Daily market update: Berkeley, BMW

“The FTSE 100 looked set to end the week on a positive note, supported by sterling weakness after an unexpected drop in UK GDP,” says AJ Bell Investment Director Russ Mould.

“While Wall Street entered official correction territory overnight, Asian stocks shrugged off this weakness as Chinese authorities introduced measures aimed at boosting consumer spending. This helped give the mining sector in London a lift as investors looked for a knock-on impact on metals demand in a commodity-hungry economy.

“Gold hit a fresh record high on the latest tariff moves by the US, with threatened punitive levies on alcohol from the EU. Doubts about the Ukraine-Russia peace deal added to the uncertainty.”

Berkeley

“Housebuilder Berkeley struck a cautiously positive tone in its latest trading update. It stuck to the earnings guidance given in November and noted a decent level of enquiries and an uptick in sales rates.

“However, the company wasn’t exactly ready to crack out the party poppers — it clearly sees the nascent recovery as about as fragile as a wall built without cement and needs evidence of economic stability and further rate cuts to be confident demand is solidifying.

“How Berkeley is seeing the market has historically been a pretty decent guide to wider market conditions, particularly under its late founder Tony Pidgley it had a great reputation for calling the ups and downs of the property market and adjusting its investment plans accordingly.

“Berkeley is very positive on the planning changes instituted by the Labour government but, unsurprisingly, is less keen on the new Building Safety Levy.”

BMW

“Another day and yet another update from an automotive company which has put it in reverse gear. This time it’s the turn of BMW. Like a lot of its peers, it is stuck in traffic in China where the road to customers is crowded with stronger domestic rivals.

“Tariffs are obviously unhelpful too, with an anticipated impact on margins, and the company has been hit by issues in its supply chain, as it was forced to suspend deliveries thanks to a faulty braking system supplied by Continental.

“Carmakers are finding life difficult enough without self-inflicted problems, so BMW needs to avoid making mistakes if it is to navigate challenges like the tricky transition to electric vehicles and a potential global trade war.”

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