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The FTSE 100 made a steady start on Friday morning as investors await a key release on US inflation.
The market is increasingly betting on an interest rate cut when the Federal Reserve meets on 10 December and mixed employment data this week has done little to dampen those expectations which, in turn, have helped drive recent gains for equities.
The Core PCE measure of inflation, out later, is one of the most closely followed by the Fed when making its decisions on rates because it excludes more volatile items like food and energy.
A higher-than-expected reading could give the Fed pause for thought about a pre-Christmas cut, while an in line or lower number would likely give markets further confidence about such a move.
Unilever
Having been put in the deep freezer thanks to the US government shutdown, Unilever is finally able to serve up the demerger of its ice cream division.
The company has confirmed The Magnum Ice Cream Company will commence trading in London, New York and Amsterdam on Monday.
This completes an important part of the company’s turnaround programme, launched in 2024 by former chief executive Hein Schumacher and continued under his successor Fernando Fernandez.
Unilever’s strategy has involved job cuts and other efficiencies as well as a focus on its so-called Power Brands which account for more than 75% of revenue. These include household names like Hellmann’s, Knorr and Domestos.
It has increased investment in brand and product marketing and continues to streamline the business by selling non-core brands and buying new ones.
The idea is that the ice cream demerger will make the group easier for investors to understand and give management the ability to focus their attention on the remaining businesses which it sees as being more complementary of each other.
Ice cream sales fluctuate with the seasons and making and storing it requires significant investment as well as unique logistics and facilities compared to most other products found in stores.
Ocado
Seven-and-a-half years after an agreement with US supermarket giant Kroger which was seen as transformative for Ocado the relationship has soured somewhat.
An enhanced compensation payment does at least take the edge off Kroger’s reduced use of Ocado’s technology, as does Ocado’s reiteration of guidance for a break into positive cash flow next year.
Having built a successful web-based delivery service for a weekly shop in the UK, Ocado’s plan to roll-out its technology with partners across the globe, effectively offering a one-stop-shop solution for online groceries, generated significant excitement, particularly during Covid.
However, that initial buzz has not been backed up to date and despite a decent advance on today’s announcement, the shares are more than 90% below the all-time highs they saw at the height of the pandemic in 2020.
While Ocado may not match the ambitions once touted for it, a more disciplined approach could still underpin a successful business.
Russ Mould: Investment Director
Russ Mould is AJ Bell's Investment Director. He has a Master's degree in Modern History from the University of Oxford and more than 30 years' experience of the capital markets.
He started out at Scottish...
