Trade talks update fails to excite, and Motorpoint is in the slow lane

“An update on trade talks between the US and China failed to have any major influence on global stock markets.

“A deal is expected within the next four to six weeks, although investors remain cautious as reflected by very few markets rallying on the news.

“Only Shanghai’s SSE Composite Index made notable gains, up 0.9%. Other parts of Asia saw a more muted reaction and the FTSE 100 was also little moved on Friday,” says Russ Mould, Investment Director at AJ Bell.

Motorpoint

“Motorpoint’s engine looks like it is coughing and spluttering as trading slows down in the second half of its financial year.

“The UK car market is awash with stock, giving punters the chance to pick up a bargain and giving retailers like Motorpoint a massive headache. Greater inventory levels will inevitably mean slashing prices and thus profit margins will be hit for car sellers.

“The trick for Motorpoint is to keep turning over stock even if it is being sold at a lower price. However, several analysts suggest footfall has been weaker in recent months, so too converting enquiries to actual sales. Therefore the near-term outlook isn’t great for Motorpoint’s earnings.

“While unpleasant, Motorpoint’s management will have been through plenty of good and bad times and should know how to keep the motor running.”

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