Daily market update: Trump's trade policy, FTSE 100, Airbus, WH Smith, B&M

“Markets remain in a holding pattern pending an update on trade negotiations between the Trump administration and various foreign governments,” says Russ Mould, Investment Director at AJ Bell.

“All eyes are on China given it is currently the biggest loser from Trump’s new trade policy, and it looks like we’re still some way off from a deal between the two countries. Trump made comments on social media that imply China’s President Xi Jinping is a tough cookie with regards to making a deal. A potential stalemate situation means uncertainty prevails on the markets and asset prices remain volatile.

“The FTSE 100 was flat as strength in basic materials, industrials and real estate was offset by weakness in energy and consumer cyclicals.

“In France, Airbus flew higher on reports that Chinese airlines are considering a big order of aircraft.

“Rémy Cointreau suffered a hangover as its shares fell after it scrapped a 2030 sales growth target, blaming tariffs, a slow US market and general uncertainty. The flipside of abandoning this ambition is that incoming CEO Franck Marilly now has scope to create his own growth plan.”

WH Smith

“With the sale of its high street business set to complete in a matter of weeks, WH Smith’s trading update presents a picture of what the slimmed-down company looks like going forward. It’s all about convincing time-pressed travellers to pay a premium for goods on the go.

“It’s a starting point for investors to better understand the shape and potential of the business, and to get a feel for growth rates over the long term from what is essentially now a travel-hub company with a few shops in hospitals on the side. With that in mind, there is a sense that investors might be expecting more from WH Smith than it is currently delivering.

“WH Smith achieved 6.5% compound annual growth in sales between 2019 and 2024 as a broader business including the UK high street operations.

“The past quarter saw 5% sales growth from the travel-only operations, which is hardly a reason to get excited. Admittedly, that’s a short period in which to judge performance, yet it goes some way to explain why shares in the business have been lacklustre and why they trade on a low valuation.

“The US has been a laggard for the group in recent years and has some catching up to do. Overall, WH Smith needs to step up a gear and prove it was worth flogging the cash cow that was the UK arm.”

B&M

“Shrinking profits, reduced cash flow and higher net debt frame a poor year for B&M. The discount retailer blamed challenging market conditions, yet its value-led business model should have thrived in a period where consumers were watching their pennies.

“It should have mopped up extra business from people trading down from more expensive options, while also being a shop of choice for cash-strapped individuals wanting bargains.

“The imminent arrival of a new CEO cannot come soon enough. Investors will be looking for the new boss to do a thorough review of the business, work out what’s gone wrong, do a ‘kitchen sink’ job and outline a plan to get back on top. B&M is quite a big beast in the world of retail, so this might not be a quick fix.

“The lack of commentary on current trading is unhelpful, leaving investors guessing as to whether the recent sunny weather has driven an improvement in footfall and sales. However, it does allude to ongoing cost pressures, meaning the company needs to make hay while the sun shines.

“For now, it’s a waiting game until the new CEO has time to look under the bonnet and fine-tune the strategy.”

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