25 March 2020
Why investors need to beware that rallies do not become bear trapsTuesday’s advance in the FTSE 100 was the index’s second-best individual day in its history in percentage terms and its best in both points and actual monetary value, bringing investors some welcome relief after a month-long drubbing. However, investors will still need to tread carefully. Six of the FTSE 100’s ten single-largest percentage daily...
25 March 2020
Markets continue to rally on US stimulus and SSP goes cap in hand to investors“After the big surge yesterday there was a steadier feel to this morning’s rally for the FTSE 100 and other European markets. That may be a good thing,” says Russ Mould, Investment Director at AJ Bell.
“In more settled times gains of more than 1% for an index are considered fairly significant. The sort of advances we saw yesterday, with some major...
24 March 2020
Secure Trust Bank’s dividend cut suggests Big Five may need to followVirgin Money UK suspended dividend payments late last year thanks to a final rush of Payment Protection Insurance (PPI) compensation claims and Secure Trust Bank is now the first lender to pass its shareholder distribution thanks to concerns over the economic impact of the COVID-19 outbreak.
Russ Mould, AJ Bell Investment Director , and Kevin...
24 March 2020
Redrow becomes third builder to cut its dividend pay-out plans“ Redrow’s decision to cancel its interim dividend means the FTSE 250 firm is the third housebuilder to scale back its plans to return cash to shareholders, following Berkeley’s scaling back of its special dividends and buybacks and Crest Nicholson’s cancellation of its final dividend for 2019,” says Russ Mould, AJ Bell Investment Director.
“The...
24 March 2020
Shares rally across UK, Europe and Asia, and Redrow joins list of companies not paying dividends“Stock markets have bounced back after a series of measures and new data on coronavirus cases gave investors more confidence that the crisis can be resolved,” says Russ Mould, Investment Director at AJ Bell.
“Central banks are doing everything they can to provide support to the markets including the US Federal Reserve’s unlimited bond buying.
“The...
23 March 2020
Half a billion pounds of dividend cuts announced in one dayIt is another brutal day for income-seekers as ten more UK firms announce dividend cuts and an eleventh – Britvic – joins Next and National Express in reviewing its pay-out as part of its contingency planning.
The loss of income from today alone totals some £500 million and takes the running aggregate this year to some £1.5 billion, a big blow for...
23 March 2020
Markets still falling, no dividend cut (yet?) for Shell, and ITV hit by more setbacks“We really are in the thick of a global crisis and markets are showing little sign of optimism as the new trading week gets underway,” says Russ Mould, Investment Director at AJ Bell.
“The UK, Europe and Asian markets were nearly all in the red on Monday as investors still worry about how badly companies will be hit by the pandemic.
“The only...
20 March 2020
FTSE shows signs of life and dividend suspension becomes the big story on the markets“It is very early days and there are almost certain to be further twists and turns to come in the coronavirus crisis and its impact on markets, yet Friday’s solid early advance for the FTSE 100 was welcome, as it built on its gains yesterday,” says AJ Bell Investment Director Russ Mould.
“Notably Asian stocks broke their losing streak overnight as...
19 March 2020
Bank of England base rate cut"The Bank of England has cut its base rate to 0.1%. Once again we’re seeing central bankers using the playbook from the last financial crisis", says Kevin Doran, Chief Investment Officer at AJ Bell.
"Overnight we saw the ECB roll out the QE cannons and, now in an effort to be seen doing ‘something’, the Bank of England have waded in with an...
19 March 2020
Next reveals stress test results, and Burberry reopens shops in China“Any movement less than 2% is now considered to be a calm day for markets and that’s exactly what we are seeing on Thursday. The FTSE 100 nudged up 0.9% to 5,125, led by banks, utilities and consumer goods companies,” says Russ Mould, Investment Director at AJ Bell.
“A weaker pound versus the dollar would have also acted as a tailwind for the large...
18 March 2020
Gold keeps falling but it did the same in 2008 (and then look what happened)One of the most confusing features of the current market rout is gold’s failure to confirm its status as a haven asset during times of trouble. The precious metal is unchanged since the start of the year and is down by nearly 10% from the year high reached on 24 February when investors first began to sense that the COVID-19 was much more serious...
18 March 2020
More than £8bn assets now in suspended property fundsWith pricing uncertainty in the commercial property market, it was inevitable that funds would have to suspend. This is done to protect existing investors and stop investors who wish to sell redeeming at an artificially high price. So, while this will be hugely disconcerting for investors who are trapped in these funds, it’s important to remember...
18 March 2020
FTSE 100 hangs on above 5,000, Morrisons earns its stripes, and Restaurant Group anticipates major sales slump“Despite the significant stimulus measures being announced across the globe, markets are failing to build on yesterday’s rally in the US with Asian stocks falling overnight and European markets in the red at the open. The FTSE 100 was at least materially above the 5,000 mark early on, down 3.4%,” says AJ Bell Investment Director Russ Mould.
“Ultim...
17 March 2020
Investors start to look out for potential dividend cuts (and a four-step check list on how to spot them)The decision by both FTSE 250 member William Hill and AIM-quoted Shoe Zone to defer their dividend payments amid a downturn on trading may embolden other management teams who were considering this to take the difficult if potentially necessary decision. On paper the FTSE 100 is now offering a forward dividend yield of 6.5%, which looks like picking...
17 March 2020
The market sell-off in contextOn Thursday 12 March, the FTSE 100 index fell by over 10% – the largest single-day move since the financial crisis of 1987. It is impossible not to look at the moves and be tempted to sell, especially when your falling portfolio makes your next holiday, or even your retirement, look a little further away.
In our last video update we discussed that...
17 March 2020
Markets attempt to put on a brave face, and a dividend suspension trend could be emerging“As the UK becomes the latest country to announce stringent self-isolation measures to suppress the coronavirus, markets are attempting to put on a brave face about the outbreak,” says AJ Bell Investment Director Russ Mould.
“The FTSE 100 was up in early trading on Tuesday after a strong showing for Australian stocks. US futures also pointed to a...
16 March 2020
Why markets are fretting the Federal Reserve is running out of ammunitionThe US Federal Reserve’s unscheduled half-point interest cut rate on 3 March provoked shock rather than awe as investors took fright that the American central bank – and its global counterparts – was running low on policy tools. Now the central bank has responded by cutting rates from 1.25% to zero and launching QE4, with the purchase of $700...
16 March 2020
Markets shrug off central bank efforts and airlines face widespread grounding Federal Reserve“Cutting rates to zero and unleashing another wave of QE may seem like a shock and awe move, but it’s the playbook from a different crisis. What’s needed is a mechanism that delivers debt forbearance until such time that the economic world starts to spin on its axis again. The Fed is fighting yesterday’s war,” says Kevin Doran...
13 March 2020
Extreme volatility rocks markets“Having suffered its worst day of trading in more than 30 years the FTSE 100 at least started Friday 13th in positive territory, although a 6% rise at the open began to be whittled away as the morning progressed,” says AJ Bell Investment Director Russ Mould.
“The day was definitely still unlucky for some, cruise operator Carnival was one of the few...
12 March 2020
Capitulation time as the FTSE slumps to 2012 levels, and Tullow Oil clings on for survival“Daily market falls in excess of 2% have quickly become the norm so another day inevitably brings another big decline,” says Russ Mould, Investment Director at AJ Bell.
“Today’s early morning session saw a 6.3% decline in the FTSE 100 to 5,502 which put the index back to levels not seen since July 2012.
“Donald Trump’s restrictions on travel from...
11 March 2020
Why banking shares may not welcome emergency rate cut as much as investors think“Banking stocks are giving the Bank of England’s emergency rate cut a guarded welcome, with small gains across the board, and the biggest gains coming from those with the greatest exposure to the mortgage market as a percentage of their business, such as OneSavings Bank and Lloyds” says Russ Mould, AJ Bell Investment Director.
"The rate cut may...
11 March 2020
The stock market winners and losers from Budget 2020Looking at the array of policies and initiatives introduced today from the very narrow perspective of the stock market, investors initially seemed mildly impressed – the FTSE 100 rose by around a third of a per cent during Mr Sunak one-hour speech, although the index had already shed all of the gains made thanks to the Bank of England’s emergency...
11 March 2020
Budget 2020: Dramatic increases to JISA allowance and annual allowance taper thresholdsThe Budget brought some eye-catching announcements. Tom Selby, AJ Bell's Senior Analyst, and Laura Suter, AJ Bell's Personal Finance Analyst, pick out the key changes and discuss what they mean for you and your finances.
Significant increase in the point the pension tax annual allowance taper kicks in Pension lifetime allowance increases to £1,073...
11 March 2020
Rate cut market rally quickly losing steam“The Bank of England’s decision to cut UK interest rates to a record low 0.25% has fired up the FTSE 100 and European markets,” says Russ Mould, Investment Director at AJ Bell.
“Lower rates push more savers and investors towards equities in the search of better returns and the Bank’s actions also give businesses more support during a difficult time...
11 March 2020
Bank of England cuts interest rates“This was a swift move from the Bank of England in an attempt to support the UK economy amid the Coronavirus turmoil, but the unanimous vote to slash rates back to the lowest point in history will shock some at how quickly it happened," says AJ Bell Personal Finance Analyst, Laura Suter.
"The move, which takes rates lower than in the financial...