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“Investors continue to focus like hawks on any news relating to the US/China trade war, hoping for a resolution. Therefore comment from China’s Foreign Ministry that the two countries continue to engage in talks has given some optimism to markets, with the FTSE 100 up 0.4% to 7,210 and European stocks also moving forward,” says Russ Mould, Investment Director at AJ Bell.
“On the London market, miners and utility companies were in demand, and tech stock Micro Focus bounced back after yesterday’s profit warning.
“Next week could see more activity among equities as the summer holidays draw to a close and more people regain focus on the market."
Shoe Zone
“Expectations were very low at the start of 2019 for the retail sector following a very difficult time for the industry last year. Much to many people’s surprise numerous companies have this year come out with fairly decent trading updates including JD Sports, Dunelm and Next, suggesting that retail was still alive and well.
“Among the companies proving to be fairly resilient was Shoe Zone, helped by having some levers to pull such as securing rent reductions and closing its weaker stores. It also helped that the company sold affordable but essential products.
“To now have a profit warning from the company would suggest the retail sector is still a brutal place in which to operate. The high street is to blame for Shoe Zone’s woes with the company’s underperformance understood to be across all regions, product types, prices and brands.
“A value retailer like Shoe Zone will have to rely on high volumes of sales to make money which is a problem when footfall is weak on the high street. With the economic outlook for the UK looking gloomy, life could get even harder for the company and so it will have to do everything it can to improve brand awareness, product marketing and keep a lid on costs.”
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