This article was written in early November for the December edition of our print publication. Therefore, figures concerning market performance in 2019 may be out of date.
Travel and leisure is an intriguing sector at the moment. On the one hand it has obvious attractions (we tend to go on holiday whatever the economic weather), yet it’s one that’s being buffeted by global economic concerns.
As defined by the London Stock Exchange (we are limiting the scope of this article to the FTSE 100 index), the sector comprises six firms, the details of which are highlighted below and in the Tape table.
The UK stock market is “on sale” and could enjoy a bounce if the Conservative Party win a majority at the upcoming general election, argues Mark Slater, manager of the Slater Income, Slater Growth and Slater Recovery funds.
For the past three years, readers of the financial press will have heard countless times that the UK stock market is ‘cheap’. Investors fearing the worst outcome from Brexit, as well as the potential of a Labour government coming to power, have turned their backs on UK shares, pushing the market to supposedly attractive valuations for the more contrarian-minded. This is certainly the view of Richard Staveley, a fund manager at Gresham House Strategies.
Many football fans of a certain age will remember the ‘knee-trembling’ experience of heading down to the Old Den, Millwall’s former football ground. My first experience there was shortly before they closed it down to move to the slightly less terrifying New Den to watch my team, Watford, suffer a characteristic hammering in February 1993. Walking up the suitably named Cold Blow Lane to the away end, and hearing the famous “No one likes us, we don’t care” from the Millwall faithful, will last long in the memory. The football was less memorable.
UK companies posted their weakest set of results in three years in the second quarter of 2019, according to the latest Profit Watch UK from The Share Centre.
The market as a whole recorded profit growth of 1.6%, but more than half of UK companies nonetheless reported lower profits.
This year started with the bull market that began in 2009 still going strong. While there was no lack of voices raising concerns about valuations looking pricey, particularly in the US market, other commentators pointed to parts of the world that were supposedly on the up. However, for a while in 2018 the reverse appeared to be true.
A new policy floated by the Labour party could see British companies with more than 250 workers forced to hand over 10 per cent of their equity to staff.
The Consumer Price Index (CPI) measure of inflation rose by 2.7 per cent year on year in August, up from 2.5 per cent in July. The alternative CPIH, which includes housing costs, rose from 2.3 per cent to 2.4 per cent, the latest data from the Office for National Statistics (ONS) show.
The rise in prices means that there are nearly no savings accounts that beat inflation. This means that the value of almost all savings languishing in savings accounts are being slowly eroded.
By all accounts, business investment should be booming. Profit margins are above long-run averages and credit, thanks to loose monetary policy, is still cheap. The labour market has tightened and government policies such as the National Living Wage and pension auto-enrolment have upped the cost of labour. At the same time, many firms are at or near capacity after nine years of economic expansion.