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: Tariff threat brings FTSE down

01 June 2018

Tags: Macro Economics

FTSE News 

The FTSE 100 fell flat on Thursday amid news that US tariffs will be applied on aluminium and steel imports from the European Union, Canada and Mexico. The index was more or less unchanged at 7,678.20 by the close.

Next Monday (4 June) purchasing managers’ index (PMI) data for the UK construction sector is published. The market will be looking to see if the reading can build on the better than expected 52.5 posted for April. Any number above 50 implies growth while anything below this threshold suggests contraction. On Tuesday (5 June) the PMI number for the UK services sector is out. Next Wednesday (6 June) weekly US crude oil inventories figures are released. Oil has given back some of its recent gains amid speculation Russia and Saudi Arabia are poised to lift their production. Next Thursday (7 June) Italian retail sales data will offer some insight into a troubled economy (see Economic update).


Sector in focus   

The transportation sector was under the spotlight this week. FTSE 250 buses and trains operator FirstGroup (FGP) was the biggest faller on the FTSE All-Share index on Thursday (31 May). The share price crashed more than 14% lower to 95.15p after it revealed a swing to a full year loss, prompts its chief executive officer (CEO) to resign. CEO Tim O’Toole had run the operator of the Great Western and South Western railway franchises for the past seven and a half years. But his position appears to have become untenable after FirstGroup reported pre-tax losses of £326.9 million for the year to 31 March 2018. The group had posted a £152.6 million pre-tax profit in the 12 months previously.

Current chairman Wolfhart Hauser has become executive chairman until a successor is found. The weak performance is likely to have many investors wondering why FirstGroup was so quick to rebuff takeover interest last month. In April the company rejected an approach from US private equity firm Apollo. Earlier this week Stobart (STOB), which operates Southend airport, saw its stockbroker Cenkos resign due to a long-standing relationship with former chief executive Andrew Tinkler. Tinkler, with the support of investors whose number reportedly includes Neil Woodford, is aiming to oust chairman Iain Ferguson.


Economic Update 

The market may have felt it had cleared the major political threats facing Europe in 2017 when the result of German and, in particular, French elections helped restore some confidence to the European project. However, the issue of Italy has returned to haunt investors and with it the renewed threat of a break-up of the eurozone. The turmoil in Italy, where efforts by populist parties to form a coalition government have collapsed, raises the spectre of a repeat election which could be fought on an anti-EU, anti-EU platform and ultimately become a referendum on membership of the euro. Italian retail sales out next Thursday (7 June) will be released against this backdrop.


ETF Watch 

You can gain exposure to mid-cap stocks on the FTSE 250 through exchange-traded funds. One such product is Vanguard UK FTSE 250 (VMID) which has an ongoing charge of 0.1%.

Trade now


 Company Announcements

5 June – Online white goods retailer AO World (AO.) will reveal the impact of a pressured consumer market when it posts its results for the year to 31 March. The company faces strong competition in the electricals space. In April the company said its results would fall ‘within the range of current market forecasts’. Such coded language can often imply a performance towards the lower end of a forecast range.

7 June – Vehicle listings website Auto Trader (AUTO) is likely to provide guidance on performance in the 2019 financial year when it posts its numbers for the 12 months to 31 March. The company revealed in March that used car stock for the current financial year could be flat or even down. Auto Trader is reliant on the used car market (around 85% of the stock on its website).

We’ve team up with Stockomendation to bring you the latest investment information at your fingertips!

Find out some FREE investment tips from some of the UK’s leading tipsters and brokers

Find out more


Looking for some independent researched Exchange Traded Funds?

Our Select List of 100 best-in-class ETFs is here

Take me to ETF Select 100

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!

We’re on hand to help at our 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