General Motors moves up a gear, Verizon disappoints amid weak consumer backdrop and housebuilders hit as government accepts CMA recommendations

“It’s been one of those days when good news had to be really good to make investors sit up and take notice and there was plenty of not so good news to keep markets feeling downbeat, especially over on Wall Street where recent record runs seem to have hit pause, at least for now,” says AJ Bell Head of Financial Analysis Danni Hewson.

“General Motors managed to bring the cake and the streamers to today’s rather subdued party, keeping its foot firmly on the pedal of its combustion engines.

“There are many motorists who just don’t feel they’re ready to make the transition to EVs, either because the infrastructure isn’t really in place or because the price tag still looks a little high. GM is keeping those drivers happy, and investors were clearly delighted with the earnings update as shares in the automaker were up more than 8%.

“But the EV transition hasn’t stalled, it’s just slowed, and GM will have to keep investing if it’s going to compete globally with those Chinese brands which have so far been unable to get a toehold in the US market. The question many automakers are asking at the moment is whether the regulatory environment needs to flex to allow drivers to continue to explore hybrid options or potentially other fuel sources like hydrogen.

“What’s clear is that the tech nestled not just in the engine but also in the dashboard will keep getting smarter and that’s something many motorists will be prepared to pay for if it can also be shown that it makes them and their loved ones safer on the roads.”

Verizon

“Verizon wasn’t invited to today’s party after disappointing investors with both an earnings miss and a warning that it will have to spend more on improving its network.

“Subscriber numbers were up by more than had been expected but that wasn’t enough to offset disappointment about weak consumer spend on phone upgrades or the anticipation of increased capex spend over the next year as it fights for market share.

“Technology like 5G capability is expensive but it’s also crucial as more of our lives are experienced through the devices glued to our palms.

“The right service will ultimately attract users, so Verizon has no choice but to keep investing as long as it can prove that spend will ultimately deliver where it matters for shareholders.”

Housebuilders

“On London markets housebuilders were out of favour following the government’s announcement that it would accept recommendations from the CMA to improve the quality of new builds.

“Whilst plans to streamline planning and make it easier to build the huge number of homes needed have been seen as a boon to listed companies like Barratt Redrow and Persimmon, the competition watchdog has concerns about the quality of the product being provided to consumers.

“Issues like private management fees on housing estates, so-called ‘fleeceholds’, will require further work beyond the year long investigation that’s already been carried out, according to today’s government response to the CMA’s study. A single, mandatory code should at least give would-be homeowners more confidence that the home of their dreams won’t turn into the house of their nightmares.”

These articles are for information purposes only and are not a personal recommendation or advice.