The FTSE 100 recovered some ground on Thursday (30 May) closing up 0.5% at 7,218.16 but was still on course for a tough May, having opened the month above the 7,400 mark. Stock markets around the world have been hit by renewed fears over a trade war between the US and China.
Next Monday (3 June) there is purchasing managers’ index (PMI) data out for the manufacturing sectors in both the UK and the US. Investors may be looking for any sign of Brexit, in the UK’s case, and trade tensions with China, for the US, having any impact. These announcements are followed by PMI releases on the UK construction and services sectors next Tuesday (4 June) and Wednesday (5 June) respectively. Next Thursday (6 June) the European Central Bank will deliver its latest monetary policy decision for the Eurozone. Finally, Friday (7 June) sees the departure of UK Prime Minister Theresa May and the influential US non-farm payrolls release.
Some weak industry data put supermarket stocks Morrisons (MRW), Sainsbury’s (SBRY) and Tesco (TSCO) under pressure this week. Grocery sales for the 12 weeks to 19 May grew by just 1.3% according to analysis from Kantar. That compares with growth of 2% in the previous 12-week period to 21 April and suggests a major slowdown this month. Sales last May were boosted by record temperatures, boosting demand for ice cream, beer and sun-tan lotion, and by the royal wedding celebrations. This year more moderate weather and a lack of major events has tempered some of that extra spending. Sales at Sainsbury's were down 1.7% in the latest 12-week period, marking the eighth month in a row that the 150-year-old retailer has posted negative growth. Sales at Morrisons were down 0.4% while market leader Tesco managed to keep sales flat compared with the same period a year ago. The big gainers, as usual, were the hard discounters Aldi and Lidl, whose sales grew by 11.1% and 8.5% respectively due to their aggressive store-opening campaigns. In terms of market share, the metric most closely watched by analysts, Tesco’s 27.3% share in the 12 weeks to 19 May was down 0.4% compared with the same period last year while Sainsbury’s 15.2% share was down 0.5% on last year.
The next big development to watch in the Brexit saga is likely to be the Conservative leadership election, a process which will get underway after May steps down as party leader next Friday (7 June) and is expected to conclude by mid-July after first MPs and then Conservative Party members have had their say.
Absolute return funds are designed to provide a positive return over rolling 12-month periods in all market conditions, although this is never guaranteed. Examples include BlackRock UK Absolute Alpha (GB00B5ZNQ990) and Schroder UK Dynamic Absolute Return (GB00B3N53472).
Exchange-traded fund iShares S&P 500 Consumer Staples Sector ETF (ISCU) provides diverse exposure to US-listed companies, many of which do business around the world.
It is tracking an index that includes well-known names in the consumer staples category such as Procter & Gamble, Coca-Cola, Walmart and Colgate-Palmolive.
4 June – Online white goods retailer AO World has been struggling recently. The company, which surprised the market with the return of founder John Roberts as chief executive in January, said in April that its year to 31 March 2019 performance is expected to ‘fall within the range of current market forecasts’. But the market seemed to think this was coded language designed to soften investors up for more disappointment, these results will reveal to what extent that is the case.
6 June – Car listings website Auto Trader (AUTO) has demonstrated its ability to continue growing earnings by squeezing more out of the retailers which buy its subscription products. Investors will be looking for further evidence of this trend when it reports full year results. The company is preparing for a change of chief executive at the end of financial year with Trevor Mather handing over to current finance chief Nathan Coe.
Narendra Modi and the BJP look set for victory in what has been a gargantuan undertaking for India and stock markets have surged to record highs on early results.
Access a wide range of global investments in this flexible, unrestricted account.
Take advantage of tax free investing with our Stocks and Shares ISA today.
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.