Friday, 30 November: Anticipation for the G20 summit in Buenos Aires dominated investor sentiment although Wall Street indices were buoyed by Fed minutes released last night. Jerome Powell indicated a rate rise is likely at the Fed’s next meeting in December, although the velocity of rises in 2019 wasn’t so certain. The comments initially put Wall Street on track for a 3 day winning streak, but indices gave up steam towards the close to end slightly lower. Asia stocks were mostly higher overnight, but the mood wasn’t continued into major European indices with the blue-chip index finishing the last day of November in the red.
There was little news flow to dominate headlines today with Brexit uncertainty continuing to affect domestically orientated stocks. Construction group Kier were the biggest domestic faller after announcing a rights issue to raise £264m in order to accelerate its net debt-reduction program. 64.5m new shares are set to be issued at 409p each with the group further adding that an acceleration of its net-debt reduction program is necessary with some lenders looking to be reducing their credit exposure to the sector. Kier ended the day lower by 32.5%, dragging Keller down for good measure; the latter falling 4.6% at the close.
Thomas Cook won’t want to look back on this week in a hurry. Following its second profit warning in as many months earlier in the week, a broker note today sent the shares falling a further 10% to around 30p a share. Berenberg claim the tour operator may need to raise £400m n capital to lower its debt. The turbulence dragged TUI lower as sentiment over highly indebted businesses starts to put fear in investors amid uncertainty from banks.
While the G20 summit continues, trading volumes in the UK remain low. PM May is in attendance, leaving Liam Fox to continue her Brexit roadshow. Focus over the weekend will turn to Trump’s discussions with China’s President Xi Jinping while discussions between various world leaders will be closely monitored. There is also the OPEC meeting in Vienna next week to monitor.
At the close, many global indices were weighed down by investor caution as well as lower trade volumes. The FTSE 100 ended the day -0.83%, down just shy of 2% in November as Brexit headlines have dominated. The pound trades lower against the euro and dollar, the latter benefitting from Fed comments and the impending possible rate rise.