If there’s one thing investors have come to understand over the last two years, it’s that Covid has a way of turning things on their head. The announcement that Shanghai is to go back into lockdown flipped the order of FTSE 100 gainers on its head today with miners and big oil at the bottom of the pack as markets try to assess what this latest twist will mean for the global economy.
The oil price dipped significantly which gave travel stocks a nice boost on both London’s blue-chip index and the FTSE 250 got a heady boost, but the return of investor confidence in the sector might seem a little previous. Talks between Russia and Ukraine might be resuming, China’s largest lockdown since 2020 might curtail oil demand but there are no guarantees, nothing solid to really change sentiment and the best course of action at the moment seems to be to do nothing.
“Uncertainty and volatility can create opportunities to buy the dip and there was plenty of both around today with markets on both sides of the Atlantic enjoying mixed fortunes. But the big news on Wall Street came from Tesla with the company signalling a second stock split in three years,” said AJ Bell’s Russ Mould.
“It’s the third mega-cap to signal such a move this year and predictably gave the stock a nice pop. Stocks like Tesla and Amazon have grown out of reach for most retail investors and such a split creates opportunities for more people to get a piece of the action whilst rewarding existing shareholders. The move also generates excitement, creates a buzz around the company but also just the practise of investing. Glitz and glamour are no substitute for a nice set of figures, but they do make headlines.
“Back in the UK Sainsbury might have found itself making the kind of headlines it could do without after a group of activist investors stirred the cost-of-living pot. The group’s trying to push the supermarket into signing up to the Real Living Wage which is considerably higher than the legal minimum and would go a long way to helping staff navigate the current price pressures. Sainsbury’s is unlikely to be the only company to feel the heat with the group stating its intention to write to other supermarkets later this week. Investors can be a force for great change and the last couple of years has demonstrated how sensitive consumers are to ethical and social issues. But companies are having to navigate difficult waters, under pressure to keep prices down for the consumer whilst doing right by their workforce and their suppliers.”