Wednesday, November 1: FTSE indices commenced the morning in the green, with the primary index lifted by commodity majors following an increase in copper prices. Beneficiaries of this trade were Glencore, Anglo American, BHP Billiton and Rio Tinto. However, this was not enough for the FTSE 100 to close in the green(-0.07%), as general retailers weighed with prospects of a sluggish Q4 on sentiment read-across from Next, and a report showing UK shop prices were 0.1% lower annually in October.
The clothing retailer slipped 7.71% as Q3 retail sales faltered, prompting management to trim guidance for the full-year despite a strong performance in online sales. Pretax profit guidance was narrowed to £742-696m from £747-687m, as management flagged expectations of a weaker fourth quarter. Full price sales were 1.3% higher over a weak Q3 2016 comparator, though guidance for Q4 was indicative of growth at 0.3%. Next said its sales performance was “extremely volatile” in Q3, and highly dependent on weather conditions. Performance was noted as being strong in August and September, with cooler temperatures improving sales of warmer weight stock.
UK Manufacturing PMI data came in at 56.3 for October, ahead of a forecast 55.9 and September’s figure of 56. Businesses continued to benefit from strong domestic and overseas demand, but input and output inflation grew, signalling further price inflation in the future.
Bookie Betway is pricing the potential UK interest rate rise by the Bank of England tomorrow as a foregone conclusion. The bookmaker offers odd of 1/10 on the central bank lifting the base level of borrowing from historic lows of 0.25%, 11/2 is the price given that rates will stay the same. The bookie and the market largely believe a resurgence in inflation has tipped policymakers in favour raising interest rates, which would probably not have been the case given the Brexit-induced uncertainty facing the UK economy.
Across Europe, indices were mixed at the close with the FTSE 100 -0.07%, the DAX 30 +1.78% and the CAC 40 +0.2%.