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“Tech stocks are back on everyone’s Christmas list following a sharp rally on Wall Street last night. The Nasdaq index jumped nearly 3% with considerable excitement about Apple, sending its share price up 6% ahead of a product launch event on Tuesday,” says Russ Mould, Investment Director at AJ Bell.
“Tech stocks saw a lacklustre September, leading many investors to question if this year’s winning trade had run out of steam. The answer appears to be not judging by October’s big rebound.
“At 11,876, the Nasdaq is now up more than 6% in less than a fortnight and is fast closing in on the 12,056 all-time high for the market close set on 2 September this year.
“Sadly, the euphoria did not extend to the UK where the FTSE 100 fell 0.3% to 5,982 on Tuesday with banks, miners, pharmaceuticals and consumer goods stocks weighing on the index.
“Appetite for UK stocks continues to be mixed as investors fret over how the Brexit trade talks might play out and how the economy might suffer next year.
“Yet there were a few bright spots on the market including car seller Marshall Motors which rallied 12% after strong trading prompted the company to reassess its earnings expectations. Having previously guided for break-even this year, it now expects £15 million underlying pre-tax profit.
“Utility group SSE advanced 3% after striking a deal to sell its 50% share of an energy from waste venture for nearly £1 billion. The business is now a lot closer to hitting its target of £2 billion worth of disposals by autumn 2021, with just over £1.4bn now delivered.”
Boohoo
“Just when people thought Boohoo had turned a corner following its Leicester supplier scandal, along comes another setback. Reports that Boohoo used clothing manufacturers allegedly involved in money laundering and VAT fraud will put even more pressure on the business to improve its governance standards.
“Boohoo cannot afford to be associated with any more wrongdoing as its reputation has already been damaged by a series of incidents ranging from excessive bonus schemes for directors and poor conditions for factories used to make its clothes.
“We live in an era where environmental, social and governance issues are front and centre, and of upmost importance to people whether they are an investor or a customer. It’s one thing after another with Boohoo and now is the time for the company to show it can change, rather than simply making promises to pull up its socks.”
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