Very tight trading range on the FTSE yesterday intraday which was odd considering such negative news came from Next which then affected the whole sector. Next PLC, which is down again today to 4025p fell over 10% over a worrying Christmas trading statement.
We think that this is going to be the general consensus in the retail sector as the never ending high street sales fail to capture the public’s attention. Next, once the darling of the high-street said yesterday that they were “preparing the company for tougher times” which will echo amongst many of the retailers that we are yet to hear from.
Here at Berkeley Futures, we prefer Amazon as a stock which is certainly making waves in the sector. They introduced Echo in the UK which you can now ask to order you something direct to your house, bringing shopping even closer to you than ever before. Another sneaky addition from AMZN is subscription purchasing which will make a dent, however small, to the food retailers. For example, if you want to buy razor blades, but want 1 pack a month, Amazon will kindly send it to you on the day you set up and debit you automatically without you having to do anything else.
The FTSE has been trading sideways for a few days but with a need to carry on rising into the new year. Momentum currently does feel like it is to the upside so be aware of going short right now as equities seem to be in favour at the moment with a level sitting at 7215. It is not a bad thing to be short as eventually this should come down but either have tight stops or a few hundred points in your options to play with. We have non-farm payrolls tomorrow so as we say on the desk “keep your powder dry for another day”.