Daily market update: Oracle, Primark, Zara, Apple, Novo Nordisk

“European shares pushed ahead on a busy day for corporate news,” says Russ Mould, Investment Director at AJ Bell.

“A record-breaking day for Wall Street yesterday helped to calm investor nerves over Poland shooting down Russian drones that violated its airspace. Geopolitical concerns have been front and centre for multiple years, and investors had been hoping for tensions to ease.

“Oracle shares soared amid optimism about AI-related revenue, sending a strong message to the broader market that the tech revolution is still red hot. That had a positive read-across to Nvidia which advanced 2% in pre-market trading.

“The FTSE 100 advanced 0.2% to 9,263 as financials and healthcare stocks were in demand.”

Primark (Associated British Foods) / Inditex 

“The idea that value retailers will automatically thrive in a period where consumers are watching their pennies no longer stacks up. Cheap prices do not mean goods will fly off the shelf, just as Primark has found out.

“Sales have been poor in parts of Europe amid a weaker consumer environment. While there are green shoots in the UK, even its domestic territory isn’t firing on all cylinders.

“Primark’s click and collect service is showing good momentum, but the retailer is unlikely to offer a full transactional website as the economics don’t stack up.

“In the current environment, all Primark can do is make sure its stores are tidy, there is good stock availability, and pricing remains competitive. It’s a case of sitting tight and waiting for market conditions to improve.

“Zara-owner Inditex is also navigating a challenging path. Its products are more expensive, which means the goods must sparkle to convince cautious shoppers to part with their cash. The difference between Inditex and Primark is that the former is more upbeat about current trading, explaining why its shares jumped on its update.

“Both Inditex and Primark have US operations and they’re having to contend with tariffs and unfavourable foreign exchange rates. Life is never easy as a retailer as there are so many things out of their control – be it the wrong type of weather, economic weakness or taxes. It currently feels like a perfect storm for the retail sector and management must be adept at spinning multiple plates.”

Apple

“Apple’s new product launches failed to excite investors. Shares in the company dipped last night and they’re down further in pre-market trading.  

“Thinner phones, longer lasting batteries and earbuds that offer live language translation sound like positive developments. The big unknown is whether they’re enough to convince Apple fans to upgrade their existing devices. The lacklustre market reaction would suggest they’re not.

“Apple has been under fire for its lack of innovation in recent years, only making small adjustments to existing products rather than having market-disruptive new inventions. It’s also had to contend with a weak Chinese market amid fierce competition for mobile phones from domestic operators.

“The company continues to make big money, yet there is a feeling it is simply treading water rather than making the kind of leaps and bounds that propelled the brand to global dominance a few decades ago.”

Novo Nordisk

“Novo Nordisk is paying the price for failing to beat its rival Eli Lilly in the race to have the most effective weight-loss drug on the market. Disappointing drug trials have cast a dark cloud on the business, wiping billions of dollars off its market valuation and costing CEO Lars Fruergaard Jorgensen his job.

“The company’s goal is to help people slim down, but now it’s having to slim down itself. It is cutting 9,000 jobs which is more than one tenth of its workforce, to save money and get back on track.

“It’s a classic response to a strategic setback, aiming to refocus the company on what it does best while also trimming the fat to help reduce costs. The big risk in this situation is that cuts go too far and remaining workers are stretched thin.”