European airlines suffer turbulent day, CrowdStrike shares fall as details of IT shutdown emerge and tech stocks see boost amid political uncertainty in the US

“It’s been a turbulent day for European airline stocks after Ryanair’s hefty profit fall and warning that the days when travellers would begrudgingly pay pretty much any price to get away have been and gone,” says AJ Bell Head of Financial Analysis Danni Hewson.

“Since the pandemic and even in the midst of a cost-of-living crunch, people have been prioritising travel as a chance to feel the warm sand between their toes or share a glass with friends and family who had been relegated to video chats for far too long.

“But in the same way some popular brands are now having to reach for discount codes to tempt shoppers to trade up again, Ryanair has informed markets that greater ‘price stimulation’ will be needed this summer – in plain language it’s pushed passengers past their limit and needs to roll back on the further price hikes it had anticipated making.

“On London markets budget airlines Wizz Air and EasyJet have been the day’s biggest losers, with British Airways owner IAG and package favourite Jet2 also feeling the squeeze.

“And if people are less willing to pay more to fly, they’re likely to be less willing to pay more to stay wherever they land. Premier Inn owner Whitbread and Holiday Inn parent InterContinental Hotels Group were both among the FTSE 100’s biggest fallers.

“The old adage that the best cure for rising prices is rising prices appears once again to have been on the money.”

CrowdStrike

“Friday’s mega IT meltdown left many businesses in a spin and there will undoubtedly be months if not years of questions to be answered about resilience and overreliance on too few providers.

“CrowdStrike’s shares have plunged more than 10% as the true extent of last week’s failed system update continues to be put into numbers.

“At times of adversity there is always opportunity and investors are scenting that in the form of competitors like SentinelOne and Palo Alto which have both enjoyed a share bounce.

“It doesn’t help the cybersecurity firm’s case that there’s still significant chaos being endured by US travellers, with Delta Airlines being singled out for criticism on social media. Headlines about grooms failing to make it to the altar don’t make for the best kind of publicity and there will be big questions about whether those impacted will be compensated as well as who exactly will be on the hook for any payouts.”

Tech Stocks / US Election

“Tech stocks have been back in favour with investors today as they adapt to the changing political landscape in the US.

“But whilst politics must be factored in it’s no substitute for cold, hard numbers and as earning season kicks up a gear those Magnificent Seven beasts of technology will be under intense scrutiny to keep on delivering.

“As long as a vacuum remains at the top of the Democratic presidential ticket it will be hard for markets to accurately price in what the next four years might look like, but it has given investors pause and pushed some to roll back on their pro-Trump plays with the small cap Russell index down considerably on last week’s highs.”

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