Alphabet to kick off bumper week for tech updates, McDonald’s sales down in wake of E.coli outbreak and Royal Caribbean’s positive update lifts peers

“Investors will feel like they’ve been waiting and waiting for the next bus to arrive and suddenly several will come at once and they’re likely to be full to bursting, whether it’s here in the UK where we finally get Labour’s long-awaited Budget tomorrow, or in the US where we’re going to be hit with not one, but five Magnificent Seven updates in quick succession,” says Danni Hewson, Head of Financial Analysis at AJ Bell.

“All of these events have the power to shake up markets, from changes to the fiscal rules, UK businesses being deeply concerned about the potential impact of tax rises on their ability to grow and investors being globally ready to prod earnings updates from those US behemoths for signs of consumer weakness.

“Google’s parent company Alphabet is first out of the gates tonight and revenue growth is expected to look less than stellar this time out. There are plenty of nerves that so far AI integration hasn’t exactly set the world of search engines alight.

“We might happily refer to the act of searching online as ‘Googling it’, but if competitors offer a better experience the adopted verb might begin to lose its significance. Google has got a lot to prove, and it also needs to reassure investors that the money it’s spending on enhancing its performance is actually going to the right places.”

Mcdonald's

“Shares in the golden arches’ operator bounced back after the bell despite disappointing global sales. The fast-food giant has struggled to persuade budget conscious consumers to swing by for its trademark meals, although the introduction of a $5 meal deal in the US has helped turn sales around on home soil.

“Overall sales were down by 1.5%, the biggest decline since the pandemic, with France and the UK particularly weak spots.

“McDonald’s did well when the cost-of-living crisis first struck, with many lunch grabbers looking to trade down. But competition has become ever fiercer and the options for lunch on the cheap have grown more diverse, with McDonald’s taking a bit too long to really hone its value offer. More people are also choosing to cook at home, as slapping together a sandwich can save a family quite a lot of pennies and free up cash to splurge on more enticing fare.

“The company is also having to fight back from an E.coli outbreak in the US which took its quarter pounders off the menu in a chunk of restaurants. Even though the beef has now been given the all clear, confidence will have taken a hit and the business will need a clear strategy to really reassure diners.”

Cruise Companies

“Across the board demand for travel has been a real bright spot of the year and cruise liners are among the biggest beneficiaries.

“Royal Caribbean’s update helped give stocks like London listed Carnival a nice nudge as the US company revealed consumers aren’t being put off by higher prices. The company lifted its profit forecast for the fourth time and though next quarter’s numbers will bear the brunt of Hurricane Milton’s wrath it’s clear that sea-based holidays are more in demand than ever.

“The ease of staying put whilst exploring the globe is seducing more and more holidaymakers to choose to cruise. Prices might be high but the all-inclusive nature of this kind of trip also helps with budgeting and the breadth of choice when it comes to entertainment and food make it easy to find something for even the pickiest family member to enjoy.”

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