Marks & Spencer holds dividend, Direct Line costs rise higher

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The FTSE 100 is expected to open 10 points higher on Tuesday, after closing up 1.7% at 6,806.90 on Monday.

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Marks & Spencer held its interim dividend as first-half profits fell almost 19%, with new chief executive Steve Rowe announcing a £350m investment plan to close 113 stores in the UK and overseas markets to try and return the retailer to profitable growth. Revenue in the 26 weeks to 1 October of £4.99bn was down 0.9% on the equivalent period last year, but underlying pre-tax profit was down 18.6% to £231.3m due to lower Clothing & Home sales.

Direct Line Group posted a trading update for the nine months to 30 September on Tuesday, with gross written premium for ongoing operations 4.2% higher, and the company claiming continued growth in Motor own brands, up 9.7%. The FTSE 100 firm said motor and home own brands in-force policies were up 4.3% year-on-year, with strong customer retention and continued growth in Green Flag direct and Direct Line for Business. Its total costs of £669.5m were £16.1m higher than the first nine months of 2015, after absorbing £24m of Flood Re costs in Q2 2016.

Associated British Foods reported a rise in full year revenue as it expanded the selling space of discount clothing retailer Primark, while it was affected by the weak value of sterling. Revenue grew 5% for the year ended 17 September to £13.4bn, compared to last year, or 4% on a constant currency basis.

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Britain’s leading tax and spending experts have warned Philip Hammond that his options are limited in this month’s autumn statement after predicting that slower growth and higher inflation will punch a £25bn hole in the public finances by the end of the current parliament. The Institute for Fiscal Studies said that if economic forecasters were right about the impact of Brexit, the new chancellor would have to extend austerity after the next election in order to finally eradicate the budget deficit built up during the financial crisis of 2008-09. - Guardian

Philip Hammond must focus on “targeted, timely and temporary” tax cuts and spending increases to deal with the economic squeeze of leaving the EU, according to the Institute for Fiscal Studies. The think-tank said an infrastructure spending boost would provide the Government with the most “bang for their buck” in the forthcoming Autumn Statement as it warned that the Chancellor faced £25bn in extra public borrowing following the Brexit vote, even if the UK stopped its EU budget contributions. - Telegraph

Bumper box office takings, strong trade in pubs and a rush for winter clothes drove a solid rise in consumer spending last month, according to new figures. Barclaycard said spending rose 5.5% on a year earlier in October, the strongest growth since it started publishing monthly health checks on consumer finances in 2011. But it warned the trend of solid spending growth could soon fizzle out as households worry about inflation. - Guardian

Britain's jobs market is “thriving” again after a summer dip following the Brexit vote, according to a survey by the Recruitment and Employment Confederation. The monthly REC/Markit barometer showed the number of people finding permanent roles climbed at the fastest pace in eight months in October, marking the third consecutive month of increases. - Telegraph

The dollar value of China’s exports and imports shrank for the second month running in October, indicating continued deterioration for the country’s external trade at the start of the fourth quarter. Outbound shipments valued in dollars fell 7.3 per cent year on year in October, according to China’s General Administration of Customs, versus a fall of 6 per cent predicted by economists. - Financial Times

US close

US markets were buoyed on Monday by news that Hillary Clinton was likely to be heading to the White House on 8 November, after the FBI cleared the Democratic candidate over use of her emails on a private server.

James Comey, the director of the FBI, told Congress before markets opened that the second probe into Clinton’s emails reaffirmed his July verdict of no evidence of criminal wrongdoing.

The Dow Jones Industrial Average increased 2.08% to 18,259.60 points, the S&P 500 climbed 2.22% to 2,131.52 points and the Nasdaq 100 soared 2.43% to 4,773.73 points.

Connor Campbell, financial analyst at Spreadex, said the Dow Jones displayed a clear preference for president, as expected, with the index surging 250 points following Clinton’s email verdict.

“That takes the Dow back ... after abandoning that level last Tuesday in the aftermath of the FBI controversially re-opening the Clinton email case.”

Meanwhile, oil rebounded on the news that the secretary general of OPEC said the cartel was committed to a deal to cut production, but doubts persist over the feasibility of the plan.

An earthquake also hit Oklahoma on Sunday near the country's biggest crude-storage base.

Brent crude was last up 1.62% to $46.33 per barrel and West Texas Intermediate leapt up 2.02% to $44.98.