Week in Review: FTSE 100 up as G7 finance ministers tackle supply chains

FTSE news

The FTSE 100 gained on Thursday (14 October) as G7 finance ministers committed to working together to end supply chain issues. The index of the UK’s largest listed companies rose 0.9% ending the session on 7,207.71.

• On Monday (18 October), Rightmove release its monthly survey of house asking prices, a key indicator of property market sentiment.

• Nielsen publishes the most up-to-date market shares of all of the UK’s major supermarkets on Tuesday (19 October).

• The Office for National Statistics (ONS) releases the latest inflation data on Wednesday (20 October).

• HM Revenue & Customs release another key indicator of the health of the property market – transaction data – on Thursday (21 October).

• On Friday (22 October), the ONS releases monthly sales data for the UK’s retail sector.

Sector in focus

Retail is coming increasingly in the spotlight as fears about a ‘ruined’ Christmas abound thanks to the supply chain crisis.

Unlisted firms such as Bernard Matthews has warned of elevated chicken prices while toy company Hamleys has had to reassure customers it would have sufficient supplies for Christmas presents this year.

But one firm seems to be bucking the trend as it reported its latest update to the market is Dunelm (DNLM).

The online and high street furnishings retailer has maintained its winning streak with sales growth up 8.3%. on the supply chain shortages it said: “Whilst we are not immune to the challenges being widely reported, we feel well placed relatively to manage them.”

The firm expects its profits to be in line with analyst expectations, which would appear to further buck the trend as the supply chain crisis drags on.

This contrasts sharply with the firm’s rival, Ikea (also unlisted). The Swedish flat-pack furniture firm has warned it is experiencing supply chain issues, which it expects to drag on into 2022.

The problem has become severe enough at a global level that G7 finance ministers issued a joint statement agreeing to cooperate to monitor and treat problems in supply chains as pressure mounts ahead of the holiday season.

Economic update

The UK economy grew 0.4% in August – the first full month after the Government lifted the last remaining coronavirus restrictions on the economy.

Data from the ONS shows the services, accommodation and entertainment sectors all made positive contributions to economic growth in August.

However, not all parts of the economy are growing, with the construction, health and retail sectors all contracting in August.

August’s positive reading marks a turnaround from July, when the economy shrank by 0.1%.

But while the economy grew in August, it grew less than the 0.5% forecasts by analysts.

Nevertheless, it means that the economy is now just 0.8% smaller than it was before the UK went into lockdown for the first time in March 2020.

Darren Morgan, director of economic statistics at the ONS, said: "The economy picked up in August as bars, restaurants and festivals benefited from the first full month without Covid-19 restrictions in England.

"This was offset by falls in health activity with fewer people visiting GPs and less testing and tracing.

"However, later and slightly weaker data from a number of industries now mean we estimate the economy fell a little overall in July.”

ETF watch

Governments all over the world are trying to clean up their economies, resulting in a boost for firms providing clean energy. If you want to invest in this fast-growing part of the market, it’s worth considering iShares Global Clean Energy ETF USD Dist (INRG), which has an ongoing charge of 0.65% and has returned nearly 159% in five years.

Company announcements

19 October – With a strong order book and robust balance sheet, Bellway plc (BWY) is expected to report strong full-year results on Tuesday (19 October). In August, the FTSE 250-listed housebuilder was confident that higher material costs and labour shortages would not blow it off its current growth trajectory.

21 October – Barclays plc (BARC) has received the backing of analysts at Credit Suisse and Jefferies in the past two months, which bodes well for the bank ahead of its third-quarter results on Thursday (21 October). A stellar Q2 earnings announcement and £500m share buyback have gone down well with investors, with the bank’s shares leaping 22% in the past three months.