Must read: FTSE 100, Twitter, oil, Halfords, Topps Tiles

It's another volatile session and plenty of news for investors to get their teeth into. Our head of investment analyses latest developments on global stock markets.

GLOBAL MARKETS 

European markets have opened lower after yesterday’s surge, with construction and autos leading the declines while all sectors post losses. The FTSE 100 is under pressure with Coca-Cola HBC AG (LSE:CCH) and Flutter Entertainment (LSE:FLTR) among the stocks at the bottom of the basket.

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Most Asian markets posted impressive gains, with Hong Kong’s Hang Seng surging 6% playing catch up after Tuesday’s holiday. US markets enjoyed their best two-day rally in around two years with the Nasdaq closing higher by more than 3%.

TWITTER 

Shares in Twitter Inc (NYSE:TWTR) closed higher by more than 22% after billionaire Elon Musk announced plans to proceed with his original $44 billion bid for the company. 

This is just the latest in a series of unpredictable twists and turns that kicked off in April when the Tesla Inc (NASDAQ:TSLA) CEO bought a 9% stake in Twitter. Since then, Musk made an offer for the social media platform before rescinding his acquisition, prompting a high profile and potentially lengthy legal battle after Twitter sued Musk. Perhaps Musk realised he was unlikely to win the court case, deciding it was easier to put the deal back on the table instead.

The timeline of events in recent months has solidified Musk’s reputation as unpredictable and unreliable, creating a lot of uncertainty for Twitter’s investors and employees. It is likely that if the deal goes through, Musk will take Twitter private, removing it from the public markets to avoid as intense scrutiny from the analyst community and the SEC. Analysts are upbeat on the resurrection of the deal with price target upgrades this morning from Wedbush and Citigroup.

OIL / OPEC 

OPEC+ is reportedly mulling an output cut that would amount to as much as 2 million barrels per day at its meeting today as the cartel looks to offset the recent oil market’s decline. On the one hand, the United States and other economies which have been fighting inflation and cost-of-living crises are desperate for oil prices to continue their recent declines, hoping the cartel at least sticks to its current output or possibly even pumps more. The United States in particular is keen that oil prices fall to more manageable levels ahead of the US mid-term elections. On the other hands, Saudi Arabia, Russia and other oil exporting countries are trying to steer oil prices in an upward direction to boost their crude revenues and economic growth. 

Oil prices are steady this morning after yesterday’s more than 3% surge, as the market anticipates a possible further tightening in supply from OPEC+ today. Brent crude has been trading in a downward trendline since the peak at the start of June but has regained ground off the September low, now trading back above $90 a barrel.

An increasingly pessimistic view of the outlook for global growth and expectations of a slowdown in China in particular have weighed on oil prices since the summer, prompting OPEC+ to mull a reduction in its supply to catalyse gains for oil once again.

HALFORDS

Halfords Group (LSE:HFD) has announced plans to acquire vehicle services business, Lodge Tyre for £37.2 million with a further investment of around £6 million of capital expenditure to be made over three years after the acquisition. 

It looks like there are clear synergistic opportunities with the acquisition of Lodge Tyre which offers tyres, MOTs, breakdown cover and other car and truck related services throughout the Midlands, East Anglia, North Wales and the North West. 

Halfords fared extremely well during the pandemic, with some of its stores allowed to remain open to ‘keep the UK moving.’ But since the peak in July 2021, shares have suffered heavy losses with the stock down 60% so far this year alone. It has been dealing with supply chain disruptions, a slowdown in the biking boom and weakening sales for motoring products with international travel replacing domestic holidays for many this year.

TOPPS TILES 

Topps Tiles (LSE:TPT) is forecasting full-year adjusted profits to be towards the upper end of market expectations. In its fourth quarter trading update sales grew by 4.3% year-on-year amounting to just shy of £250 million. 

This is an extension of last quarter’s positivity with encouraging sales figures once again, given e the challenging macroeconomic backdrop. The retailer has been successfully rationalising its store network this year and navigating headwinds from inflation, supply chain issues and the cost-of-living crisis. Shares in Topps Tiles have shed more than a third of their value so far this year but have recovered off the 2022 nadir.