This week so far has been pretty tough to take as investors consider what further Chinese lockdowns will do to the global economy and shudder as those key ingredients that might just bake that stagflation cake seem to be coming together. This earnings season will give real insight into how companies are coping in what’s being described as an increasingly hostile economic environment, forged by covid and exacerbated by conflict. Even the return of the political status quo in France hasn’t calmed jitters as one election battle merges into another.
Danni Hewson, AJ Bell financial analyst, said: “Coca-Cola delivered a masterclass in pricing power with its latest results beating expectations both in terms of revenue and profits. It’s been pretty fleet-of-foot when it comes to supply chain issues and has benefited from growing consumer freedoms as much of the world relaxes covid restrictions.
“But despite the fizz there was no boost to the outlook as the company carefully considers what the next few months might mean. People might have flocked back to movie theatres and ball games with a soda in hand but cost pressures are expected to take their toll on people’s ability to pay for those leisure moments and the current situation in China can’t be overlooked.”
Defensive stocks were the name of the game in London with other product giants Unilever, Reckitt Benckiser and Diageo topping the FTSE 100 even whilst UK supermarkets battle to sell off their wares at knock down prices. Both Tesco and Sainsbury’s enjoyed a little bump as investors weighed up how those two businesses stand in the increasingly competitive space.
“Rivals Asda and Morrisons have announced price cuts today as they fight to keep market share at a time when the consumer is placing value above all else. So far Tesco and Sainsbury’s seem to have been ahead of the pack with price matching campaigns that have cut through the noise, but the discounters are nibbling away, and food inflation has far from reached its peak.”
It probably says all you need to know that Twitter’s number one trending hash tag wasn’t Twitter itself but the man who seems to be about to gobble it up. After weeks of speculation, consternation and machinations, it’s reported that the board is poised to accept Elon Musk’s take it or leave it offer which does offer significantly more for investors than the current share price even though it has enjoyed another surge today.
“But does the offer represent real value for money or could the new man at the top actually follow through on his promises to make the platform more profitable? Just mere months ago this offer would have looked lacklustre, but with growth stocks struggling and rates rising this could be as good as it gets right now. But what of the user? Twitter lovers could find their 280 characters stuck behind a paywall or they could find that the push to celebrate “free speech” comes at a price not everybody is willing to pay.”