Cookie Policy

We use cookies on our website and have placed these on your computer. By continuing to use our website you consent to this. For more information, including how to change your cookie settings and to disable our non-essential Google Analytics cookies, please refer to our Cookie Policy. If you do not wish to be reminded of this on each visit, please use the close button.

Newsround: FTSE down after political impasse

30 August 2019


Tags: Macro Economics

FTSE News  

UK stocks closed lower on Thursday (5 September) as political uncertainty and ex-dividends offset the impact of overnight gains on Asian markets. The benchmark FTSE 100 index closed 0.55%, or 40.09 points, down at 7,271.17.

Next week will be an interesting one for macroeconomic events, and it starts off on Monday (9 September) when the Office for National Statistics releases its latest data on the UK trade balance, an important indicator of how the country is doing financially. Tuesday (10 September) will show how people in the UK are doing financially with the publication of the quarterly Average Earnings Index, while on Thursday (12 September) we will find out whether the deficit between the amount the United States government is spending compared to how much it is getting in has crossed the $1trn mark.

 

Sector in focus

Housebuilders have been the focus of attention this week with two of the UK’s biggest players, Redrow (RDW) and Barratt Developments (BDEV), reporting their full year results. Both announced record pre-tax profits, but while Redrow’s shares went up, Barratt’s share price went down. As Brexit approaches and changes to the government’s Help to Buy scheme come into force, some investors fear this year could be as good as it gets for housebuilders. So for increasing growth to carry on, the real metrics the market is focusing on as a gauge for growth prospects are a firm’s average selling price (ASP) and number of houses completed. Redrow recorded a 13% rise in completions, while Barratt only recorded a 1.6% rise. In addition, Redrow’s ASP for private homes grew 2% to £389,500, while Barratt’s fell slightly to £312,000. So while on the surface both housebuilders appear to be in great health and highly profitable, the underlying picture tells a different story.

 

Economic Update

Policymakers at the European Central Bank will meet next Thursday (12 September) to debate whether or not they should cut interest rates further. Another cut could boost consumer spending in what is a weakening Eurozone economy, but there are concerns over the impact on the region’s struggling banking system.

 

Fund Watch

Looking beyond the short-term noise in the world economy, Artemis Global Select (GB00B5QKCK29), run by Simon Edelsten, looks to invest in companies across the world that are currently trading at cheaper valuations but are poised to be winners from long-term structural growth trends.

 

Company Announcements

10 September – First quarter results on Tuesday from equipment rental giant Ashtead (AHT) will provide a good insight into whether it is seeing any signs of an economic slowdown on either side of the Atlantic. The firm gets around 90% of its sales and profit from the US, via its Sunbelt subsidiary, with the rest largely coming from the UK-based A-Plant business, but its shares have moved higher this summer even as manufacturing data has softened.

12 September – Interim results from ‘big four’ supermarket Morrisons (MRW) could show the firm is coping in the face of weaker consumer confidence and concerns over potential tariffs depending on the outcome of Brexit. Morrisons has been one of the main losers from the rise of German discounters Aldi and Lidl, but it has still managed to record 14 consecutive quarters of like-for-like sales growth, excluding fuel and VAT. Investors will be hoping for more like-for-like sales growth, as well as a 6% rise in underlying pre-tax profit and a 3.5% increase in the interim dividend when it reports on Thursday.

-----

More insight

Don’t wait for a stock market crash to plan ahead

Over the past two weeks increased turbulence on global stock markets has led many market commentators to ruminate on the possibility that the decade plus long bull run will soon come to an end. So, what precautionary actions can you take?

Read more

Writer: Tom Sieber Tags: Macro Economics

You can start investing today through any of our account options:

Dealing Account

Access a wide range of global investments in this flexible, unrestricted account.

Find out more

Stocks and Shares ISA

Take advantage of tax free investing with our Stocks and Shares ISA today.

Find out more

Self-Invested Personal Pension (SIPP)

From great value to best-in-class, access the SIPP to suit your needs through our extensive network of providers.

Find out more

I've still got questions!

Our experts are on hand to help at our UK based Customer Experience Centre on 0345 0700 720

Selftrade does not provide investment advice. This article is the authors view and is not the view or opinion of Selftrade and Selftrade accepts no liability for any loss caused as a result of the use of this information. The opinions expressed are those of the author at the time of writing and should not be interpreted as investment advice.

The value of investments can fall as well as rise and any income from them is not guaranteed and you may get back less than you invested. Past performance is not a guide to future performance. We do not provide advice or make recommendations about investments. If you have any doubts about the suitability of an investment, you should seek advice from a suitably qualified professional adviser.

If you have a Stocks and Shares ISA, make sure you get the best value for your investments. We are ranked top for price on large portfolios (Platforum, 2018).

Open an account today and we’ll cover any transfer fees up to £100.*

*T&Cs apply.

Open a Stocks & Shares ISA

Find out more