Daily market update: Wickes

The fact Brent crude oil held firm below $110 a barrel should be a positive for investors as it means the pressure is not getting worse for businesses and consumers.

However, the fact oil remains at an elevated level and we’re only hours away from a major interest rate decision is enough to keep financial markets on alert.

European equities were in the red, but we’re nowhere near panic stations. It helps that many companies listed in Europe are beneficiaries of the current environment where oil prices are high and interest rates are expected to go up. For example, oil producers tend to earn more, defence companies benefit from geopolitical tensions, and some mining companies can benefit when inflation is accompanied by rising commodity prices.

The Federal Reserve is widely expected to raise US interest rates, going against Donald Trump’s desire to cut the cost of borrowing. This is new Fed chair Kevin Warsh’s moment to prove the central bank’s credibility of being guided by economic data rather than what the White House wants. Failing to raise rates would make Warsh seem like he is simply caving in to whatever Trump wants, something that could tarnish public opinion of the Federal Reserve as a whole.

The 10-year US Treasury yield hit 5.03%, its highest level in 19 years, as investors digested the impact of a high oil price and the potential for multiple interest rate hikes in the near-term.

Market commentators have long argued that Treasuries hitting 5% is the trigger for an equity market correction. At this level, investors might wonder what’s the point in holding risky equities when they can get 5% on low-risk government bonds. It is a psychological level and can sometimes act as a warning sign for a market correction rather than be a guaranteed tipping point for equities to slump.

Tech stocks have been beaten up this week on fears that AI is getting too powerful. Although Donald Trump has rejected calls for greater safeguards, the idea that we might need a ‘kill switch’ for dangerous AI has provided investors with an important reminder that even the hottest of investment themes comes with risks. The debate has prompted a lot of people to reappraise their portfolios, hence why we’re seeing greater investor interest in healthcare and utilities to provide ballast to portfolios.

Wickes

A pick-up in summer trading has lifted spirits at Wickes after a sluggish first half. Profit was flat in the first six months of 2026, suggesting that DIY merchants have been feeling the pain from a lacklustre property market.

While general repair and maintenance needs should help to keep things ticking over, there is no denying that moving house is a perfect trigger to buy goods from the likes of Wickes.

That catalyst has been numb for much of the year and there is a risk it could stay that way well into 2027 given the outlook for interest rates to go up. A higher cost of borrowing affects mortgage affordability and is not good for a pick-up in housing market transactions. All this means that Wickes needs to find new ways to keep the tills ringing.

Fortunately, the summer heatwave should have encouraged existing homeowners to spend a bit of money doing up their garden, fixing broken fences, and making their home look smart.

Interestingly, Wickes says its kitchens and bathrooms-related business has been good, which might come as a surprise in an environment where consumers are being cautious with spending. A new kitchen or bathroom is precisely the type of job that people put off until another day if money is tight.