Strong demand for Greece keeps Thomas Cook in line, Ladbrokes Coral profit near top end of forecasts
London open
The FTSE 100 is expected to open 28 points higher on Tuesday, after closing down 0.59% at 7,293.50 on Monday.
Stocks to watch
United Utilities said current full year trading was in line with expectations. Group revenue is expected to be slightly lower than last year, reflecting the accounting impact of United's Water Plus business retail joint venture, which completed on 1 June 2016, partly offset by its allowed regulatory revenue changes. Underlying operating profit for 2016/17 is expected to be moderately higher than 2015/16.
Thomas Cook’s winter programme was closing out as expected, while summer bookings had increased with strong demand for Greek holidays and smaller European destinations. The travel operator said it was progressing in line with expectations, although it is seeing some margin pressure in parts of the business due to increased competition.
In its first full-year results as a merged company Ladbrokes Coral reported profits near the top end of forecasts. Trading since the year end has seen mixed sports results, with a run of "exceptionally customer friendly" Italian football results hitting European revenues and margins, but the company said total group net revenue was still 2% ahead of last year and so it remained on target for the full year.
Vehicle membership services provider AA posted its results for the year to 31 January on Tuesday, with trading revenue up 1.6% at £940m. The FTSE 250 firm said roadside revenue grew 2.5% to £742m, with retention rising to 82% despite the increase in insurance premium tax, and new business volumes growing 14%. AA swung to a profit after tax of £74m, compared to a loss of £1m as reported a year ago.
Newspaper round-up
European diplomats based in the UK say the British government is stepping back from its threat to leave the EU without a trade deal if negotiations break down. In private, say diplomats, UK officials recognise the “havoc” that this would cause, and have come to regret the threat to turn the UK into a deregulated offshore tax haven, implicit in Theresa May’s Lancaster House speech in January, when she warned that “no deal for Britain is better than a bad deal”. - Guardian
Theresa May’s ambitions to create a “global Britain” after Brexit have been boosted by Qatar’s announcement that it expects to invest £5bn in the UK over the next five years. On Monday, two days before the planned triggering of article 50, Qatari investors at a London conference suggested they were unperturbed by the prospect of Britain’s departure from the EU and were looking for further opportunities to build on already significant investments in the UK that include the Olympic Village in east London, the Shard building, Harrods department store and a stake in Sainsbury’s. - Guardian
An increase in personal loans and rising levels of debt on credit cards have led the Bank of England to announce a review into whether the UK’s biggest banks have let their lending criteria become too loose. Britons are taking out unsecured loans at the fastest rate in more than 11 years and the Bank’s financial policy committee, which oversees financial stability, is concerned that a surge in the indebtedness of households could fuel another debt bubble, noting that consumer credit was “growing particularly rapidly”. - The Times
The financial sector will carry on growing despite Brexit but at a slower pace for the next couple of years, according to a survey. The rate of growth for personal and business lending is expected to slow in the next two years as real incomes weaken but a pronounced pick-up is predicted for 2019 and 2020, EY’s Item Club said. -The Times
Two of Tesco's largest shareholders have chastised the supermarket for its "foolhardy" £3.7bn merger with wholesaler Booker, arguing the deal would destroy billions of pounds worth of value. Schroders, the grocer's third biggest investor, and Artisan Partners, the fourth largest, have written to Tesco's board to urge the company to abandon its tie-up with Booker, throwing the deal into doubt. - Telegraph
The Serious Fraud Office and Tesco are within days of announcing a settlement that could mean Britain’s biggest supermarket chain will pay a multimillion-pound fine over an accounting scandal. Under the deferred prosecution agreement (DPA), Tesco would pay a penalty that could be well over £100m and agree to other conditions in return for avoiding formal prosecution for overstating its profits. - Guardian
US close
US stocks ended mostly lower on Monday, with the Dow notching its longest losing streak since August 2011 amid growing doubts about President Donald Trump’s ability to push through his economic agenda.
The Dow ended down for the eighth session in a row, off 0.2% to 20,550.98, while the S&P 500 fell 0.1% to 2,341.59 but the Nasdaq nudged up 0.2% to close at 5,840.37. Despite the mostly negative close, indices ended off their lows.
Investors were growing increasingly concerned that Trump may not be able to deliver on his economic policies to spend $1trn on infrastructure, cut taxes and loosen financial regulation, after Republican leaders withdrew their support for his healthcare bill on Friday, which was aimed at repealing and replacing Obamacare.
CMC Markets’ Michael Hewson said: “The continued growing pains of the new administration as well as the inability to generate a consensus to deliver a new health care bill has taken the heat out of the recent rally, in the past few weeks and Friday’s capitulation appears to have lowered the temperature further, as markets start to catch a cold.
“Having overseen a strong rally in stock markets over the past few months the new US president is learning a hard lesson in the differences between campaign promises and the ability to deliver them in a difficult political environment.”