Minimum wage chatter hits pub stocks, H&M bounces back and Carnival reports bumper cruise demand

“The S&P 500 rebounded after a few troublesome sessions despite tech giants Nvidia and Alphabet slipping back,” says AJ Bell Investment Analyst Dan Coatsworth.

“These stocks often set the tone for market sentiment – if the mega caps are doing well, investors tend to be upbeat and vice versa. However, today’s session in the US was led by a business significantly less glamorous than those offering AI chips or search engines. Mops and uniform supplier Cintas soared by more than 9% after reporting strong growth in revenue, earnings and a record high operating margin.

“The UK market held firm despite some jitters among stocks with a large workforce that could be affected by any changes to the national living wage system. A report by the Low Pay Commission suggested the adult rate should be cut to 18 which would push up costs for pub operators and retailers who often rely on younger workers. Wetherspoons shares retreated by 2%.”

H&M

“The fashion sector has been beaten up as consumers watch their pennies and opt for cheaper items from the likes of Shein and Primark. Having been one of the worst hit, H&M has now pleasantly surprised the market by beating first quarter operating profit forecasts, sending its shares higher. A staple of shopping centres in various parts of the world, H&M’s positive quarter might silence critics who say the company has lost its way.

“A well-received spring collection is a good start, but H&M will need to continue to achieve positive momentum to prove it still has a place in the upper echelons of the retail sector.

“It’s treading a thin line as on one hand it is still addicted to discounting to shift goods and on the other it is targeting a different demographic to the one that’s frequented its stores historically by selling more expensive clothes. This feels more like it is throwing darts at a board of random ideas than a focused strategy.”

Carnival

“It was a record first quarter for Carnival as more people opted to holiday at sea. Consumers have been clamouring to book cruises and they are paying more for cabins than last year. That supported a bullish outlook statement from the company.

“Carnival flagged a potential $10 million hit from the Baltimore bridge collapse which has forced the company to change its homeport. That amount seemed relatively minor in the bigger scheme of things and the initial dip in its share price didn’t last long, with the stock moving higher as the day went on.”

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