FTSE 100 lower after US and Asian weakness, retail sales sluggish in November, day of destiny for Boohoo and Frasers and Nike beats but warns of lengthy turnaround

“The FTSE 100 was sharply lower again on Friday, dragged down by water utilities and banks after uneven trading in Asia and the US overnight,” says AJ Bell Investment Director Russ Mould.

“In a sign of risk-off sentiment, cryptocurrency bitcoin slipped below the $100,000 mark.

“A marginal rise in November retail sales was not helped by the fact Black Friday fell outside of the ONS November reporting window this year. Investors in the sector will be hoping there has been a last-minute rush through December as people loosened their purse strings ahead of Christmas.

“The takeover of Royal Mail owner International Distribution Services by Czech billionaire Daniel Kretinsky moved a step closer to completion as it passed national security checks.”

Boohoo/Frasers

“After a clash of retail heavyweights to rival Usyk vs. Fury 2 in Riyadh this weekend, the day has finally arrived for Boohoo shareholders to decide if they will back the incumbent management team or vote Mike Ashley onto the board.

“It’s no secret which way major shareholder and Ashley-founded Frasers will go, after all it brought the resolutions which also call for the removal of co-founder Mahmud Kamani and the appointment of restructuring expert Mike Lennon as a director.

“However, as Boohoo has been enthusiastically amplifying, the big proxy advisers have been recommending investors vote against Frasers’ proposals.

“Boohoo is in a vulnerable position given it is trading way below the 400p-plus highs the shares attained in 2020. Ethical issues around its supply chain, balance sheet problems, a shift away from online shopping for clothes and a loss of momentum for the whole fast fashion trend have conspired to put the stock on its knees.

“For all his detractors Ashley has a lot of experience in retail and has broadly been successful, so some shareholders might welcome his input. Others may agree with Boohoo that this is an attempt to take control of the business by stealth and ultimately gobble it up.”

Nike

“Nike is trying to make investors see that its turnaround will be more of a marathon than a sprint, despite reporting better-than-expected quarterly numbers overnight.

“The market seems to have got this message given after hours trading saw a big leap before a stumble to trade roughly flat. Expectations management is important for new CEO Elliott Hill.

“Hill is suggesting there may be some painful medicine to absorb in the short term but there will be a long-term benefit as the company refocuses on sport and looks to regain customers it lost to upstarts like On and Hoka.

“The distribution strategy also needs refining after the shift to selling direct to consumer largely failed to deliver. Hill’s experience – he was a senior executive at Nike and worked at the company for more than three decades – should help as he looks to rebuild the brand’s premium credentials and cut down on promotions.”

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