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“The FTSE 100 was marking time on Tuesday morning as investors awaited the latest round of big corporate updates from the US,” says AJ Bell Financial Analyst Danni Hewson.
“Some big names across the Atlantic including Netflix, Johnson & Johnson and Proctor & Gamble are reporting later.
“After a period of recovery for the markets last week it feels like they are still deciding which way to break this week. UK inflation numbers tomorrow are likely to be closely watched as expectations for earlier interest rate rises build.”
Bellway
“Bellway is going for growth. Despite concern about the shape of the UK recovery there seems little sign of a buoyant housing market losing momentum yet and the company is positioning itself to take advantage.
“And despite hiking the dividend and buying up lots of plots of lands to lay the foundations for future expansion the company is still sitting on a tidy pile of cash. It also has an extremely healthy order book.
“There was some encouragement to be taken from the company’s commentary on supply chain issues with indications the soaring prices of raw materials is starting to ebb away.
“However, shortages could constrain the company’s growth ambitions at least in the short term. Bellway, based on its guidance, is expecting this to be a problem reserved to the first half of its current financial year but there is a risk that hopes for these pressures to alleviate in the second half prove forlorn.
“There is little sign at the moment that the removal of the stamp duty holiday, the more uncertain economic backdrop and cost of living crisis in the UK are having a tangible impact on the prospects for Bellway and other housebuilders. However, things could get tougher from here after what has been an impressive recovery from the pandemic.”
Moneysupermarket
“Moneysupermarket’s third quarter update was the very definition of mixed but ultimately there was enough in the statement and the company’s latest acquisition to please the market.
“The comparison site relies on people switching their insurance, banking or utilities provider for its revenue.
“The current energy crisis means there are very few attractive deals for people looking to change their heating and power supplier and the failure of smaller operators has left people loath to move anyway.
“This is a problem which isn’t going away for Moneysupermarket but the good news is it pretty heavily diversified across different sectors and there was a notable recovery in the travel insurance space after a heavily disrupted 2020.
“There were signs of the ongoing cutthroat competition in the price comparison space which had a notable impact on Moneysupermarket’s car and home insurance business.
“However, deals on credit cards and other financial products seemed to be doing the trick for this part of the business with the net result that it was almost back to its pre-pandemic levels.
“The relatively modest-sized acquisition of cashback firm Quidco could have an outsized impact on Moneysupermarket.
“Quidco adds a new string to the bow for the company and Moneysupermarket should be able to use its own considerable skills and expertise to accelerate growth.”
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