FTSE struggles for direction with US jobs figures in view, Rightmove’s dominance holds sway for now
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“The FTSE 100 had an up and down start to trading on Friday morning as investors eyed the latest US jobs report later on this afternoon,” says AJ Bell Investment Director Russ Mould.

“Investors will be hoping the index can end the week above the 6,000 mark after recently slipping below this threshold.

“Not helping sentiment was the Trump administration ban on US residents and businesses from using Chinese social media apps TikTok and WeChat."

Rightmove

“Given what has been thrown at it in the last six months, the ability of the UK housing market to bounce back is pretty remarkable.

“This was reflected in the commentary alongside first half results from property site Rightmove and the big increases in demand for sales properties in June and July.

“Whether the momentum created by this pent up demand can continue is open to question and Righmove certainly doesn’t seem sure it can, notably not paying a dividend at the half year stage.

“The company has enjoyed a tremendous run in recent years after moving early to establish a market leading position. The company enjoyed rapid growth as property listings migrated from the pages of newspapers and onto the internet.

“It benefited from a so-called ‘network effect’, because its website had the most listings, it was therefore the one which prospective property buyers would go to when looking for their next home.

“This reinforced its status as a must-have product for estate agencies and generated significant pricing power when it came to securing subscriptions.

“Rightmove’s ability to keep eking out more from agents was already facing strain ahead of the pandemic and having offered discounts at the height of lockdown, there will be much focus on its ability to return to pre-Covid pricing structures without losing a significant number of subscribers.

“The significant drop in average revenue per advertiser announced this morning was to be expected given the widespread discounting. Membership numbers fell, but not as drastically as might have been feared. For now at least it seems Rightmove’s near-90% market share is keeping agents on side.”

These articles are for information purposes only and are not a personal recommendation or advice.

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The daily market update is written by Russ Mould, AJ Bell’s Investment Director and his team. The article highlights the movement in the main index, winners and losers on the day and any macro-economic announcements.