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“The FTSE 100 marked its 40th birthday with a celebration more akin to a quiet pint in an empty pub than anything more befitting of a major landmark,” says AJ Bell Investment Director Russ Mould.
“The index was flat after mixed trading in the US overnight, where tech stocks came under pressure. The so-called ‘Magnificent Seven’ accounted for a big chunk of the gains achieved by global stocks in 2023 and much will rest on their performance again in 2024.”
Entain
“Gambling outfit Entain moved higher on news the Ladbrokes owner had appointed a director from one of its four new activist shareholders.
“After the departure of CEO Jette Nygaard-Andersen in December, the company needs to find some direction. At least last year’s conclusion of a HMRC probe into a legacy business in Turkey provides the company with something of a clean slate from which to try and get earnings on an upwards trajectory.”
Supermarkets / Inflation & Central Banks
“Tesco and Sainsbury’s were lifted by Kantar data showing supermarkets had enjoyed their busiest Christmas since 2019 – though the strong showing of discounters Aldi and Lidl demonstrated once again this is an industry with razor sharp competition.
“News of the fastest drop on record in grocery price inflation could pressure revenue growth for the likes of Tesco and Sainsbury’s and will add grist to the mill on calls for the Bank of England to consider interest rate cuts.
“What may give policymakers in Threadneedle Street pause for thought is the current disruption to shipping routes in the Red Sea which could push oil prices and shipping costs higher and drive renewed inflationary pressures.
“Clues to the thinking of the US Federal Reserve may be forthcoming later as investors digest key data from across the Atlantic including a reading on job openings, manufacturing figures and minutes from the latest meeting of the Fed’s interest rate-setting Federal Open Market Committee.
“Messaging from the central bank seemed a touch confused at the end of 2023 as it initially implied rate cuts in 2024 before such talk was dampened – the publication of these minutes may provide some clarity.”
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