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A fresh opinion poll has sent sterling higher this morning after showing the Conservative party extending its lead over Labour to 12 points. That, in turn, has contributed to the FTSE 100 underperforming this morning; the index is currently more than 1% lower while most European equity markets are comfortably higher. On Monday, the S&P 500 suffered its worst day since early October amid cautious trade developments.
Trump said that he would raise tariffs on metals imports from Brazil and Argentina, noting the devaluation of their currencies. Washington has also proposed levies on French products in response to a digital tax and threatened the EU with a tariff in reaction to the latest developments in the Airbus-Boeing dispute.
The bump in projected support for the Tories comes despite accusations that the leading parties have tried to politicise a tragic terrorist incident that occurred in the City last Friday. There has been some relatively positive economic news, however. UK consumer confidence, according to YouGov, is showing resilience in the face of general election uncertainty. This upbeat tone converted into a retail boost last month, according to the British Retail Consortium. November's year-on-year sales rose by 0.9% in the build-up to Black Friday.
The Confederation of British Industry's latest forecasts, meanwhile, predict that the economy will accelerate by 2021 if Brexit headwinds subside. It noted, “business continues to show remarkable resilience”. Manufacturers, however, cut jobs at the fastest rate in seven years in November. The IHS Markit/CIPS Purchasing Managers' Index dipped to 48.9 from 49.6.
Globally, manufacturers fared better. The official Chinese PMI rose to 50.2 in November from 49.3, beating expectations. The manufacturing PMI for the Eurozone also improved, reaching 46.9, but although the reading resembles a three-month high, it is still contractionary.
Ferguson, the plumbing and heating merchant, said that first quarter trading in its fiscal year was strong, even though underlying profit came in slightly below expectations. Its US business continues to outperform and it said its UK demerger was progressing as planned. Expectations for the full year remain unchanged.
Cineworld has warned that full-year results could be “slightly below management's expectations”, blaming a lack of blockbuster movies and delayed releases for its disappointing intake. It said that box office revenue fell 13% in the 11 months to December. Cineworld's chief executive said that the integration of Regal, the US chain it bought for $3.6bn last year, was proceeding well.
Three hedge funds will not attempt to delay the £2.6bn takeover of Inmarsat, according to the British satellite communications provider. The hedge funds had previously been looking to delay the High Court's approval hearing, in an effort to secure a higher bid from the purchasing consortium. Shares in Inmarsat rose over 1% in early trading, but have pared back since.
Ocado is raising £500m via a convertible bond, in order to fund dozens of robotic warehouses around the world. The announcement reversed some of the gains the share price made last week when it signed an agreement with Japan's largest supermarket chain, but is a sign of Ocado's long-term global ambition. The bonds convert to equity if the share price climbs by 40-45%.
Finally, the FTSE 100's quarterly reshuffle this week is likely to see Hiscox demoted after the insurer's share price has fallen 12% since the beginning of September. Last month it warned that storms in the Bahamas and Japan would result in extreme cover claims. EasyJet is likely to be promoted back into the index after dropping out in June.
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