US stocks were up slightly at 4pm today with a 1.77% climb from UnitedHealth Group helping taking the Dow to 21,450.47, up 0.19%. There was also a 1.27% gain for Johnson & Johnson. Things have livened up a bit though for Amazon’s bid for Whole Foods (more of below).
In London the FTSE 100 ended Thursday five points lower at 7,443.05. Provident Financial shares recovered slightly to 2,361p, up 4%, following yesterday's profit warning and share price sell-off. Shire shares gained 3.7%. However Morrisons shares were down 2.8% at 247.50p. Better news for oil with WTI crude rising 1.55% to $43.19.
Currency-wise, sterling dipped 0.03% to $1.2663 while the euro was also down slightly at $1.1153. Little happening, in other words, though a DUP-Conservative deal will stir the pot nicely. A year on from the Brexit vote, there is little longer-term visibility on so many fronts.
- UK FTSE 100 7,439.29 -0.11%
- Dow 21,406.22 -0.01%
- S&P 500 2,434.91 -0.06%
- Nasdaq 6,228.06 -0.09%
- Nikkei 225 20,110.51 -0.14%
- DAX 12,760.06 -0.11%
- CAC 40 5,262.31 -0.11%
- Gold 1,251.80 +0.49%
- Oil WTI 42.87 +0.80%
It’s not over for Whole Foods yet. Last week Amazon put in a bid for the health food giant, accelerating the share price of both Whole Foods and Amazon. But JP Morgan thinks there could still be a fight for Whole Foods if Wal-Mart launches a counter-bid.
“From our perspective,” says analysts Ken Goldman and Chris Horvers, “we have a hard time seeing Kroger, Costco, or Target coming in over the top. We do think there is a chance that Walmart makes a bid. There are compelling reasons for it to do so – new, generally wealthier customers – plus keeping Amazon out of the wheelhouse," they add.
Walmart’s primary opportunity is not grocery; it’s online the two contend. “Given Walmart’s 20%+ share in grocery, why should the company spend $14b-plus on what it’s already good at?”
The Brexit referendum anniversary is close – and a new study of market returns for the last year from Hargreaves Lansdown makes for grim reading for anyone invested in cash. But cheerier reading for those invested in overseas currencies, such as the US dollar or euro.
The currency effect, says Laith Khalaf, senior analyst, is also reflected "in the performance of the different strata of the UK stock market, with the big international blue chips of the FTSE 100 outperforming the more domestic midcaps. However the FTSE Small Cap index has surprisingly returned more than the FTSE 100.”
He goes on: “On the face of it this may seem like a sign of the strength of the domestic economy, however the headline small cap index is heavily populated with investment trusts, many of which invest in overseas equities.”
Stripping out the performance of these trusts leaves the small cap index lagging slightly behind the FTSE 100 since Brexit – still a strong showing.
Breaking news: Nomura claims the Bank of England will raise interest rates in August. The next Monetary Policy Committee meeting is 3 August.