Markets continue to move like a yo-yo as investors with a short-term view flip flop between inflation and interest rate concerns to corporate earnings strength.
The trading week is set to finish on a positive note as European equities moved higher and Brent crude oil eased back on Friday morning. This is a welcome development but the past few weeks and months have taught us that sentiment can switch on the smallest thing.
The FTSE 100 jumped 0.8% as investors dipped their toes back in the water with riskier assets, with miners among the key names moving the market.
Telecoms Stocks
Investors hung up on telecoms stocks after a SpaceX spectrum deal sent an electric shock down the line. SpaceX is to buy a nationwide spectrum portfolio in the US which would give its Starlink business greater capabilities in the US telecoms market.
Shares in AT&T, Verizon and T-Mobile fell on the news that Starlink is to become more of a mainstream player. Naturally, the same sentiment was felt on the other side of the pond as it gave European telecoms operators a reason to view Elon Musk’s outfit as a more serious longer-term competitive threat. Vodafone, Airtel Africa and BT were the biggest fallers on the FTSE 100.
Trainline
Investors have previously expressed concerns about how a new government initiative to bring together rail infrastructure management and streamline ticketing through a centralised ticketing app would affect Trainline.
On paper, such an initiative would go head-to-head with Trainline which has made a name for itself as a convenient way to book travel tickets. It now looks like the two operations might live in harmony.
The Office of Rail and Road has launched a consultation on a draft retail code of practice with the aim of keeping the market fair and open. In effect, it would give any market operator access to fares, products and systems, without giving the government portal any undue advantage.
Trainline’s shares jumped on the news, implying that investors are relieved at the proposal. Yet that doesn’t mean Trainline can be complacent. It is still getting a new competitor and that means it will have to work hard to differentiate its service through ease of use, simple design, and coming up with more bells and whistles to make travellers’ lives easier.
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...