Travis Perkins to close 30 branches, BHP Billiton production down
London open
The FTSE 100 is expected to open 6 points higher on Wednesday, after closing up 0.76% at 7,000.06 on Tuesday.
Stocks to watch
One of the first companies in the construction sector to provide an update on the third quarter, Travis Perkins reported market conditions have worsened and in light of the uncertainty it has decided to close more than 30 branches and launch a cost-cutting programme. The FTSE 100 group said that its consumer, contracts and general merchanting businesses had outperformed the market, however, with total sales growing 3.4% in the three-months to the end of September and like-for-like growth of 2.0%.
BHP Billiton posted its operational review for the three months to 30 September on Wednesday, with all of its production and unit cost guidance remaining unchanged for the 2017 financial year - though guidance for the Olympic Dam was under review after a state-wide power outage in South Australia. The FTSE 100 firm reported a 15% drop year-on-year for petroleum production in the quarter, to 55 Mboe, with copper down 6% to 355 kt and iron ore flat at 58 Mt. Metallurgical coal was an exception, rising 1% to 11 Mt, while energy coal was off 4% to 7 Mt.
Health, hygiene and home products manufacturer Reckitt Benckiser grew in the third quarter but was affected by its ongoing legal issues in South Korea, low demand in Russia and weakness in the Scholl business. In a trading statement, the company reported 2% like-for-like growth in the third quarter which was impacted by expected headwinds, with total growth increasing 17% due positive foreign exchange rates.
Newspaper round-up
Not for the first time in his career, a problem of resources was preventing Masayoshi Son, the billionaire Japanese technology investor, from realising his ambitions. His company SoftBank had recently stretched its balance sheet to splash $32bn on UK chip designer ARM. But the serial dealmaker, who believes in his ability to see into the future, wanted more. – Financial Times
Britain’s prime minister heads to her first EU summit this week with fellow European leaders wondering if she is finally ready to flesh out her sound bite: “Brexit means Brexit”. They are likely to be disappointed — Theresa May has insisted she will not show her hand before Brexit negotiations start. – Financial Times
Sir Philip Green has made a last ditch plea to save his knighthood, hinting that he is close to agreeing a rescue deal for the failed retailer BHS’s pension fund and stating he is “very, very, very sorry” for the collapse of the business. On Thursday MPs will debate the BHS saga in parliament. The backbench motion calls on Green to resolve the deficit in the company pension fund while an amendment demands his knighthood “be cancelled and annulled” by the house’s honours forfeiture committee. – Guardian
Gap is to close all its Banana Republic stores in the UK as the ailing fashion retailer focuses on North America to revive its sales. The company said it expected to close the majority of the eight UK stores by the end of this year, a Gap spokeswoman told Reuters. - Guardian
US close
US stocks ended in the black as investors cheered a series of solid earnings reports from the likes of Goldman Sachs and Philip Morris.
The Dow Jones Industrial Average closed up 0.4%, the S&P 500 rose 0.6% and the Nasdaq ended 0.9% higher.
Meanwhile, oil prices settled higher, with West Texas Intermediate up 0.9% to $50.39 a barrel and Brent crude 0.5% firmer at $51.79.
Earnings releases underpinned sentiment on Tuesday. Banking heavyweight Goldman Sachs rallied after it said third-quarter profit rose to $2.09bn, or $4.88 a share, from $1.43bn, or $2.90 a share, versus expectations it would report $3.82 a share.
Tobacco firm Philip Morris International was on the front foot after its third quarter earnings beat forecasts, while shares in Domino’s Pizza gained as it posted a 25% jump in profit in the last quarter thanks to strong sales.
United Health racked up healthy gains after reporting 23% growth in quarterly profit, while asset manager Blackrock edged up after its third-quarter earnings surpassed analysts’ estimates.
Netflix surged after its third-quarter earnings and new subscriber numbers released late on Monday beat expectations.
Harley Davidson shot higher as its third-quarter revenue beat forecasts and the company announced plans to reorganise and cut down its workforce.
Johnson & Johnson bucked the trend, ending weaker despite stronger-than-forecast quarterly results.
On the macroeconomic front, investors digested data showing inflation rose in line with expectations in September due to a rise in housing and energy prices.
The consumer price index climbed 1.5% year-on-year, its biggest yearly rise since October 2014 as expected by analysts, following a 1.1% increase in August.