The FTSE 100 Index has come under pressure in the past few months as demand for stocks waned amid the ongoing surge in UK bond yields. It dropped to 10,552 points, down from the year-to-date high of 10,986. This article looks at some of the top Footsie stocks to watch this week.
IAG stock in focus as aviation crisis emerges
International Consolidated Airlines Group stock has dropped in the past few months. It fell from a high of 493p in June to the current 415p. This retreat may continue this week because of the ongoing crisis in the Middle East, where the Houthis continue attacking Saudi Arabia’s biggest airport. As a result, the kingdom has largely suspended flights to the country.
On the positive side for IAG, it is not a major player in Saudi Arabia’s aviation industry. British Airways stopped flying to Jeddah in April as part of its wider cut to its Middle East operations. It plans to resume these flights in November after the suspension. Instead, IAG focuses mostly on the Transatlantic routes and in Europe.
The crisis, however, will likely impact its business because of jet fuel prices, which will likely rise if the issue escalates. Last week, Delta Airlines lowered its profit guidance citing the elevated fuel prices.
BT Group and Vodafone in focus amid potential Starlink competition
Top telecom stocks dropped on Friday after SpaceX acquired a low-band spectrum for its Starlink service in the US. It is buying the spectrum from Gain Management in a deal estimated at $8 billion.
The acquisition means that SpaceX is serious about being a major competitor to companies like AT&T, T-Mobile, Comcast, and Verizon.
BT Group and Vodafone stocks also dropped after the report. Vodafone slumped to 118.5p, its lowest level since September 1, while BT Group fell to 192.75, down by over 8.3% from its highest level in September.
The fear among investors is that SpaceX is using the US to lay the foundation for what it will do to other countries. A move to start a competing product in the UK would put both BT Group and Vodafone under pressure.
Barclays in focus as its American competitors publish their earnings
Barclays stock has dropped and moved into a bear market, which is defined as a 20% retreat from a local peak. It has now slipped to its lowest level since May 20th this year, mirroring the performance of other top global banks.
The decline is mostly because of the ongoing weakness in investment banking, which was caused by the relatively higher interest rates in key countries. M&A deals dropped by 41% in the third quarter to $993 billion from the previous one. It was the first quarter that the deals fell below $1 trillion.
Barclays stock will be in focus as some of its biggest competitors, including popular names like Goldman Sachs, Morgan Stanley, and Bank of America, publish their results. These results will provide hints on what Barclays will say when it releases its report on October 22nd.
In its last earnings report, Barclays said that its investment bank made a profit of 1.7 billion pounds, up from 1.3 billion in the same period last year. Its income rose to 4 billion pounds from 3.3 billion pounds last year.
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