Daily market update: Croda, THG, Tesla, Reckitt

“European markets including the UK enjoyed a solid bounce following yesterday’s strong rally on Wall Street,” says Russ Mould, Investment Director at AJ Bell.

“There are several reasons why markets have moved higher. Yesterday, Treasury Secretary Scott Bessent said the trade war between the US and China was unsustainable, with Donald Trump suggesting a deal would be reached between the two countries.

“Trump also said he doesn’t intend to fire US Federal Reserve chair Jay Powell which has calmed nerves. Previous speculation that Powell might be given the boot caused markets to wobble in the US at the start of the week.

“These comments have given markets a sense of optimism that recent chaos might have peaked and we’re heading towards calmer waters. It almost suggests that someone has taken Trump to one side and told him it’s time to be more responsible with his words and actions.

“Chemicals group Croda was the top FTSE 100 riser following an upbeat trading update. It is on the road to recovery and has a plan to cover any tariff-related incremental costs by applying a surcharge. Croda has been royally out of favour for so long with the market that the confident tone in its latest update is a pleasant surprise. It might be the catalyst to make investors reappraise the company following four years of share price declines.”

THG

“THG boss Matt Moulding always made out there was hidden value in the business and no-one listened… until now. An approach from Selkirk to buy THG’s Myprotein business for up to £600 million puts down a marker for what the division is worth, and it’s more than the value of the entire group as of last night.

“For all the drama around THG since it’s been a listed business, it does deserve credit for building up Myprotein into one of the leading brands in the fitness and wellness world.

“There is a big craze, particularly among young people, to hit the gym and have a protein-heavy diet. Protein products are everywhere but Myprotein has done a good job at standing out from the crowd. That’s partly down to THG’s marketing tactics, always offering deals on Myprotein products via its direct-to-consumer operations and that’s helped to build up a loyal fanbase.

“This success has paved the way for Myprotein’s products to be stocked in supermarkets and that has further widened the net for reaching existing and potential customers. It’s exactly the type of business that would appeal to an outfit looking to capitalise on a hot trend. While THG has rejected Selkirk’s approach, this might have fired the starting gun for other interested parties to think about making a move.”

Tesla

“Investors have welcomed the news that Elon Musk will be cutting back his role as adviser to the White House on government efficiency.

“While Musk will still keep his foot in the door, the fact he intends to spend fewer hours with the Trump administration should mean more time to help fix Tesla’s problems. His to-do list is getting longer by the day and that was evident from a poor set of first-quarter results from Tesla and the challenges ahead linked to tariffs and potential supply chain disruption.

“Tesla’s shares barely moved in after-market trading immediately after its results last night, but they spiked later on during the conference call when Musk revealed his intentions to dial down DOGE involvement. It’s effectively the start of a journey for Musk to begin regaining the market’s trust, having become an enemy to many people because of his political involvement.”

*Read more in AJ Bell’s initial reaction to Tesla’s results which was first published immediately after the figures came out on 22 April.

Reckitt

“Reckitt’s first quarter numbers offered evidence that the US consumer is feeling less than healthy as first-quarter numbers missed expectations.

“While the company is sticking with its full-year guidance, investors may prove sceptical of its ability to deliver, given household spending in one of its largest markets was already under pressure even before the impact of the current US trade policy had been felt.

“In Europe, sales declined even more than they did across the Atlantic and while tariffs may not have a huge direct impact on the business in terms of costs and its supply chain, indirectly it is still a headwind given the uncertainty it has created.

“The risk for Reckitt is people trade down to less expensive supermarket own-label products and it makes sense in this context that the group is prioritising its strongest brands. The robust performance of its Core Reckitt portfolio – particularly compared with the Essential Home basket which it is looking to offload in 2025 – suggests it has got the focus right.

“Shareholders would be glad to see the back of its Mead Johnson infant formula business – a major acquisition from the late 2010s which has proved nothing short of a disaster. No timeframe has been set for its sale and the ability to achieve an exit for this business and its Essential Home cleaning products arm could be affected by the current market volatility.

“It is no surprise that most of the company’s growth came from emerging markets – where the threat posed by unbranded alternatives is less and where, for reasons of quality and safety, shoppers will stick with familiar names where possible.”

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