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London open: FTSE nudges up as investors eye US election
London stocks were just a smidgen higher in early trade on Tuesday, with investors erring on the side of caution as Americans headed to the polls.
At 0900 GMT, the FTSE 100 was up just 0.1% at 8,189.53.
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “There is a ‘wait and see mood’ on the markets as uncertainty weighs about the outcome of what appears to be a deadlocked US Presidential election. Campaigning is converging on the crucial swing state of Pennsylvania and the extent to which voters can be galvanised to join queues at polling booths could make all the difference.
“The dollar has been fluctuating but is still lower on the week, as Kamala Harris’ chances have appeared to have improved. A pro-tariff Trump presidency could see the dollar strengthen amid concerns higher inflation will prompt the Fed to keep interest rates higher. There is likely to a period of volatility particularly if the result is contested, but investors should keep their eyes on long-term horizons as historically financial markets have risen over the course of both Democratic and Republican presidencies.”
On home shores, data from the British Retail Consortium and KPMG showed that retail sales saw a modest increase in October, rising by 0.6% year-on-year.
In equity markets, water companies were on the rise on the back of positive research notes from both Citi and JPMorgan Cazenove, with Severn Trent, United Utilities and Pennon among the top performers.
Severn Trent was upgraded to ‘neutral’ at Citi, which also opened 90- day “positive catalyst watches” on United Utilities and Pennon into Ofwat’s Final Determinations.
Meanwhile, Citi upgraded SVT and Pennon to ‘overweight’ and maintained its ‘overweight’ on UU.
Vodafone gained as the Competition and Markets Authority said the merger between it and Hutchison’s Three UK could proceed “if appropriate remedies are implemented”.
Primark owner Associated British Foods was higher as it posted a 33% jump in full-year adjusted pre-tax profit and announced a special dividend, with revenue growth in both the retail and food businesses.
Interdealer broker TP ICAP advanced as it reported record third-quarter revenue following strong performance in its Global Broking and Liquidnet businesses.
On the downside, Schroders tumbled as it reported net outflows of £2.3bn for the third quarter.
Morgan Advanced Materials fell after a trading statement, while Close Brothers was knocked lower by a research note from RBC Capital Markets, which added a “speculative risk” qualifier to its rating for the stock.
RBC said that if the Supreme Court upholds the Hopcraft judgement applying a broad interpretation, motor finance litigation could spread to other products like premium finance.
“CBG is the only bank in our coverage that has material exposure here (circa 10% of the loan book, 50% retail, 80:20 motor:home, respectively),” it said. “Our initial estimate of the potential liability for CBG – in the event of a bad outcome in respect of premium finance – is circa £250m, of which £100m has been included in our model.”
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Wise Plc | +5.21% | +37.00 | 747.00 |
| 2 |  |
Severn Trent Plc | +3.04% | +78.00 | 2,648.00 |
| 3 |  |
Melrose Industries Plc | +3.02% | +14.30 | 488.50 |
| 4 |  |
Associated British Foods Plc | +2.93% | +67.00 | 2,356.00 |
| 5 |  |
Aib Group Plc | +2.76% | +12.00 | 446.50 |
| 6 |  |
United Utilities Group Plc | +2.73% | +28.00 | 1,055.00 |
| 7 |  |
Bt Group Plc | +2.29% | +3.25 | 145.40 |
| 8 |  |
Rentokil Initial Plc | +1.94% | +7.50 | 393.70 |
| 9 |  |
3i Group Plc | +1.87% | +60.00 | 3,261.00 |
| 10 |  |
Next Plc | +1.75% | +173.00 | 10,055.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Woodside Energy Group Ltd | -0.98% | -12.00 | 1,208.00 |
| 2 |  |
Smith (ds) Plc | -0.81% | -4.50 | 548.00 |
| 3 |  |
Sant Uk.8fepf | -0.73% | -1.00 | 135.50 |
| 4 |  |
Ferguson Enterprises Inc. | -0.65% | -100.00 | 15,260.00 |
| 5 |  |
Carnival Plc | -0.62% | -9.50 | 1,530.50 |
| 6 |  |
Flutter Entertainment Plc | -0.42% | -75.00 | 17,655.00 |
| 7 |  |
Astrazeneca Plc | -0.38% | -42.00 | 11,000.00 |
| 8 |  |
Gsk Plc | -0.35% | -5.00 | 1,409.00 |
| 9 |  |
Coca-cola Europacific Partners Plc | -0.33% | -20.00 | 5,980.00 |
| 10 |  |
Gen.acc.8se.pf | -0.18% | -0.25 | 140.25 |
US close: Stocks fall as investors brace for election day
US stock markets finished lower on Monday as traders braced for volatility in the days ahead with the latest polls showing Donald Trump and Kamala Harris neck and neck in the race to become America’s 47th president.
“Weighted down by traders squaring up in pre-event positioning, Wall Street indexes wobbled through the New York session as investors steeled themselves for the high-stakes US election day,” said Stephen Innes, managing partner at SPI Asset Management.
The Dow closed down 0.6%, while the S&P 500 and Nasdaq both slipped 0.3%.
All eyes are firmly fixed on Tuesday’s election, with pundits branding it a deadlocked race between the former president and current vice president. Congress will also draw an amount of investor attention, with a Republican or Democratic sweep of both the Senate and the House of Representatives likely meaning fresh spending plans or a tax overhaul would be put in place.
While polls are still yet to identify a clear favourite, financial markets had been pricing in a Trump win, with the ‘Trump trade’ – a stronger dollar, weaker bonds and stronger crypto – having performed well in recent weeks. However, the Trump trade was quickly unwinding on Monday as investors scaled back positions, with 10-year US Treasury yield 10.8 basis points to 4.289% and the US dollar index dropping 0.4%.
“With the race still too close to call, it seems investors aren’t ready to reposition portfolios until we get the result. However, the moment we get clarity on the winner could lead to some sharp movements in the market as investors play catch-up with the election,” said Dan Coatsworth, investment analyst at AJ Bell.
In economic news on Monday, US factory orders fell more than expected in September, according to the Census Bureau, representing the fourth decline in the past five months as orders for transportation equipment dropped sharply. New orders for manufactured goods were $2.8bn less in September at $584.2bn, down 0.5% over the month.
Later in the week, the Federal Open Markets Committee will meet for its two-day policy meeting on Wednesday and Thursday, with economists widely expecting to see the central bank cut its benchmark interest rate again – this time from 5.0% to 4.75%.
“Unperturbed by the political theatrics, markets remain locked in on expectations for a quarter-point rate cut on Thursday, followed by an additional 100 basis points of easing over the next 12 months,” Innes from SPI Asset Management said. “Traders are sticking to their rate outlook, letting the economic indicators lead the way, even as election fever grips the headlines.”
Market movers
Truth Social owner Trump Media & Technology Group rallied 12%, rebounding after having dropped more than 40% over the past three trading sessions, as the stock continues to be volatile ahead of the election. Since 23 September, the shares have risen by 183%.
Apple finished lower after Warren Buffett’s Berkshire Hathaway further lowered its stake in the tech giant Apple, downsizing its biggest equity holding for a fourth consecutive quarter. Berkshire’s quarterly report revealed it held $69.9bn worth of Apple shares at the end of September, implying the company had disposed of approximately a quarter of his stake.
The report also had a negative impact on Berkshire’s own stock after the investment company revealed that operating earnings fell 6% year-on-year in the third quarter.
Chip giant Nvidia was higher on the back of an announcement that it will join the Dow Jones Industrial Average this Friday. Nvidia will take the place of software group Intel, which moved firmly lower on Monday.
Tuesday newspaper round-up: Oasis fans, house prices, Future
The $1m-a-day voter sweepstakes that Elon Musk’s political action committee is hosting in swing states can continue through Tuesday’s presidential election, a Pennsylvania judge ruled on Monday. The common pleas court judge Angelo Foglietta – ruling after Musk’s lawyers said the winners are not chosen by chance – did not immediately give a reason for the ruling. – Guardian
Oasis fans who have fallen victim to ticket scammers have lost £346 each on average, according to a high street bank’s analysis of its own data. Lloyds Bank said fans desperate to buy tickets to the Manchester band’s UK reunion shows next year had been hit by a “landslide” of scams, with more than 90% of cases starting with fake adverts and posts on social media. It said an analysis of scam reports made by customers of Lloyds Banking Group – including those with Lloyds, Halifax and Bank of Scotland, and where Oasis was referenced as part of the claim – showed “hundreds” of people said they had been defrauded. – Guardian
House prices in Britain are set to grow almost twice as fast as inflation in the next five years and outpace wages, forecasts suggest, in a blow to Sir Keir Starmer’s ambitions to boost the number of affordable homes. House prices are expected to surge by 20pc between now and 2029, according to the latest residential forecast from property firm JLL. That uptick would outpace a 11.6pc rise in consumer price inflation predicted for the same five-year period by the Office for Budget Responsibility (OBR), and a 14pc increase in wages predicted by Oxford Economics. – Telegraph
Investors ditched nearly £1 billion from funds focused on UK stocks last month as they tried to book profits before Rachel Reeves increased capital gains tax in the budget. Researchers at Calastone, the largest global funds network, found that stock sell orders rose by 36 per cent in the month to October 29 to a record £17 billion, suggesting that investors tried to crystallise profits to avoid paying more tax on them. – The Times
The veteran entrepreneur Sir Peter Wood, one of the largest shareholders in Future, is seeking to oust the chairman of the £1 billion publisher behind Marie Claire after the abrupt resignation of its chief executive. Shares in Future tumbled by almost a fifth last month when the FTSE 250 company unsettled investors by announcing that Jon Steinberg, 47, was stepping down as chief executive to return to the US only 18 months after taking on the role. – The Times
