Profits jump at Ted Baker, while they slump at N Brown

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The FTSE 100 is expected to open 20 points lower on Tuesday, after closing up 0.75% at 7,097.50 on Monday.

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Fashion retailer Ted Baker reported a jump in interim profit as revenue grew and the company lifted its dividend following a good performance across all channels, despite challenging trading conditions. In the 28 weeks ended 13 August, pre-tax profit rose to £21.5m from £17.8m on revenue of £259.5m, up 14.4% from the same period a year ago. The group lifted its interim dividend to 14.8p per share from 13.2p.

Profits fell 20% in the first half of the year for specialist-fit clothing retailer N Brown, but this was ahead of company-compiled consensus forecasts and followed a recovery in sales in the second quarter. The interim dividend was held flat as the company revealed the the autumn-winter season has started in line with its plans as it adopts a "more assertive stance" on prices and an agile approach in order to cope with a backdrop which "remains volatile".

Residential property investment and management company Grainger provided an update on trading for the year to 30 September on Tuesday, reporting “good rental growth” and “strong sales performance” as a result of cost reductions. The FTSE 250 firm said it expects recurring profit for the year to be above £50m, at the higher end of management expectations, as well as high single digit year-on-year growth in NNNAV for the full year. At the same time, Grainger confirmed the granting of planning permission for the 163-home build-to-rent Apex House development in Seven Sisters, north London.

Retirement housebuilder McCarthy & Stone said trading had improved in the first few weeks of the financial year in comparison to the sharp fall it experienced after the Brexit vote, while the company announced that its chief executive was stepping down after five years. In a trading update for the first five weeks of the new financial year, the company said trading was ahead from the previous year as reservations have been “stronger” and the cancellation rate has returned to normal levels.

Newspaper round-up

Cabinet ministers are being warned that the Treasury could lose up to £66 billion a year in tax revenues under a “hard Brexit”, according to leaked government papers. GDP could fall by as much as 9.5 per cent if Britain leaves the single market and has to rely on World Trade Organisation rules for trading with the continent, compared with if it stayed within the EU, the forecasts show. - The Times

Theresa May has been accused of tyranny and lack of respect for democracy by some of her own MPs over the government’s refusal to give parliament a say on the terms of leaving the EU. A string of Conservatives were critical of the government’s Brexit strategy in a House of Commons debate on Monday, with some asking for more details about the government’s negotiating plan and others calling for a greater say on the way the UK will leave the EU. - Guardian

The slump in sterling is a blessing in disguise after years of overvaluation and helps to break the corrosive stranglehold of the financial elites over the British economy, according to a former bail-out chief for the International Monetary Fund. “It is desirable from every point of view. The idea that Britain is in crisis or is on its knees before the exchange rate vigilantes is ludicrous,” said Ashoka Mody, the IMF’s former deputy-director for Europe and now at Princeton University. - Telegraph

Retailers have warned of challenging times ahead as the weak pound ramps up their import costs and consumer confidence is buffeted by a climate of economic uncertainty as the UK embarks on Brexit negotiations. Underscoring the volatile pattern of recent months, the latest snapshot of high street and online spending showed like-for-like sales were up 0.4% on the year in September, a turnaround from August’s 0.9% drop. - Guardian

President Putin came to the rescue of the oil price yesterday, driving it to a one-year high as Russia revealed that it was ready to join other leading producers in cutting supply this year. The Opec cartel, led by Saudi Arabia, is planning to broker a production cut at a meeting next month, but a deal was beginning to look unlikely after Iraq, its second-biggest producer, said that it wanted to raise output in 2017. - The Times

US close

US stocks ended in the black on Monday as oil prices gained ground, with investors digesting the second presidential debate.

The Dow Jones Industrial Average and the S&P 500 closed up 0.5%, while the Nasdaq rose 0.7%.

At the same time, oil prices settled higher after Russian President Vladimir Putin told an energy congress in Turkey that the nation was ready to join OPEC in a proposed curb on production. Brent crude was up 2% at $52.96 a barrel and West Texas Intermediate was up 2.8% to $51.19.

With little on the agenda due to the Columbus Day holiday, traders continued to mull Sunday’s debate between Donald Trump and Hillary Clinton. While analysts had mixed views about who won the debate, the recent scandal surrounding Trump’s inappropriate comments about women has seen Clinton slightly increase her lead in the polls.

“The overall market reaction to Round 2 of the Presidential Debate is far less volatile to what we experienced at the end of Round 1, although this could be because the race to who could possibly win the US election was far closer at that time,” said FXTM vice president of market research Jameel Ahmad.

“Donald Trump appears to have now managed to alienate himself from his own political party, with the feeling in the air being that the comments released from a 2005 recording has gone some distance towards self-destructing his own presidential campaign.”