts to be crowned king of the electric vehicle sector.

“Broadcom has ‘done an Nvidia’ with its latest results knocking it out of the park and announcing a 10-for-one stock split. With a share price approaching $1,700, the average person may not have the cash to buy a single share, so doing the stock split would effectively bring the price down in the region of $170 and put it in greater reach of more investors.

“Given its leading position in the UK general election polls, one would have thought the release of Labour’s manifesto would move markets. Unfortunately, all the juicy details had already been trailed and the lack of any surprises failed to draw investors towards a particular part of the market.

“The obvious beneficiaries of Labour’s policies are companies providing products and services to the housing market, yet a shock statement from Crest Nicholson threw cold water over any celebration.

“A profit warning and dividend cut from the housebuilder spooked investors, leading to a widespread sell-off in housebuilder shares. Crest Nicholson is no stranger to issuing profit warnings, but what makes its latest one so worrying is that estate agents had recently talked up activity levels and greater confidence among prospective buyers and sellers. Crest Nicholson’s gloomy trading update would suggest otherwise.”

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