Daily market update: Travis Perkins, Johnson & Johnson, Greencore

“Investors are keeping their fingers crossed that Donald Trump’s ‘Liberation Day’ is not as punishing as first feared,” says Russ Mould, Investment Director at AJ Bell.

“The sell-off on global stock markets on Monday indicated investor concern that Trump is going to be more aggressive with tariffs and cause economic turmoil around the world.

“Markets often over-react in the face of potential bad news, with investors pressing the sell button first and thinking later.

“The fact the S&P 500 ended ahead on Monday, and chunks of Asia and Europe were in positive territory on Tuesday, goes to show that investors have indeed taken time to reflect on the state of events and moved out of panic mood.

“The FTSE 100 bounced back with aplomb, rising 0.6% thanks to broad-based strength in the index. While pharma, banks and miners led the way, the fact only four FTSE 100 stocks were in negative territory in early trading suggests investors were fired up and ready to go.

“While the general mood was much better than on Monday, there are plenty of factors bubbling away which could easily sour the tone. China launching large-scale military exercises around Taiwan is something to watch closely. Any signs that China is ready to attack Taiwan would be devastating for financial markets, not only because war is always unsettling but also because Taiwan is an epicentre for semiconductor manufacturing, supplying tech and electronics companies around the world.”

Travis Perkins

“If there was any doubt about the size of the task involved in fixing Travis Perkins then it will have vanished in the wake of an ugly set of results from the builders’ merchant.

“Last year the struggling business brought in some industry big hitters in the form of Ashtead alumni Geoff Drabble as chair and ex-Taylor Wimpey boss Pete Redfern as CEO in the hope of turning around its fortunes.

“Redfern’s recent departure due to ill health has somewhat undermined these efforts but his fingerprints are likely on these results and there will have been an element of kitchen sinking the numbers to set a base from which to recover. Notably, the company has taken significant impairments in certain areas of the business.

“The statutory loss also reflects weak demand and pressure on pricing for the business and it badly needs to appoint a successor to Redfern so the transformation of the group can be continued.

“There were some signs to give the market a bit of hope. Net debt reduced significantly as improved stock management and lower capital spending took effect and the Toolstation brand in the UK is showing signs of life.”

Johnson & Johnson

“US pharma giant Johnson & Johnson’s attempt to use the bankruptcy of a small subsidiary to create a trust fund to pay women who claim they got cancer using baby powder and other products has failed for a third time.

“In effect this was a means for J&J to address these lawsuits in one place, rather than dealing with them all individually, and provide some separation for the wider group from the crisis.

“The company continues to deny that talc-based powder causes cancer but it was still prepared to pay a high price to resolve the matter and remove a cloud which has long been hanging over the business. J&J hived off its consumer health arm through the launch of Kenvue in 2023 but is still dealing with these legacy issues.

“While plaintiffs apparently voted to approve what J&J had put on the table, a judge in Houston found procedural flaws. The company now needs decide if it will appeal this decision, meaning a meaningful resolution remains elusive.

“Outside North America, J&J is already shielded from claims by the spin-off of Kenvue, with UK plaintiffs preparing their own legal action.”

Greencore

“Sandwich maker Greencore is on a roll. Its bread and butter of supplying convenience foods is going exceedingly well and profit is now set to beat previous expectations. Investors feasted on the good news, breathing life back into Greencore’s shares after a recent pullback.

“The end of the pandemic was the big turning point for Greencore. The more workers have been called back to the office, the bigger the demand for food on the go and Greencore has stepped up to the challenge. The return of the office commute has also eaten into people’s spare time and driven extra demand for ready meals, which is another part of Greencore’s output.

“Chief executive Dalton Philips has certainly repaired his reputation with the success he’s had at Greencore. Previously ousted from Morrisons for presiding over poor performance, he’s regained his mojo at Greencore and taken the business to new levels.”

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