Must read: UK banks, Aussie rates, oil, Haleon

Our head of investment rounds up the morning's big news.

GLOBAL MARKETS

European markets have opened mixed with the FTSE 100 hovering around the flatline. However, Sainsbury (J) (LSE:SBRY)’s is trading at the bottom of the UK index even though the supermarket said food inflation was beginning to ease. 

UK bank bosses will meet with the Financial Conduct Authority on Thursday to discuss concerns that higher interest rates aren’t being passed onto savers while mortgage rates have risen sharply. 

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Overnight in Australia, the Reserve Bank of Australia (RBA) kept its official cash rate at 4.1% and said inflation is ‘passed its peak’. Analysts were divided over whether the central bank would hold or hike again. RBA governor Philip Lowe however said ‘some further tightening of monetary policy may be required’, echoing the message heard from the US Federal Reserve. 

With US markets closed for the 4th July holiday, it is expected to be a quieter-than-normal day of trading, with the potential for wider swings on lower volumes. Meta Platforms Inc Class A (NASDAQ:META) is expected to launch a platform to rival Twitter on Thursday called Threads, which will be linked to Instagram. Facebook’s parent company said it will be a ‘text based conversation app’.

Oil prices are trading higher having closed lower by around 1% on Monday, reversing gains to start the week after Saudi Arabia and Russia announced plans for further oil output cuts. Markets are weighing up the softer demand outlook against the potential for tighter supplies.

HALEON 

Haleon (LSE:HLN) is reportedly exploring the sale of Nicotinell, a brand of nicotine cessation products which could be worth $800 million. According to Bloomberg it is looking at a potential divestment as it ‘seeks to offload non-core businesses.’ In February, similarly Bloomberg reported that it was looking at selling its ChapStick lip balm brand for a valuation of around $600 million. 

Haleon appears to be pursuing a streamlining strategy to focus on its biggest, most profitable brands and selling its non-core holdings to avoid the risk of becoming a jack of all trades, master of none. However, there is a mixed view from the analyst community, with six 'hold' recommendations, two 'sells' and 10 'buys'. This morning, Deutsche Bank cut its target price on the stock from 350p to 340p, and Barclays lowered its target price on Haleon from 400p to 378p, putting pressure on its share price. 

Shares in Haleon are trading roughly flat year-to-date, broadly in line with the FTSE 100. After a strong start to the year, the stock has been trading lower since the April highs, giving back its first quarter rally.

RYANAIR 

Ryanair’s June passenger traffic grew by 9% to a record high of 17.4 million guests, surpassing 17 million which was the previous record from May. It operated over 96,250 flights across the month with a load factor of 95%, unchanged year-on-year. 

Despite air traffic control strike disruption which saw 900 flights cancelled and 160,000 customers impacted, Ryanair still managed to achieve an all-time high for passenger traffic in this seasonally crucial month when demand for summer holidays is typically very high. 

Travel businesses have been putting up prices to try to offset pressures from cost inflation including from wages, fuel, food, and drinks. However, demand from consumers has remained robust despite this, with individuals and households prioritising their summer holiday if possible while cutting costs elsewhere.