Daily market update: FTSE 100, Wall Street, Deliveroo

“A weekend light on drama was just what the doctor ordered for financial markets and the FTSE 100 made a strong start on Monday to move closer to recovering all of its post-Liberation Day losses,” says AJ Bell Investment Director Russ Mould.

“Domestic focused names, including housebuilders and retailers, were among the gainers in London.

“Recent developments have been helpful from a market perspective as US President Donald Trump dialled down the rhetoric around replacing current Federal Reserve chair Jerome Powell and hinted at progress on trade talks. Suggestions of a de-escalation in the tariff stand-off with China were also well received.

“Whether the initial relief is sustained depends on Trump’s approach from here and there is still lingering uncertainty about what happens next with tariffs. The 90-day pause on most reciprocal tariffs takes us to July, so as we move into the summer, they will become a live issue once again assuming separate deals aren’t already in place. Notably futures markets are pointing to a modest sell-off on Wall Street later today.

“Later this week there are several updates which will provide significant insight into America’s economic health. They include manufacturing figures, a first reading of first-quarter US GDP, inflation and jobs figures.

“These may either dampen or revive concerns about recession in the world’s largest economy. The week is also littered with significant earnings updates from the likes of Coca-Cola, Microsoft, Amazon, Apple and McDonald’s.

“Investors are likely to be laser-focused on outlook statements to see to what extent the big shift in US trade policy is having an impact on businesses.”

Deliveroo

“The market seems sceptical that DoorDash will be successful with efforts to buy Deliveroo, judging by the relatively muted share price reaction on Monday.

“A 180p per share takeover proposal was revealed after the market close last Friday, with Deliveroo’s board saying that it would be minded to recommend a firm offer at the price. Deliveroo’s shares hovered around 170p on Monday morning, short of DoorDash’s proposed takeout price and suggesting this is not a slam dunk deal.

“There was speculation among analysts that Deliveroo could receive a rival bid, yet the share price performance doesn’t suggest that is on the cards. The share price would trade much higher than the 180p level if the market seriously thought a counterbid would happen.

“What’s interesting is how the shoe is now on the other foot regarding the leading players. Both Deliveroo and Just Eat Takeaway were seen to be among the elite of the food delivery sector, leading the charge with industry consolidation. Now they’re the ones being eyed up as takeover targets. Prosus is in the process of buying Just Eat.

“Deliveroo’s IPO went down in history as one of the worst starts to life as a public company. The ‘Flopperoo’ event saw Deliveroo’s share sink on the first day of trading in 2021 and despite a brief recovery, the shares have struggled for the majority of its time on the market.

“Existing shareholders might push for a better price from DoorDash, but the fact Deliveroo’s board were so quick to talk favourably about the approach implies the group doesn’t have fantastic prospects as a standalone entity. Being part of a bigger company might be its best bet in a market that’s lost its shine since the Covid boom.”

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