Smiths revenue rises, Intertek to form environmental joint venture

London open

The FTSE 100 is expected to open 15 points higher on Tuesday, after closing up 0.34% at 6,753.18 on Monday.

Stocks to watch

Technology group Smiths said first quarter revenues rose 16% on a reported basis reflecting the collapse in the pound against the dollar and euro in the wake of the Brexit result. Expectations for the full year remain unchanged, the company added. At 28 October, net debt was £983m and has since been cut further with the receipt of proceeds from the divestment of John Crane's Artificial Lift business and Smiths Medical's Wallace franchise. With the sale of the lift business and Smiths Medical's Wallace franchise, the group said it had disposed of £60m of revenue and released more than £170m of capital towards reinvestment in growth opportunities.

Assurance provider Intertek has partnered with ABC Analitic, a water test provider, to form an environmental services joint venture in Mexico. The FTSE 100 company, which will own the majority of the joint venture, will use it to become a market leader in assurance, testing, inspection and certification to government environmental projects, regulators and corporations.

Aerospace, defence and energy component and subsystem company Meggitt issued a scheduled trading update on Tuesday, saying trading since the half year had been in line with expectations. The FTSE 250 firm said third quarter revenue growth of 6% on an organic basis - excluding effects of mergers and acquisitions, and foreign exchange - was consistent with the previously announced expectation of a greater second half weighting of organic revenue and earnings than in 2015. On a reported basis, revenue grew by 28%, including the effects of M&A and foreign exchange.

Newspaper round-up

A slowdown in the UK economy will hit tax receipts and leave the chancellor with little wriggle room for giveaways at next week’s autumn statement, a new report warns. Publishing new forecasts for GDP growth to slow next year as the Brexit vote bites, the consultancy firm PwC said Philip Hammond could afford some spending on big projects such as housing and roads if he changed the government’s fiscal rules. - Guardian

Mark Carney will face a volley of questions from MPs on everything from the Bank of England’s latest post-Brexit forecasts to his decision to remain governor for an extra year when he appears before the Treasury select committee today. In what is likely to be an eventful session, the governor is also likely to be asked about the implications of Donald Trump’s election victory for the UK amid a rapidly changing economic outlook. - The Times

President Barack Obama will reassure European leaders during a visit to Germany and Greece this week that Donald Trump, his successor, plans to maintain the US commitment to Nato and other core American alliances. In his first press conference since Mr Trump’s victory over Hillary Clinton, Mr Obama said the president-elect told him when they met last week that he was committed to maintaining US alliances. - FT

In the midst of all the market turmoil following Donald Trump’s US election victory last week, the UK’s Office for National Statistics announced an important change in how it publishes inflation numbers – and not everyone is happy. From March next year, statisticians will drop their focus on the consumer prices index (CPI) in favour of CPIH, which seeks to measure the housing costs of owner-occupiers. - Guardian

The government has confirmed that it will go ahead with building the entire £56bn HS2 high-speed train line. There will be one key change to the original plan: there will now be a spur taking trains into the centre of Sheffield, after heavy lobbying by local businesses. - FT

US close

US stocks ended little changed overall on Monday as weakness in the technology sector offset strong financials, although the Dow closed at a record high as investors continued to mull president-elect Donald Trump’s economic policies of deregulation, lower taxes and increased infrastructure spending.

The Dow Jones Industrial Average ticked up just 0.1% to 18,868.6 - its third record close in a row - the S&P 500 ended flat and the Nasdaq slipped 0.4%.

CMC Markets’ Jasper Lawler said: “There was a clear divergence in the tech-heavy Nasdaq where FANG stocks came under renewed selling pressure.

“Tech stocks like Facebook and Netflix won’t get any government contracts in a rise in infrastructure spending but Chinese expansion plans are at risk by possible trade tariffs.”

Meanwhile, Treasury bonds were under pressure, with the yield on the 10-year bond trading at its highest level since early January amid worries that Trump’s policies with be inflationary, causing the Fed to hike rates sooner than expected. Bond yields move inversely to prices.

Oil prices settled a little higher, with West Texas Intermediate up 0.9% at $43.78 a barrel and Brent crude up 0.1% at $44.78.