“The US stock market is on track to end the week on another positive note, extending a stellar run since autumn 2023, with both the Nasdaq and S&P 500 having hit new record highs yesterday,” says Russ Mould, Investment Director at AJ Bell.
“Futures prices imply another good day for US markets on Friday. If the S&P 500 closes the day higher than 5,088.80, it will have risen for 16 out of the past 18 weeks thanks to growing expectations for the Fed to cut interest rates in 2024, falling cash interest rates encouraging people to move back into equities, and ongoing momentum for stocks linked to artificial intelligence. Risk appetite among investors has also increased and that is evident in how bitcoin continues to push higher.
“Big name stocks like Palo Alto, Advanced Micro Devices, Salesforce, Micron Technology and Tesla have all delivered strong gains over the past week, and even market darling Nvidia has managed to push higher again which helps to support positive investor sentiment.
“The momentum seen across the pond spread to Europe at the end of the trading week, with the FTSE 100 rising 0.5% off the back of strong gains from the real estate and basic materials sectors.
“Nationwide said UK house prices had returned to year-on-year growth for the first time in 13 months. While lower mortgage rates have been enticing more people to buy and sell properties, mortgage deals have been trending higher in recent days which presents a headwind for the property market.
“It’s no surprise that Wincanton’s board has recommended a takeover bid from GXO given the 605p per share price is significantly higher than the 480p per share offered by rival bidder, Ceva. It’s rare to see such a wide gap between competing bids and suggests that GXO didn’t want to dance around with small incremental hikes above Ceva’s final bid and that Ceva might have been trying its luck by offering a low price in the first place.”
Rightmove
“Despite a strong year in terms of profit, and signs of recovery in the housing market, there are some nagging worries for property listing site Rightmove.
“Being the market leader creates a virtuous circle for the company. It has the most listings and is therefore the site which prospective property buyers are mostly likely to visit when looking for their next home.
“This reinforces its position as a must-have product for estate agencies and provides significant pricing power when it comes to securing subscriptions from agencies. That’s why the threat from OnTheMarket – now backed by a big US operator in CoStar – is such a concern for investors.
“In this context it’s no surprise there is some nervousness about Rightmove losing estate agency customers, with a warning of further losses to come. It may argue this is all about the macro backdrop, but the emerging competitive threat will certainly be in the minds of investors.
“A key driver of growth for Rightmove is increasing average revenue per advertiser – or in other words how much estate agents pay for its product and platform. A CoStar-backed OnTheMarket might make it more difficult for Rightmove to pull this lever.
“For this reason, the company really needs to ensure it continues to innovate and offer greater insights from its data to help justify extra costs for agents and upsell them to more premium packages.”
ITV
“BritBox International was always the runt of the litter when it came to streaming services, with a primary focus on classic British TV productions rather than competing against Netflix, Disney and Amazon with big name films and shows. While there is an audience for this type of content, it’s much smaller compared to the mainstream platforms.
“ITV’s decision to sell its 50% stake in the venture was inevitable as the company has been busy trying to grow its own ITVX streaming platform. It always seemed like an odd fit to be in a 50:50 venture with an arch-rival and bowing out effectively signals that BritBox wasn’t worth the effort for ITV.”
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