Dixons revenue up over Christmas, BT expecting Italian slump
London open
The FTSE 100 is expected to open 21 points higher on Tuesday, after closing down 0.66% at 7,151.18 on Monday.
Stocks to watch
Electronics retail group Dixons Carphone issued a trading update for the 10 weeks to 7 January on Tuesday, with revenue up 8% year-on-year in sterling, 3% in the local currency and 4% like-for-like. In the UK & Ireland, the FTSE 100 firm said like-for-like growth was 6%, while it was 5% in Southern Europe. Dixons’ Nordics region saw revenue shrink by 1% on a like-for-like basis during the period.
BT has warned it expects a £500m hit to cash flow after an investigation discovered accounting errors at the UK telecoms giant's Italian business. After an internal review carried out with KPMG, BT's earnings in Italy were found to have been overstated for several years.
EasyJet reported a “solid” first quarter with revenue, costs and passengers numbers in line with expectations, while the budget airline reduced costs to mitigate against weak sterling and the impact of fuel. Passenger numbers rose 8.2% to 17.4m for the quarter ended 31 December 2016, compared to the previous year, driven by a 8.6% growth in capacity to 19.3m seats, while the load factor fell by 0.3 percentage points to 90%.
Newspaper round-up
Jeremy Corbyn is expected to launch a new bid to frustrate Brexit by forcing Theresa May to send her final deal back to Brussels if Parliament votes against it. The Supreme Court will on Tuesday morning return its judgement on whether Parliament should be given a vote before formal Brexit negotiations begin in March. - Telegraph
Government lawyers have warned Theresa May that drawing up a very short piece of legislation in response to Tuesday’s supreme court ruling on whether MPs should be given a vote on Brexit may not be adequate. The Guardian understands that legal advice to the prime minister and the Brexit secretary, David Davis, suggests that while a single-clause bill would be politically attractive if they lose the case, it could store up difficulties for the government further down the line. - Guardian
Amsterdam is in talks with major financial institutions based in the city of London about their imminent relocation to the Dutch capital, but its deputy mayor has warned the national government that the country’s strict cap on bankers’ bonuses could put it at a disadvantage in the Europe-wide scramble to capture Britain’s financial sector. The Amsterdam mayor’s office has been in negotiations with American and Japanese banks, along with fintech firms and other specialist finance firms, about moving staff and operations from London as a consequence of the UK’s vote to leave the European Union. - Guardian
Tesco has mounted a robust defence against more than 100 shareholders, which claim that they have suffered millions of pounds of losses after the grocer’s accounting scandal. Britain’s biggest grocer has filed a 42-page defence in the High Court alleging that the 111 institutional investors have made “vague and amorphous” claims that cannot be substantiated. - The Times
EDF has raised the spectre of delays or cost overruns to its £18 billion Hinkley Point nuclear plant as a result of Brexit, warning that any restrictions to trade and movement of labour could hamper the delivery of energy projects. The French state-controlled company said Britain would have to import goods and skilled labour from around the world in order to make the “very substantial investments in new infrastructure” needed to keep the lights on. - The Times
US close
US stocks finished mixed on Monday as investors mulled President Donald Trump’s policies.
The Dow Jones Industrial Average fell 0.14% to 19,799.85 and the S&P 500 was down 0.27% to 2,265.20, while the Nasdaq 100 finished up 0.05% to 5,065.70.
The dollar remained under pressure, having fallen on Friday after Trump’s speech revealed his protectionist agenda.
Trump said he planned to put “America first” and highlighted his intention to “buy American and hire American”.
Michael Hewson, chief market analyst at CMC Markets, said: “The dollar’s weakness that was starting to manifest itself last week has accelerated today in the aftermath of Friday’s populist Presidential inauguration speech prompted further weakness, due to a lack of detail on what fiscal measures the new administration would undertake to boost the economy.
“The dollar index has slid to its lowest levels since the 8 December, just before the Federal Reserve raised rates.”