Join the team as they discuss the tech rally, dividend super-heroes and next week's big earnings.

In today’s Podcast, the Sharesify team talk markets, this week’s absence of a Trump ‘tape bomb’ and why it’s deja vu across the pond with US tech firms driving the rally.

Ian flags the significance of US stocks trading above their long-term averages again, while Steven lends us his view on ASML (ASML), the Dutch semiconductor equipment giant which also put up a strong showing.

James explains why online electricals retailer AO World (AO.) is reaping the benefits of a ‘pivot to profit’ strategy. He also talks us through SDCL Efficiency Income’s (SEIT) decision to start a managed wind-down after shareholders rejected a plan to turn the fund into an energy services operating company. On the topic of income, James teases his website article on the investment trust ‘Super Heroes’.

The chaps preview a big week of earnings on both sides of the Atlantic, with JPMorgan Chase (JPM) and Netflix (NFLX) set to report in the US and UK retailers Tesco (TSCO) and Dunelm (DNLM) also readying their results.

Ian reckons results from at-home beauty devices group Beauty Tech (TBTG) could turn heads, but Steven is more sceptical about the technology.

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Transcript

SPEAKER_00 0:07

Hello everybody and welcome to the latest Shares of our podcast. I'm James Crux and I'm joined by my colleagues Ian Conway and Stephen Fraser. Hi chaps.

unknown 0:15

Hello.

SPEAKER_00 0:17

Now Friday lunchtime and markets are actually a bit higher than they were midweek, aren't they? So the FTSE's up about 2 and 2.6% on the week. Uh the SP is up 4.7. Anything stand out for you, Ian, in terms of markets?

SPEAKER_01 0:29

Well, James, as you say, I'm just pleased it's up. Normally we we got used to this pattern where we go up into the middle of the week and then there's some tape bomb from Trump and we end the week lower, but it hasn't happened. It's uh quite extraordinary. And what's nice is as you mentioned SP is up, NASDAQ's up, they're both back above those 200-day moving averages, which the technical guys were looking at. So happy days. I mean, admittedly, there's still time, you know. The US market hasn't opened yet, so we we don't know quite at the moment. I think futures are flat, but look, fingers crossed, we get a good week in here.

SPEAKER_02 1:06

Yeah, I mean, we've had we've had this obviously massive bump this week because of the the power of peace talks in the Middle East. Um, that doesn't seem to be going as smoothly as hoped, but so far it looks like it's it's at least promising. So of course, markets are uh are gonna be rallying this week, and and uh futures are suggesting that um Friday will be a good session for in the US as well.

SPEAKER_01 1:27

Yeah, yeah. I mean, Steve, for you, it's like deja vu. We've got Alphabet, Amazon, Broadcom, Meta, NVIDIA all up you know, on the charge this week.

SPEAKER_02 1:37

Yeah, absolutely. I mean, I just think it's it's I mean it's gonna be a risk on attitude. So anything that's associated with higher risk is gonna really bounce strongly. Um, what we're also looking forward to now as well is Q1 earnings. So I mean that's that's you know, it seems like like uh Q4 earnings only just over, and now we're back into Q1 earnings with quite a lot coming out next week. So I mean people are starting to think about okay, I'm willing to take on a bit more risk, I'm not looking to necessarily um buy safest houses investments. Um, so so that's you know, it's a good sign, it's it's a sign of more stability going forward.

SPEAKER_01 2:13

Yeah, and and we've looked into US Q1 earnings outlook, and actually, more companies are positive than at any time in the last five years, and tech is at the forefront of that. You've got over half the companies that have posted positive outlooks for Q1 are tech companies, so kind of makes sense. Energy companies also positive, but we've just had the biggest weekly loss for all futures uh since last June. So no surprise as I say we've got all the techies up in the States, Chevron and Exxon are down there, BP and Shell are down here. Um, it's a funny week, it's been a good week actually, for although hostilities seem to have ended for now. Rolls Royce has had a 10% bump. So is that on the civil side of things, then we think, Steve, maybe.

SPEAKER_02 2:58

Well, I I mean, to be honest, I I think it's just that case. We mentioned this on Wednesday. I think it's a case of you know, a rising tide is lifting all boats. Uh, specifically, uh, I mean, you know, they're they're obviously into the civil aerospace um uh area. Um, and of course, what we know is is airspace got shut down during the hostilities. Um, so getting, you know, we had tourists uh a few weeks back um in Asia and Africa, and they couldn't get home simply because of the airspace over the Middle East being closed down. So that's obviously going to be a massive boon to any kind of civil aerospace, tourism, travel, etc., etc. So, you know, more planes in the sky for longer equals good revenue for um, so that's gonna be a factor as well.

SPEAKER_01 3:41

What's um stood out to you this week, James?

SPEAKER_00 3:44

Yeah, another busy, another busy few days, isn't it? So we've had another upgrade from AO World this morning, which caught the eye. Um, sort of management's pivot to profit strategy seems to be paying off despite that tough consumer backdrop. Um, and unfortunately, we looks like we're gonna lose another investment trust with uh SDCL efficiency income that's gonna start a managed window after shareholders kind of spurned its plan to turn the fund into an operating company. Um that's been languishing on a big discount, you know, along with all these renewable funds. Um, they tried to sell investments, but that's proved really tough. And so they're you know folding the tent, as they say, and going home.

SPEAKER_01 4:20

It is a shame. I mean, I met Jonathan Maxwell a couple of times, very, you know, high conviction uh strategy he had, and it was all about energy efficiency and income, as you say. So actually, it wasn't so much kind of investing in massive solar farms and wind farms and so on. It was about the technology to reduce pollution and increase efficiency in factories, so a lot of it was operating businesses that he owned, uh, and there was a very strong income element to it as well, and it and it was trading on quite a high yield at one point, but you know, they've had, as you say, they've had to rethink that they've been selling assets for well over a year now. Uh, it's a shame that the shareholders couldn't agree the restructuring, and as you say, so it's another one exiting the market through a managed wine.

SPEAKER_02 5:10

I mean, I think the the renewable space as well is is I mean it's become much more mature, and I think you're starting to see. I mean, you know, a decade ago we had very gung-ho attitudes towards uh sustainability, and I think as the prices of wind power, um uh solar power, etc., have started to come into line with with other um uh ways of generating electricity, for example, and you're starting to see, I think, the market now, so we'll look at well, now you're equivalent. So, so what's the pros and the cons here? It's not just about saving humanity. Um, I also want to get a return. And I think it's it's harder to get a return when there's so many people in in countries who don't want massive wind farms or solar farms on their doorstep. So you get that kind of nimby aspect into it as well, which makes it tricky. So I think that there are lots of fundamental things that are coming through as the market has started to mature that um that are really affecting um the renewable space.

SPEAKER_01 6:05

Um actually, talking of income as well, James, you've just uh published the superheroes, the dividend superheroes, haven't you?

SPEAKER_00 6:12

Yeah, not an official AIC term, but one we just coined, um, crunching the numbers thanks to our friends at the AIC and looking at the best 20-year share price total return performance among those dividend heroes. And so we won't reveal the names here, but obviously that dividend hero status is a real sort of you know badge of consistency, although it doesn't tell you about the the yield and the actual dividend growth rate.

SPEAKER_02 6:33

So something to perhaps we can get that sponsored by uh Marvel or DC Comics, you know, it's the old superheroes be great, wouldn't it?

SPEAKER_01 6:42

Well, it's on the website, it's on the website of the socials, everyone, so you know where to go.

SPEAKER_00 6:47

Yeah, do take a look.

SPEAKER_01 6:49

Um, what do we got next week then, James?

SPEAKER_00 6:52

Next week, it's busy. We've got the US bank earnings, of course. Yeah, um, tell me and then yeah, in terms of UK re UK retailer, sorry, we've got uh Darnell Montesco, so we've got a good read on the UK consumer there, and some other names, including Renter Kill, and then back across the pond, we've got PepsiCo and Johnson and Johnson. So, you know, another busy week.

SPEAKER_01 7:12

Yeah, I mean we've we'd say we've published again. You know where to go, guys. Look on the website, look on the socials. We publish a look ahead for JP Morgan, Netflix and Tesco. Um, there's also, as you say, James, uh, I think we've got J and J out next week, and an interesting one I've been looking at in the UK, beauty tech group. Not because I think, you know, I think it's I'm beyond hope, but uh it's these face masks that uh give you uh UV and all these kind of really interesting tech products. Yeah, uh very impressed with their last trading update, I have to say. And talking to the company.

SPEAKER_02 7:46

I have to say, I mean, I've noticed the advertising ran very long on the social media. Um, I I I think it's worth having a look at the science behind it because I'm very skeptical that these things are actually anything more than just a gimmick. So, I mean, by all means invest in it, do your research right. But I mean, look at whether there's any scientific evidence that actually does what it says on the tin.

SPEAKER_01 8:06

Yeah, well, there's there's a real grey market for this, the at-home beauty treatment market. So I think that's a really interesting one.

SPEAKER_02 8:13

Um, something else to look out for as well that we we haven't mentioned is uh ASML, which is obviously major, uh one of the biggest tech companies in Europe. Um, and of course, it's so tied into the the the uh the chip super cycle that we're we're going through. So it'd be really interesting to see because they they they sell these massive um uh massive lithographic machines that cost millions of pounds, and ultimately they're really about is the cycle, this is the spending cycle there for the next two, three years. Um, so they give you quite a good kind of feel for how long this this kind of CapEx investment spree can can continue.

SPEAKER_01 8:51

Yeah, they are uh everybody uses ASML basically, don't they, Steve? So they've had a good week as well. They've had a good week. Stocks up 10% this week. Um well guys, I think that's about us done. Um it's been a wild week, but it's been a good one. Um, if you'd like to come on the podcast, and if you're a company, a trust, or a fund, and you'd like to get your message across to a uh switched on retail audience, drop us a line as always at editorial at shesify.com. Um, with that, we'll wish you all a good weekend.

SPEAKER_02 9:23

Yeah, take care.

SPEAKER_01 9:24

See you later.