UPDATED 10.30am:
Traders are holding their breath with European indices either flat or marginally ahead as the US presidential election result remains in the balance. Despite President Trump declaring himself ahead in key states, results could still take days to come through due to the weight of postal ballots still being tallied. There is now a risk of a protracted fight over the outcome in the coming days and possibly weeks. In a tweet that was subsequently taken down by Twitter, Trump accused the Democrats of trying to steal the election.
A surprise victory in Arizona for Joe Biden halted some of the momentum which appeared to be gathering behind Donald Trump's re-election campaign with focus now shifting to key swing states in the mid-West 'Rust Belt' of Wisconsin, Pennsylvania and MInnesota which could tip the direction of the election. The current state of play - Joe Biden ahead with 238 electoral college votes versus Donald Trump's 213, both well short of the 270 needed to win so all to play for.
UK Company Announcements
| Marks & Spencer (MKS) | Marks & Spencer plunged into an interim pre-tax loss of £87.6m, down from profits of £158.8m in the first half of last year. Operating profits in the food division were up 19 per cent while clothing crashed from an operating profit last year of £109.6m into an operating loss of £107.5m. M&S has started its second half in a similar vein to its second quarter, with food sales up 3 per cent over its first four weeks and clothing and home sales down by more than a fifth. |
| Provident Financial (PFG) | Having just returned from a heart operation, chief executive Malcolm Le May today says new lockdown measures "will inevitably have an impact on customer expenditure patterns and loan origination", and used a third quarter trading update to launch an operational review of the consumer credit division. |
| Smurfit Kappa (SKG) | Cash profits (Ebitda) came in at €1.13bn (£1bn) in the nine months to 30 September and the group says that the third quarter was ahead of expectations. It is guiding to €1.46bn-1.48bn of cash profits for the full year, versus €1.65bn in 2019. A second interim dividend of 27.9¢ per share will be paid on 11 December to shareholders on the register on 20 November. |
| Morgan Sindall (MGNS) | Having previously guided that pre-tax profit for the year to 31 December would be between £50m-£60m, the group now expects to slightly exceed the top end of this range. This comes as momentum has increased following the pandemic disruption in the first half. Average daily net cash is expected to surpass £150m – up from £99m in 2019 – and a 21p interim dividend will now be paid on 8 December to shareholders on the register at 13 November. |
| Mitie (MTO) | Revenue from continuing operations was 10 per cent lower year-on-year in the six months to 30 September at £972m. There was, however, an improvement between the first and second quarter as sales across cleaning, security and fixed technical services contracts picked up. Thanks to £192m from a rights issue and a £130m tax deferral, the group ended the first half with £90m of net cash versus £168m of net debt at the March year-end. |
| STV Group (STVG) | The broadcaster said that recovery in advertising is beating expectations, with ad sales dipping 4 per cent in the third quarter and by 2 per cent in October. Management is still cautious on the outlook, although noted that production can continue during the English lockdown and in all tiers of the Scottish system. |
Updated 07.55am
'We already have won this' - Trump just declared war
Futures did not like that: Donald Trump just declared war by declaring victory in the election before all the counting is over. He’s played the voter fraud card and this has undoubtedly unsettled markets as a long and protracted battle in the courts is precisely what investors do not want.
Trump spoke of trying to protect the “integrity” of the vote – choosing to frame this has he being the defender of the constitution, not the usurper. Trump said that “we have already won this” and that “we will be going to the US Supreme Court”, whilst talking about the Democrats “disenfranchising” voters.
He may yet win this, but it’s clear Trump wants the counting to stop. I fail to see how Trump can mount a serious legal challenge in the Supreme Court against states counting all the ballots cast. This is about delegitimizing a Democrat win and has the whiff of desperation.
FTSE futures, E-minis, gold, oil – everything went south on the comments from the president, except the dollar.
07.30AM
- It’s on a knife edge – Trump currently leads in Pennsylvania (20) but there are still lots of votes to count. In the last few minutes Nevada (6) has swung towards Biden and the Trump lead in Georgia (16) has narrowed.
- Trump showing much better than polls with a win in Florida which was called relatively early in the evening opening the path to presidency. Fears of the Republicans losing Texas proved unfounded and Trump leads in Georgia and North Carolina (15).
- Biden called to win Arizona (11), which leaves the key Rust Belt states of Wisconsin (10), Michigan (16) and Pennsylvania to decide the election
- But these won’t be called imminently and it could take days to decide final outcome, not even considering legal challenges prolonging the agony – A result today may not be possible, though if Biden clears 270 it seems difficult for Trump to mount a serious legal challenge.
- Bonds moved fiercely overnight with US 10s in a range of 0.945-0.791
- FX moves were significant, with GBPUSD across two big figures, from a high of 1.3140 to under 1.2940, before paring losses to trade at 1.2988
- DXY rises to highest level since end of Sep at 94.34, before it pared gains to retreat under 94.
- Gold whipsawed between $1916 and $1880
- US futures flattish to weaker with the uncertainty weighing on broad risk sentiment this morning, but with Nasdaq 100 futs +2 per cent on ‘safe haven’ tech bid and Trump win/status quo defensive positioning for Growth over Value
- FTSE futures weaker at 5760 implied, DAX also seen lower at 12,030 implied
But….Donald Trump has just made a speech claiming victory across a number of states which are not yet declared and hinted at legal challenges to come.
Neil Wilson is chief markets analyst at Markets.com
