Must read: latest on bond market, Jet2
ii’s head of investment rounds up the morning’s big news.
4th September 2025 09:24
by Victoria Scholar from interactive investor
GLOBAL MARKETS
The FTSE 100 has opened flat amid a mixed European open, with the DAX in the green while the CAC40 is under pressure. easyJet (LSE:EZJ) and International Consolidated Airlines Group SA (LSE:IAG) are trading near the bottom of the UK blue-chip index following a disappointing update from Jet2 Ordinary Shares (LSE:JET2).
The global sell-off at the long end of the yield curve has calmed down after a weak US JOLTS report for July, with job openings hitting a 10-month low, fuelling hopes of near-term monetary stimulus from the Federal Reserve. All eyes will be on Friday’s non-farm payrolls report, with bad news likely to be interpreted as good news as it will raise the market probability that the Fed cuts rates on 17 September. At the moment it is looking very likely that the Fed carries out a quarter-point rate cut after keeping rates unchanged at its previous five meetings.
Focus for the bond market is also on Trump’s tariff fight in the Supreme Court – bond markets are hoping for a Trump win so that the government can receive billions in import levies to help improve the state of US government finances after his major tax cuts, to build a more sustainable fiscal situation with lower debts.
US futures are pointing to a flat to modestly higher open after the S&P 500 and the Nasdaq closed in the green fuelled by gains for Alphabet Inc Class A (NASDAQ:GOOGL) after it was spared a break up.
Asian markets outside of China followed suit with the Nikkei up a sharp 1.5% driven by tech. However China markets struggled following a report from Bloomberg saying China’s financial regulators are considering curbs on stock speculation to foster steady gains.
JET2
Jet2 expects annual profit at the lower end of expectations. Full-year operating profit is expected to come in between £449 million and £496 million. Jet2 said it is operating ‘in a less certain consumer environment.’ Jet2 has reduced seats on sale from 5.8m to 5.6m in a sign of concern over future demand.
Jet2 is struggling in what it describes as a ‘difficult market’, with a weakening consumer and closer to departure bookings which has reduced visibility of earnings. While summer is typically the strongest period for travel companies, winter is generally a lot more challenging and creates a significant degree of unpredictability. The group had previously warned that the cost of living crisis could affect bookings too.
Shares in Jet2 have plunged by over 10% today, adding to the pain that its investors have already suffered lately. It has been a painful period for Jet2 investors so far in the second half of the year, and a major contrast to the outperformance enjoyed in the first half.
Shares hit a record high this year, but have been reversing course since June. This shows that airlines are generally not for the faint hearted with ferocious competition and economic pressures as continued headwinds.
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