Daily market update: Eurocell, Jet2, Currys

“The FTSE 100 pushed ahead as bond markets calmed down and the focus shifted to US jobs data,” says AJ Bell Investment Director Russ Mould.

“Ahead of non-farm payrolls on Friday, sharply lower job openings across the Atlantic suggested a weakening in the labour market which could push the Federal Reserve to cut interest rates more aggressively.

“Markets remain twitchy however, and the pressure on Chancellor Rachel Reeves is unlikely to dissipate in any meaningful sense before she delivers her Autumn Budget in late November.

“Airlines were under pressure in London as investors reacted to Jet2’s bundle of bad news.

“After recent readings suggested some softening in the UK housing market, a warning from Eurocell, which supplies windows and doors and other building products to the building trade, suggests all may not be well in the domestic housebuilding and repair, maintenance and improvement (RMI) industries.

“The downgrade in full-year expectations reflects a weak RMI market in particular, although Eurocell offered a small morsel of positivity on the prospects of a pick-up in demand linked to new-build developments.”

Jet2

“Millions of people prioritise experiences over material goods, with foreign holidays high up the list of things they scrimp and save for. Such a trend should be positive for airlines and holiday companies, yet countless individuals are leaving it to the last minute to make a booking.

“Jet2 has once again bemoaned this situation, leaving it with cloudy rather than crystal clear earnings visibility. Management cannot keep their fingers crossed that sales will eventually come through; they need certainty given the expense in running a fleet of aircraft and a complex accommodation chain.

“Guidance that full-year earnings will be at the lower end of market forecasts has wiped out Jet2’s share price gains so far this year. It’s a disappointing setback for the business and has dragged down shares in other airlines including EasyJet and Wizz Air.

“Jet2 has a few levers it can pull in response. Seat capacity has been trimmed for the winter season, albeit still higher than last year. It is also making prices more attractive for holidaymakers to help shift the remaining holidays or plane seats still available. That could curb profit progression but help to keep the business ticking over.”

Currys

“Electronics retailer Currys continues to shine as it defies the wider gloom on the high street. It is benefiting from its position as one of the few surviving specialist retailers of electronic goods with a physical presence.

“Currys has leaned into this status, looking to provide customers with support and guidance and help them navigate a fast-changing world of consumer technology. In effect, it is providing people with limited tech expertise with something they can’t get elsewhere when they are purchasing a new TV or laptop.

“Currys aims to provide customer support through the full lifecycle of a product from purchase, credit and installation to repairs and recycling, thereby potentially generating regular revenue from the sale of a single product.

“This strategy has helped support robust trading against a difficult backdrop as the company enjoys market share gains in its UK and Nordics business and expands in the business-to-business category.

“It has also helped Currys offset the inflationary pressures associated with changes to the national living wage and employer National Insurance contributions introduced in the UK this year.

“A major bonus in its latest announcement is that the company has concluded a review of its pension scheme much earlier than anticipated and on better-than-expected terms. This is freeing up a significant amount of cash flow and has enabled the company to unveil a chunky share buyback.

“Management’s decision to hold firm in the face of a £700 million bid from US suitor Elliott 18 months ago looks more and more sound, with the company now valued by the market at more than double that sum.”