Daily market update: Wickes, Bloomsbury Publishing, Crest Nicholson

“The market seems to like the Fed’s current take on events, with Wall Street having enjoyed a decent session last night and futures prices implying more of the same today,” says Russ Mould, Investment Director at AJ Bell.

“No change to US interest rates was expected, as was a more cautious outlook with reduced growth forecasts. While no-one wants a weaker outlook, the key thing for markets is the Fed not delivering any negative surprises. Even a casual observer could have predicted the Fed’s stance on the trade war and its effects on economic activity, meaning markets were happy with what they heard.

“Central banks rely on data to support decisions and the Fed is in no rush to cut rates while the trade war is still in its infancy. Donald Trump disagreed, to no-one’s surprise. It’s no secret that he doesn’t see eye to eye with the Fed and he’d love rates to come down so that consumers and businesses can borrow more money and spend freely to give the economy some support as tariffs kick in.

“The one area where the Fed did raise a few eyebrows was Jerome Powell’s use of the word ‘transitory’ to describe expectations for tariff-driven inflation. The last time the Fed chair used that term freely was when prices started to shoot up after the Covid pandemic gripped the world. Inflation proved to be anything but transitory. It’s therefore a shock to see that term become front and centre once again.

“UK interest rates are expected to remain unchanged when the Bank of England updates at midday. As with the US, the big focus will be on what’s coming down the pipe. Uncertainty prevails and markets will be looking closely to see if the Bank is merely cautious or properly worried.

“A weaker pound served to give the FTSE 100 a boost, thanks to its plethora of dollar earners which gets a translatory benefit when the UK currency retreats.

“FTSE 100 investment trust 3i has enjoyed significant success in recent years from its largest holding, a stake in Dutch retailer Action. While the business has had an incredible run, it’s hit an obstacle in the road, causing 3i’s shares to fall sharply. There have been supply issues in some of Action’s stores following a technology change. 3i says Action has sorted out the problem, but investors didn’t like news that sales growth wasn’t as good as perhaps it might have been without the supply hiccup.”

Wickes

“Wickes is proving to be more resilient than many people thought. It’s holding up well in the face of difficult market conditions, with signs that recent progress wasn’t a one-off. Design and installation orders have seen positive growth for two quarters in a row, which is encouraging given how big-ticket spending has been volatile in an environment where consumers are watching every penny.

“Upbeat results from DFS earlier this month implied that big-ticket spending hasn’t completely evaporated and Wickes’ results echo this sentiment. A new kitchen or bathroom is not a decision made on a whim so recent momentum in this area is a major win for Wickes.

“The other big step forward for Wickes is its TradePro membership scheme which is acting like a magnet for local traders. Wickes is a value player and price is important in the current economic environment. Consumers are looking to keep project costs low which means their tradesmen will be looking for suppliers who won’t charge an arm and a leg.

“Wickes has made things as easy as possible for both consumers and tradesmen to find what they need. It might seem like common sense, but many businesses overlook the obvious.”

Bloomsbury Publishing

“Bloomsbury is a rare example of a Covid winner which has kept on winning since we emerged from the pandemic, with its latest trading update a compelling read for shareholders.

“During lockdown people rediscovered a love of learning which directly benefited the publishing outfit but it has not rested on its laurels. A combination of expansion into academic markets and identifying and snapping up new literary talent has allowed the business to consistently outpace expectations.

“Today’s statement and the latest upgrade to guidance are an indication of how well the business is performing. The acquisition of US academic publisher Rowman & Littlefield looks to be integrating smoothly.

“The deal added 40,000 academic titles to Bloomsbury’s portfolio and helped build upon the publisher’s 2030 strategy unveiled in May 2024. The robust underlying performance of the business even put it in the enviable position of paying down debt associated with Rowman & Littlefield.

“25 years ago, Bloomsbury was heavily reliant on the Harry Potter series. It now has a much more diversified portfolio. One lingering concern for investors might be the impact of the Trump administration’s policies on the academic publishing market.”

Crest Nicholson

“When a company is looking to turn around its fortunes, an improving industry backdrop can make all the difference. That’s the case with Crest Nicholson as its assessment of trading conditions is in line with the cautiously positive tone of its wider peer group.

“The housebuilder has been hit by the difficult market backdrop of the last few years as house price growth has slowed, mortgages have become more expensive and harder to obtain and build cost inflation has ramped up.

“However, it has also been a victim of problems of its own making, including around fire safety issues on some of its builds. Bellway’s decision to walk away from a deal at the eleventh-hour last August will have done little to reassure investors about the company’s prospects.

“However, it now looks like new CEO Martyn Clark, who joined the business in June last year, is getting to grips with the company’s problems. Focusing on building better quality homes and training up its sales team.”

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