Good morning. Today is a big day – though immediate shifts are unlikely, the arrival of Chinese envoys in Washington puts us on the road to a possible breakthrough on one of the biggest issues casting a cloud over markets.
The FTSE 100 managed a medium rally yesterday, closing up 0. 33 pc amid a broader burst of relief across European stocks after some sharp falls on Tuesday. The day was light on major Brexit news, and traders had little macro news to move on.
5 things to start your day
1)The boss British of Airways owner IAGhas slammed “flight-shaming” environmental campaignerswho want to curb air travel. Willie Walsh said holidaymakers and workers should not feel ashamed about boarding a plane – and insisted that commercial flying is a force for good which has lifted the horizons of millions of people.
2)Renting can conjure up images of damp walls, dodgy boilers and recalcitrant landlords but the age of Jeremy Corbyn and Brexit has helped foster a very different and altogether more niche market:the super-rich renter.Upmarket estate agent Knight Frank keeps a close eye on the top end of the London rental market and it notes rising demand from well-heeled customers for so-called “super-prime” tenancies, where renters pay £ 5, 000 a week or more.
3) UK drivers on Shell’s loyalty scheme will soon be able to offset their environmental impact by planting more trees as Big Oil responds to fears about climate change. From next week,customers can opt into the carbon credit initiative, which will see Shell invest £ 10 m towards the restoration of forests to atone for drivers’ emissions.
4)Homeowners looking to sell their propertyare shunning the market amid political turmoil over Brexit– dragging new listings down to a three-year low. The housing market stumbled again in September as new sales fell to within a whisker of their lowest level since the European Union referendum, according to the Royal Institution of Chartered Surveyors (RICS).
5)But Britain, while on the podium, is not the world champion in cashless.That title goes to Sweden, where demand for notes and coins is so limp that cash is literally disappearing: the amount in circulation has fallen from 80 bn kronor (£ 6.6bn) to Skr 58 bn (£ 4.8bn) in the last four years, a reduction of 27 .5pc. The same period has seen ATM withdrawals fall by more than half.
What happened overnight
MSCI’s broadest index of Asia-Pacific shares were flat, while both Japan’s Nikkei gained 0.3pc. Shanghai shares also rose 0. 35 pc.
US S&P 500 mini futures traded down 0.2pc, with a big part of early losses cut after the New York Times reported Washington will soon issue licenses allowing some US firms to supply non-sensitive goods to China’s Huawei.
Another report, from Bloomberg, that the White House is looking at rolling out a previously agreed currency pact with China also raised hopes of a partial deal and helped to lift assets.
In Hong, the Hang Seng index has added 0. 32 pc as investors cautiously await the resumption later in the day of high-level trade talks between China and the United States.
Earlier, US stock futures slumped as much as 1.3pc, as the South China Morning Post (SCMP) reported the Chinese delegation, headed by Vice Premier Liu He, was planning to leave Washington after just a day of minister-level meetings, instead of on Friday, as originally planned.
Coming up today
Two announcements worth paying particular attention to today: a trading update from Dunelm, and interim results from Hargreaves Lansdown.
“It’s difficult not to like Dunelm,” says CMC Markets’ Michael Hewson. Solid results have allowed it to post strong results so far this year, which have been matched by outperformance in its share price. There’s reason to believe “that the good news may be priced in”, however, says Hewson, so even meeting expectations might lead to a mixed response from investors.
“As it continues to invest in securing its online position in homeware, there is a risk that profits may well start to flat line, as profit margins shrink,” he says.
Investment supermarket Hargreaves Lansdown’s shares have had a tough few sessions of trading – registering as the FTSE 100 ‘s biggest faller at several points last week. The fall followed some critical analyst commentary that said Hargreaves ’core product was struggling to justify its price premium over rivals in a heated sector. Investors will look for reassurance the group’s strategy is paying off in today’s results.
Interim results:Hargreaves Lansdown
Trading update:Dunelm, Mondi, Saber Insurance
Economics:GDP, RICS house price balance, industrial and manufacturing production, construction output, trade balance (UK), CPI inflation, jobless claims (US)
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