Barratt Developments forward sales surge, Severn Trent to swallow up Dee Valley Group

London open

The FTSE 100 is expected to open 20 points higher on Wednesday, after closing up 0.59% at 6,792.74 on Tuesday.

Stocks to watch

Housebuilder Barratt Developments issued a trading update for the period from 1 July to 13 November on Wednesday, with the board saying overall market conditions remained healthy. The FTSE 100 firm posted a sales rate of 0.74 net private reservations per active outlet per average week, compared to 0.71 for the same period a year earlier. Total forward sales - including joint ventures - were up by 4.3% to £2,654.3m, with wholly owned forward sales up 19.5% to £2,466.1m.

Rolls-Royce said said its outlook for 2016 remained unchanged for revenue, profit and cash.The company said it would benefit from weaker sterling and life cycle cost reductions which would more than offset higher engineering and programme costs in its civil aerospace unit. Rolls said other businesses were overall in line with expectations, despite “mixed” market conditions. Power systems markets were mixed reflecting weaker demand for industrial engines and service, although marine and power generation remain steady, but there were no signs of recovery yet in offshore oil & gas markets and further revenue weakness was expected in 2017 in the marine division.

Severn Trent’s water subsidiary is to buy Dee Valley Group, a water service provider, for about £78.5m. The acquisition expands the company’s subsidiary, Severn Trent Water’s offering in neighbouring areas in Wales and England.

Newspaper round-up

Theresa May and Philip Hammond have ended weeks of fraught Autumn Statement negotiations by agreeing measures to help key voters known in Whitehall as “Jams” — people who are “just about managing”. Downing Street and Treasury officials have spent weeks in tough talks, with the prime minister demanding that her government’s first big economic event next week should have more measures to help working class voters left behind by globalisation. – Financial Times

Rio Tinto’s lawyers uncovered more than a year ago internal emails about a questionable $10.5m payment to a consultant, but the mining company did not alert law enforcement authorities and investors about the matter until last week. The Anglo-Australian group said on November 9 it had notified authorities after discovering emails from 2011 that referred to the payment to the consultant, who helped head off a threat to Rio’s claim to the giant Simandou iron ore project in Guinea. – Financial Times

The soaring US dollar is causing mounting strains for the global financial system and ultimately threatens to set off a full-blown banking crisis in emerging markets, the world’s top’s economic watchdog has warned. “We have all the symptoms of a dollar shortage,” said Hyun Song Shin, chief economist at the Bank for International Settlements. - Telegraph

Google has announced plans to hire more than 3,000 new staff in the UK in a major boost to Britain’s technology sector after Britain’s vote to leave the EU. Announcing plans to expand the internet giant’s new London campus in King’s Cross, its chief executive Sundar Pichai said the investment showed Google was “committed to the UK”. – Telegraph

The outgoing US president, Barack Obama, has used his final trip to Europe to call for action to put Greece on a path to “durable” economic recovery, including the possibility of debt relief. Making his first stop in Athens in a farewell tour aimed at safeguarding his legacy, Obama made the strongest case yet for the debt-stricken country to be given some slack. He said: “To the rest of Europe I will continue to emphasise our view that austerity alone cannot deliver prosperity.” – Guardian

The Pension Protection Fund was attacked by MPs last night after The Times revealed that it paid a public relations firm more than £600,000 over the past two years. Lansons Communications is paid a £194,400 annual retainer by the fund, the pensions lifeboat for failed companies. Since January 2015 it has received another £249,200 in “additional payments”. The PPF is funded by a levy on final salary schemes. – The Times

The Serious Fraud Office has launched a legal action to prevent a former top Barclays banker from publicly discussing his role in the bank’s contentious Qatari fundraising at the height of the financial crisis. The SFO will next week ask for a gagging order at an employment tribunal brought by Richard Boath, the bank’s former head of financial institutions, over allegations of unpaid wages and unfair dismissal. – The Times

US close

US equities finished in the green on Tuesday as oil prices surged over 5%, while data pointed to firmer household spending, which could increase the likelihood of a rate hike from the Federal Reserve.

The Dow Jones Industrial Average finished up 0.29% at 18,923.06 points, having started the day in the red, the S&P 500 increased 0.75% to 2,180.39 points and the Nasdaq 100 was 1.33% firmer at 4,764.47 points.

Spreadex’s Connor Campbell earlier said the Dow fell as markets opened due to a combination of rate hike-fears, questions over whether the economy really needs president-elect Donald Trump’s suggested fiscal stimulus and general exhaustion, as it had risen by between 900 to 1,000 points in around 11 days.

Oil prices advanced amid expectations that OPEC members will agree to a cut in production when they meet in late November.

Brent crude was up 5.39% to $46.91 per barrel and West Texas Intermediate jumped 5.33% to $45.76.

On the macroeconomic front, the Empire State manufacturing index rose to 1.5 in November from -6.8 in the previous month, and above the -2.5 consensus forecast.

According to the Department of Commerce, retail sales volumes grew by 0.8% month-on-month in October to $465.9bn, 4.3% higher than last year, and above the 0.6% forecast.