Burberry hangs up solid third quarter, Pearson trading in line with expectations

London open

The FTSE 100 is expected to open 16 points higher on Wednesday, after closing down 1.46% at 7,220.38 on Tuesday.

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Boosted by a return to growth for the Asia Pacific region but with the Americas still in decline, Burberry's underlying retail sales grew 4% in the third quarter. In the three months ending December, the fashion retailer made revenues of £735m that were 22% higher than the same period last year thanks to the significant currency shifts, with like-for-like sales up 3%.

Pearson confirmed on Wednesday that it expects to report full year profit and earnings in line with forecasts, but also expects a reduction in revenue due to a decline in the North American higher education market as it aims to accelerate its digital transition in order to manage a fall in print. Adjusted operating profit and adjusted earnings per share for the year ended 31 December 2016, are expected to be about £630m and 57p, respectively, with revenues down about 8% primarily due to the weakness in North American higher education courseware.

Vodafone announced on Wednesday that it and TDC Group have agreed to renew their strategic partnership for Denmark and Norway, building on a successful fifteen-year relationship that began in 2001. The FTSE 100 mobile network operator said under the renewal, which commenced on 1 January, TDC's mobile customers will continue to benefit from mobile voice and data roaming, including high-speed data on Vodafone's 4G networks. Vodafone's customers visiting Denmark will enjoy voice and data roaming, including high-speed data on TDC Group's mobile network.

Newspaper round-up

Almost three-quarters of international retailers are choosing to expand outside of the UK because of this country’s burdensome and complex business rates system, fresh figures have shown. The findings come at a time when British firms are chastising the Government’s proposals to overhaul an appeals procedure which will limit companies’ powers to challenge incorrect business rate rises and face looming bill increases in an April revaluation. - Telegraph

Nurses, teachers and firefighters’ pay will drop by thousands of pounds in real terms by the end of the decade unless the government softens its stance on public sector salaries, the TUC has said in a new analysis. The trades union organisation calculated that midwives, teachers and social workers will see their real pay, which accounts for the impact of inflation, drop by more than £3,000 by 2020 if the government sticks to plans to limit salary increases to 1% a year. – Guardian

Mitsui has become the first Japanese company to join the increasingly international list of operators with their hands on the controls of Britain’s railways by buying a 40 per cent stake in the East Anglia train franchise. Its eyes, however, may be fixed firmly further down the line. Mitsui’s arrival on the British railways is likely to herald an assault by the Japanese industrial giant on the greatest prize of all: the tender later in the year to operate the trains on HS2. – The Times

A quarter of Britons expect to be better off in 2017 than last year, despite rising inflation and fears of a “hard” Brexit, according to PwC. Its consumer survey suggests that positive sentiment is marginally up on last year, when only 21 per cent of those polled expected to be better off. However, 26 per cent of those polled said that they expected conditions to worsen over the next 12 months. – The Times

US close

Despite a solid start to earnings season, US stocks and the dollar were both sent reeling by remarks from President-elect Donald Trump that the greenback was "too strong".

The Dow Jones Industrial Average and S&P 500 both closed down 0.30% to 19,826.77 and 2,267.89 respectively, while the Nasdaq composite was down 0.6% to 5,538.73 on the day US markets reopened after Monday's holiday for Martin Luther King Jr Day.

Meanwhile the dollar lost 3% to the pound to 1.2414, gave up 1% on the euro to 1.0712 and 1.3% on the yen to 112.614, in fact falling against every G-10 currency pair and with Blackrock saying the dollar has now lost roughly a third of its post-election gains.

Analysts noted that fall in the dollar saw a number of significant price levels give way in the forex market, including EUR/USD touching 1.07 for the first time since early December and USD/JPY falling beneath 113 to a six-week low.