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| Yesterday’s UK 100 Leaders | Close (p) | Chg (p) | % Chg | % YTD |
| Associated British Foods | 2460 | 72 | 3.0 | -12.8 |
| Marks & Spencer | 302.5 | 4.9 | 1.7 | -3.9 |
| Direct Line Insurance | 322.7 | 4.7 | 1.5 | -15.5 |
| DS Smith | 385.1 | 4.7 | 1.2 | -20.0 |
| Experian | 1791 | 19 | 1.1 | 9.5 |
| Yesterday’s UK 100 Laggards | Close (p) | Chg (p) | % Chg | % YTD |
| BT | 251 | -11.8 | -4.5 | -7.6 |
| Morrisons | 44.5 | -10 | -4.0 | 11.2 |
| CRH | 2237 | -85 | -3.7 | -15.8 |
| Glencore | 311.9 | -9.3 | -2.9 | -20.0 |
| Vodafone | 146.28 | -4.1 | -2.7 | -37.8 |
| Major World Indices | Mid/Close | Chg | % Chg | % YTD |
| UK UK 100 | 7,040.7 | -63.2 | -0.89 | -8.4 |
| UK | 19,043.7 | -20.0 | -0.10 | -8.1 |
| FR CAC 40 | 5,075.2 | -26.2 | -0.51 | -4.5 |
| DE DAX 30 | 11,484.3 | -10.7 | -0.09 | -11.1 |
| US DJ Industrial Average 30 | 25,635.0 | 173.3 | 0.68 | 3.7 |
| US Nasdaq Composite | 7,376.0 | 47.1 | 0.64 | 6.9 |
| US S&P 500 | 2,755.5 | 17.1 | 0.63 | 3.1 |
| JP Nikkei 225 | 22,085.8 | -62.0 | -0.28 | -3.0 |
| HK Hang Seng Index 50 | 26,059.0 | -62.0 | -0.24 | -12.9 |
| AU S&P/ASX 200 | 5,896.9 | 21.7 | 0.37 | -2.8 |
| Commodities & FX | Mid/Close | Chg | % Chg | % YTD |
| Crude Oil, West Texas Int. ($/barrel) | 61.77 | -0.08 | -0.12 | 2.7 |
| Crude Oil, Brent ($/barrel) | 71.77 | 0.11 | 0.15 | 7.7 |
| Gold ($/oz) | 1228.84 | 1.64 | 0.13 | -5.7 |
| Silver ($/oz) | 14.56 | -0.10 | -0.68 | -13.7 |
| GBP/USD – US$ per £ | 1.3116 | – | 0.02 | -2.9 |
| EUR/USD – US$ per € | 1.1444 | – | 0.02 | -4.6 |
| GBP/EUR – € per £ | 1.1461 | – | 0.00 | 1.8 |
Click graph to enlarge
UK 100 Index called to open +30pts at 7070, holding a 3-day falling channel since Friday’s failure to break above 7200. Bulls need a break above 7090 for an upside escape of the channel. Bears require a breach of 7060 for another leg lower. Watch levels: Bullish 7090, Bearish 7060
Calls for a positive open come in spite of a mixed lead from the US and Asia. Wall St was marginally positive, but Asian bourses surrendered much of their early gains (ex-Australia) as US electoral mania passed and investors returned their focus to the more pressing issues of US-China trade war and Fed interest rate hikes.
The US midterm elections delivered the most likely outcome with Democrats taking back control of the House of Representatives (lower house) although Republicans extended their majority in the Senate (upper house). Legislative gridlock could mean more equity market volatility while the Fed keeps hiking and the President faces even more of a fight to make permanent his supportive stimulus measures.
In corporate news this morning Marks & Spencer Q2 Food sales -2.7% like-for-like (Q1 -3.1%), Clothing & Home -1.6% (Q1 -0.6%); Total UK sales -2.3% (-2.2% in Q1). Online +5% (Q1 +6.3%). Adj. pre-tax profit +2%; 6.8p div flat. Expect little improvement in sales trajectory with challenging trading and strong online/discounter headwinds. CAPEX cut, Clothing & Home space -4% (5% prev). Other guidance unchanged.
ITV 9M revenues +5% (Broadcast & Online +2%, Studios +10%). Ads +2% (online +43%), non-ads +9%. Trading in-line. FY studios organic growth expected +3% after programme pipeline shifts. Q4 ad forecast -3% due to uncertain environment (Oct -3%, Nov +2%, Dec -6% to -8%), FY seen flat.
Persimmon CEO to step down, successor search begun. Autumn activity in-line with seasonality. Private sales +3% since H1 results; Outlet network +5%. £987m forward sales +9%. Prices firm, despite Brexit, financing supportive. Investing in own ultrafast broadband (Fibrenest). Redrow average selling price +4.6%, Chairman to step down
Royal Mail appoints new deputy Chairman, revises exec structure, Post & Parcels CEO steps down. The FT reports that HSBC suffered a data breach at its US retail business in October. Capita renews contract with Westminster City Council, worth £65m over 10 years. Balfour Beatty secures £425M highways England contract.
Wetherspoon Q1 sales +6.2%, like-for-like +5.5%; increasing staff pay this week; expect FY19 trading outcome slightly below FY18. G4S organic revenues +2.5%; sees 2018 earnings in-line with prev year on constant FX basis; US and Asia strength offsets slower Benelux.
Wizz Air H1 passengers +20% (load factor +0.8pts), revenues +20%, EBITDAR +2.7%, profit +1.2% (Q2: +5.1%). H2 capacity growth lowered to +14% (from +18%) after H1 fuel price rise. Warns of lower FY net profit in €270-300m range (down from €310-340m) after €80m fuel headwinds.
Sophos H1 like-for-like revenue +16% (subscription +20%), swings to $26m pre-tax profit after FX tailwinds and strong revs., op. cash flow +1%, billings +3.3%. Expects a modest improvement in H2 billings compared to H1 (recovering after tough comparable) and a significant improvement in 2020.
In focus today will be the fallout from the US midterm elections, given the shift in the balance of US legislative power and ensuing political gridlock in Washington (Trump’s budget and trade measures become harder to pass).
UK Halifax House Price (8:30am) growth is expected slower in October (1.2% YoY vs 2.5% prev.). Elsewhere we have September Eurozone Retail Sales (10am, forecast weaker) and US weekly Oil Inventories (3:30pm, another build expected).
Note the ECB Governing Council gathers for a non-monetary policy meeting today, while the Fed FOMC kicks off a two-day monetary policy meeting, the decision announced tomorrow.
In terms of US corporates reporting quarterly results and business updates today, we have the likes of Costco, Goldman Sachs (business update, not results), QUALCOMM, Rockwell, TripAdvisor and 21st Century Fox.
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Prepared by Michael van Dulken, Head of Research