Markets Overview:

UK Index called to open +11 points at 7186; all eyes today will be on Brexit, “Everything's agreed on Brexit but how to handle sales tax”, an EU official said. It's not clear however if the DUP would agree. The latest plan gives Northern Ireland the right to retain or ditch Irish border arrangements four years after the transition period. Global markets were fairly mixed overnight, the US saw modest losses in equity markets. In Asia we saw modest gains mixed with modest losses, showing evidence of investor uncertainty. Brent oil prices steadied at around $59.2 per barrel as gold jumped $10 to settle at $1490.

In corporate news this morning:

Astrazeneca gets FDA priority review for it experimental breast cancer treatment, due in the Q2 next year. This is the joint venture with Japan’s Daiichi Sankyo Co for the treatment, trastuzumab deruxtecan, which is to challenge Roche, the largest cancer drug maker.

BHP Group released an operation review this morning, copper production decreased 3% in the quarter due to planned maintenance.  Production and unit costs remain unchanged for the 2020 financial year. All major projects under development are on track. Production numbers: Petroleum -11% YTD; Copper +5% YTD; Iron Ore -1% YTD; Metallurgical Coal -10% YTD;  Energy Coal -15% YTD; Nikel +1%.

Cairn Energy completed drilling at its Chimera Well and it was dry.

Domino’s Pizza announces that it will exit international markets, where it has been facing mounting losses. Group system sales +3.4% and UK online sales +7.2%. They state that market backdrop remains challenging and normal working practices continue to be impacted by their franchisee dispute. 

National Express announced results today,delivering “a good summer's trading, with all divisions growing revenue and profit. Our Spanish and Moroccan division, ALSA, performed particularly well. This drove a strong Group performance”·  Group revenue was up 14.5% in reported terms (11.8% in constant currency); Operating Profit grew 14.3% in reported terms (15.0% in constant currency); Group Operating Margin was also up in the period.

Premier Oil announces the success of the Tolmount East well in the UK Southern Gas basin which will add significant value to their UK portfolio.

Unilever Q3 Underlying sales grow 2.9% and reiterates full year growth view. Turnover up 5.8% to EUR13.3bn. Growth remained slow in Europe and North America whilst South East Asian markets grew well. Estimates missed in India and saw a Chinese slowdown.

WH Smith announces strong trading performance across the group and the announcement of the acquisition of US travel retailer Marshall Retail Group. Group revenue +11% and growth in travel profit +14%. High street profit in line with expectations at £60m (2018: £60m). Final dividend +8%. 

Source: Bloomberg, FT, Reuters, DJ Newswires, AlphaTerminal

Upgrades/Downgrades:

ASOS Upgraded to a Hold rating by Stifel (Bloomberg: 12 buys/ 11 holds/ 6 sells)

Bellway Downgraded to a Hold rating by Jefferies (Bloomberg: 10 buys/ 5 holds/ 0 sells)

Derwent Downgraded to a Hold rating by Morningstar (Bloomberg: 4 buys/ 7 holds/ 8 sells)

Kaz Minerals Downgraded to a Neutral rating by Goldman Sachs (Bloomberg: 15 buys/ 8 holds/ 2 sells)

Prudential Downgraded to a Hold rating by Morningstar (Bloomberg: 16 buys/ 6 holds/ 1 sells)

Travis Perkins Downgraded to a Hold rating by Canaccord (Bloomberg: 3 buys/ 14 holds/ 3 sells)

In Focus Today:

EU European Council Meeting

UK Retail Sales Data

Companies reporting today:

Dominos, Money Supermarket, National Express, Rentokil, Unilever

Companies reporting tomorrow:

Dechra Pharmaceuticals, Intercontinental Hotels Group, London Stock Exchange Group

Companies reporting next week:

Petra Diamonds, Reckitt Benckiser, St James Place, Travis Perkins, Whitbread, Softcat, AJ Bell, Kaz Minerals, National Express Group, Royal Bank Of Scotland (RBS), RELX, Astrazeneca, WH Smith, Barclays

(Full list available on Week in advance)

Today's Ex-Dividends:

Smiths Group - 2.1%

BAE - 1.7%

Marshalls - 3.2%

(Full list available on Week in advance)

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