3 FTSE 100 Shares That Should Beat The Market Today: BAE Systems plc, Diageo plc and Royal Mail PLC

The FTSE 100 (FTSEINDICES: ^FTSE) dipped 16 points to 6780 this morning as the UK joblessness rate increased unexpectedly for the first time since the beginning of 2013. The unemployment rate edged slightly higher to 7.2% for the three months to December, compared to 7.1% the three months to November. This is just one month’s data, mind, and the overall trend for the second half of last year was of a sharp fall in joblessness.

The labour market has been a major point of focus ever since the unemployment rate was linked to Mark Carney’s pledge to keep interest rates at record lows. This policy is no longer being followed, rather a range of indicators will be used, such as wage growth and productivity.

These shares should beat the market today:

BAE Systems

BAE SystemsThe shares in BAE Systems (LSE: BA) added 15p to 453p this morning after the aerospace company announced that the UK and Saudi Arabia had come to a long awaited pricing deal for Eurofighter Typhoon combat jets. In 2007 the 72 combat jets were purchased for over £4bn, but now terms have been agreed over a price escalation.

As Rolls Royce, another company in the sector, suffers from lower demand for defence equipment, BAE’s relationship with Saudi Arabia — the largest export customer for the Typhoon combat jet — appears even more crucial. BAE suffered a setback last year after talks fell through with the United Arab Emirates over the purchase of Typhoon Jets.

The firm is relying on exports to drive growth.


Shares in Diageo (LSE: DGE) (NYSE: DEO.US) added 27p to 1898p this morning, marking a recovery since it diageoreleased its half-year results in January, when the share price fell by 5%. The owner of Guinness and Smirnoff was hurt by slowing demand in emerging markets, which is an area the firm is targeting for long-term growth. In order to fund investment in growth and improve margins Diageo will cut costs by £200m a year.

Shares in Diageo have risen 25% over the last two years and the company trades on a P/E of 16, which is above the FTSE’s long-term average of 14.

Royal Mail

royal mailRoyal Mail (LSE: RMG) shares increased 8p to 605p this morning — an increase of nearly 5% on the beginning of the year. The FTSE 100 member, valued at nearly £6bn, handled 115 million parcels over Christmas.

The group’s present financial performance is in line with expectations and, for the full year, key value drivers should be met.

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> Mark does not own shares in any company mentioned.