Tesla sales fall again, Marks and Spencer to open new stores, Fed chair says they’ll take their time

“It’s been a tough day for investors trying to keep up with the volatile political landscape and absorbing the Fed chair’s cautious stance on the rate outlook for the US.” Says Danni Hewson, AJ Bell Head of Financial Analysis.

“European markets have been subdued as relief gave way to uncertainty ahead of France’s second round vote later this week.

“And with the latest US jobs numbers coming in hotter than had been expected, Jerome Powell’s comments that they needed to take their time before changing policy will have struck home.

Tesla

“There’s nothing like the weight of expectation.

“Even if the news is pretty bad, like the second consecutive decline in sales for Tesla, the fact investors expected the numbers to be worse has given the EV giant a boost.

“Shares have rallied since the company announced a 5% fall in deliveries for the last quarter compared to last year, helping claw back much of the decline experienced since the start of 2024.

“But automakers are at a bit of crossroads, with Tesla no longer in the driving seat when it comes to an EV market deluged with cheap Chinese alternatives.

“Added to that, drivers with the finances, lifestyle and desire to make the switch probably already have.

“So how do car giants win over motorists still smarting from swingeing price rises that have scaled back their living standards, while still protecting profit margins?

“EVs need to fall in price significantly to persuade many households to make the switch, and more needs to be done to deliver the charging infrastructure that will support mass take up.

“Ultra-fast charging, like that demonstrated by UK start-up Nyobolt, could be a game changer but political will is also massively important and capitalising on the shift to green technology has been a key demand from British business lobby groups.

Retail

“It’s been a difficult day for UK retailers with shares in Sainsbury, Frasers Group, Marks and Spencer and Shoe Zone among the day’s losers.

“Whilst Sainsbury did try to strike an upbeat note in its latest update the supermarket couldn’t escape the questions being asked about the disappointing performance of its Argos business.

“Although retailers can lay much of the blame on the weatherman, a bigger issue for many stores is lack of consumer demand.

“People can’t spend what they don’t have and, even when they do have a little bit more in their pockets than they did a few months ago, they’re wary of splashing out on ‘stuff’ they don’t really need.

“Marks and Spencer is betting that it can keep its mojo working by investing in opening stores that showcase its new brand of sparkle in a way that seduces shoppers to keep spending.

“It’s tightened up its offer, closed underperforming stores and re-focussed its messaging.

“For retailers it is all about jostling for position to make sure the consumer is spending the pound they have in the store you own.”

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