A look at the markets in April, from Graham Spooner.
Month in the Markets
Stock markets in April have for the most part trended higher, with the FTSE 100 gaining by around 6%. The move higher was helped by the fall in sterling to a 3-month low against the dollar of 1.38.
On the corporate front US money continues to be attracted to UK quoted companies especially activist investors who have taken stakes in Barclays, Whitbread (where there the group announced a splitting of the business with the demerger of Costa), Hammerson, Wincanton and Micro Focus along with the unquoted Waterstones. Companies where take-over rumours have circulated include; Inmarsat, Virgin Money, Smith & Nephew and Dunelm. The sudden departure of WPP’s high profile CEO Sir Martin Sorrell has also led to some early speculation about the group, which has underperformed the market over the last 12 months, being broken up or parts being sold off.
The US reporting season has focused much attention especially amongst followers of its leading banks, results across the pond were expected to be good and for the most part were. UK companies have and will be updating the market on their performance mostly over the first quarter.
As is always the case not everything had a good month, with bookmakers being hit towards the months end over speculation that the maximum stake allowed on machines in their shops will be cut in May to £2. This would be regarded as a worst case scenario for the sector. There was also a thought that betting duties may rise as a result of Chancellor Philip Hammond needing to replenish lost revenue.
Unfortunately one of our favoured companies, Clarkson, a provider of integrated shipping services, came out with a profit warning, leading to a 20% fall in the share price. This followed on from an upbeat trading statement in March. Although many investors might not be aware of the company it is regarded as being an indicator of the health of the global economy.
The sun made a brief appearance, leading to record April temperatures and as a result of Mohamed Salah appears to still be glowing red over Liverpool, let us hope the markets can approach the summer months with confidence, as I don’t want to be talking about sell in May and go away next time.
All information given including prices, yields and our opinion is correct at the time of publication. Our opinions on investments can change at any time and for our latest view please go to www.share.com. To understand how our Investment research team arrive at their views please read our Investment Research Policy.