- FTSE 100 slumps as stronger pound weighs
- EasyJet swings to £1.3bn loss
- US market pull back from record highs
- Foreign takeover rules could lead to ‘economic nationalism’, bosses warn
- Russell Lynch : At least Cummings realised things need to change. Does Boris?
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- Telegraph Fantasy Fund Manager
That's all from us today. Here are some of our top stories to keep you going:
- Retailers losing £2bn a week in lockdown
- Cerberus makes swoop for Co-op Bank
- London losing listed companies faster than most of Europe
- Voucher glut means EasyJet owes flights to up to 5m passengers
- EU budget battle is 'a serious hiccup' for region's recovery
Thanks for joining and see you again tomorrow!
Oil dips lower
Oil maintained losses after an OPEC+ committee meeting ended without a concrete signal that producers will reverse plans to increase output in January.
Bloomberg has more:
Futures dropped as much as 1.9pc in New York on Tuesday. OPEC+ said oil producing countries must be ready to act when the group gathers for its next full meeting in two weeks after a panel of ministers met this week.
The group had been discussing postponing an output increase by three to six months. Yet, Saudi Energy Minister Prince Abdulaziz bin Salman said the market is too fluid to make a decision on the cuts now.
In Asia, where consumption has recovered substantially from Covid-19, refiners have been snapping up barrels from the Middle East, US and Russia.
In Europe and the US, a surge in coronavirus cases has led to tougher restrictions limiting movement and consumption.
Tesla etc lobby for 100pc electric vehicles
Tesla, Uber, utility giant Southern and others are lobbying for 100pc electric-vehicle (EV) adoption by 2030, according to a statement on Tuesday.
The Zero Emission Transportation Association - of more than two dozen suppliers, manufacturers and EV charging firms - is calling for policies like consumer incentives and emissions targets to accelerate the shift to EVs.
It also wants more investment in charging infrastructure.
SEC pushes ahead to delist Chinese firms
The US Securities and Exchange Commission (SEC) is doubling down on plans that threaten to kick Chinese companies off American stock exchanges.
The SEC plans to propose a regulation by the end of the year, that would lead to the delisting of firms for not complying with US auditing rules, according to a report by Bloomberg.
Officials have been moving quickly on a rule since August, when a working group of the president urged the regulator to pass new restrictions that could take effect as soon as 2022, it said.
At issue is China’s refusal to let inspectors from the Public Company Accounting Oversight Board review audits of Alibaba, Baidu and other firms that trade on US markets. It gained urgency after this year's accounting scandal at Luckin Coffee.
US retail sales growing at slowest pace in six months
Total US retail sales grew 0.3pc in October, compared to a month earlier, in the slowest pace in six months according to the Commerce Department.
It suggests consumers are more hesitant amid a surging pandemic and lack of fresh federal stimulus. Bloomberg economists had estimated a 0.5pc increase.
Consumer spending accounts for two-thirds of the US economy. November and December could prove tougher with states and cities reimposing restrictions to contain coronavirus.
Tesla soars on S&P nod
Shares of Elon Musk's Tesla soared almost 13pc higher just after the Nasdaq open, after the firm joined the ranks of the S&P500 list.
The spike lifted Mr Musk's fortune by $15bn to a net worth of $117.5bn, according to the Bloomberg Billionaires Index, making him poised to overtake Facebook’s Mark Zuckerberg to become the world’s third-richest person.
Tesla has pared some gains through morning trading, but remained over 6pc higher just before midday in New York.
Vantage plans investor windfall after Vodafone spinoff
The mobile towers giant being spun out of Vodafone has promised bumper shareholder payouts in its first year as it fires up plans for growth.
My colleague Ben Woods reports:
Vantage Towers expects to offer dividends worth €280m (£251m) next year after listing in Frankfurt.
The update came as Vantage gave its first presentation to investors and unveiled a €1bn war chest for takeover targets.
The company is poised to become a challenger to Cellnex, the Spanish masts company that has been buying up European telecoms infrastructure.
Vantage, which has 68,000 towers spread across nine European companies, posted adjusted profits of €413m for the six months to September on revenues of €479m.
Chief executive Vivek Badrinath said it was already one of the backbones of Europe's digital transformation and would play a key part in upgrading mobile networks to ultra-fast speeds.
Johnson to cut a quarter of its workforce
A quarter of the workforce will be gone by the end of the year at Johnson Service Group, the company which provides linens to hotels and restaurants and workwear across wider industry.
My colleague Alan Tovey writes:
The collapse in demand for its tablecloths, towels and bedsheets among the catering and hotel sectors caused by pandemic lockdowns means Johnson is reducing employee numbers by 1,550.
Johnson said its division which serves the hospitality sector will have a workforce of 2,450 by the start of 2021, down from 3,800 a year before, and its workwear operations will have 200 fewer roles.
In a trading update the company said demand from hotels and restaurants in September was 55pc of normal levels, up from 45pc the previous month as the economy recovered from the first lockdown.
However, as new controls were introduced in October they fell back to 45pc and Johnson warned the outlook for the rest of the year is dependent on what happens after the current lockdown eases.
Global trade restrictions surge in pandemic
Trade restrictions on products such as medical goods – have proliferated during the pandemic as countries become more protectionist, experts have warned.
My colleague Lizzy Burden reports:
Analysis by the Global Trade Alert of more than 2,000 policy interventions such as tariffs or subsidies taken during the first 10 months of 2020 showed only about a quarter of those measures benefited countries’ trading partners.
That total was up 74pc from the same period last year, and 147pc higher than the average for 2015-2017 – before the US-China trade war.
“Keeping goods – including medical kit, medicines, and hopefully soon vaccines – flowing across borders is essential during a pandemic,” the report said.
“Governments may see themselves as responsible solely for the wellbeing of their own citizens but that doesn’t negate the fact that their actions can harm the health as well as the livelihoods of citizens of trading partners. This year has witnessed policy interventions that both sicken-thy-neighbour and beggar-thy-neighbour.”
Boss of Ninety One hits out at 'crazy' plans to restrict foreign takeovers
The boss of one of the UK’s biggest fund managers has hit out at the Government’s “crazy” plans to restrict foreign takeovers over national security concerns, warning that it could undermine Britain’s competitiveness.
My colleague Michael O'Dwyer reports:
Hendrik du Toit, chief executive of Ninety One, said: “The UK is busy prejudicing the best position in the world. It has the position of being the open, honest market.”
The National Security and Investment Bill, published last week, will require investments by foreign firms in 17 sectors to be cleared by ministers before they can go ahead.
Deals in the wider economy could be “called in” and declared void up to five years after they are completed sparking concern that the Government has overreacted in tackling fears that Russia and China are gaining a hold on the UK’s critical infrastructure and intellectual property.
Mr du Toit said that while economies like the US and China are big enough to be able to thrive even with limits on foreign investment, the UK should not follow their approach beyond what is necessary to protect vital assets such as nuclear reactors.
He said: “If I had any advice to Boris Johnson or the UK Government, it is to take a contrary position and say we will be the open, fair marketplace [and] free trading nation of the world.”
Mr du Toit made his comments as Ninety One, the asset management arm of Investec until its demerger in March, reported the pre-tax profits rose 3pc to almost £95m in the six months to September.
UK-Mexico trade talks hit standstill
A UK-Mexico trade deal is unlikely to be signed before the end of the Brexit transition period, raising fears of a hike in tariffs.
My colleague Lizzy Burden reports:
Unless the Department for International Trade (DIT) is able to secure a rollover of the EU-Mexico trade agreement, Britain will trade with Mexico on World Trade Organization (WTO) terms from Jan 1.
However, sources told Politico the two sides had reached an impasse in negotiations.
Without an agreement, the British automotive sector would be especially hard hit as exports of cars and trucks to Mexico, worth £160.4m last year according to HM Revenue and Customs data, would face 20pc tariffs.
Last year the UK imported £50.2m worth of parts, components and accessories from Mexico, which would also face levies without a deal.
Mike Hawes, chief executive of the Society of Motor Manufacturers and Traders, said: “Given the UK will be an independent trading nation at the end of the year, it is essential that all sides swiftly conclude an agreement – ahead of the end of the transition period – to ensure automotive businesses are not hit with WTO tariffs, a situation that would damage UK competitiveness at the worst possible moment.”
Troubled Co-op Bank confirms takeover talks with mystery buyer
The Co-operative Bank has confirmed it is in sale talks with a mystery buyer just months after its fifth chief executive in less than a decade quit.
My colleague Lucy Burton reports:
The troubled lender said on Tuesday that it had been approached by a "financial sponsor with knowledge and experience of investing in European financial services businesses" that wanted to buy the bank. It said it was weighing up the move.
A takeover of the Manchester-based bank, which has been in recovery mode since 2013 when staff found a £1.5bn hole in its balance sheet, has been on the cards for years.
After a failed attempt to find a buyer in 2017, the lender agreed a £700m rescue deal with its US hedge fund owners, four of whom were involved in its 2013 bailout. The plan meant it cut historic ties with the wider Co-operative Group.
Just over a year later, it is believed to have approached Barclays, but talks never progressed beyond the exploratory stage.
Asda sales growth slows
Asda's sales growth fell in the third quarter despite a continuing online surge.
The Walmart-owned supermarket said life-for-like sales were 2.7pc higher in the three months to Sep 30, lower than the 3.8pc growth for the previous quarter.
Online sales soared by 72pc and operating profit also jumped as costs fell.
The UK's third-largest supermarket is being sold to petrol station forecourt kings the Issa brothers and private equity group TDR Capital in an $8.8bn deal.
Bank dividend ban should stay, says top regulator
A top regulator has argued that the bank ban on shareholder payouts should remain in place as it was too early for bankers to take a "victory lap" over their response to the pandemic.
Our banking editor Lucy Burton reports:
Fund managers and bankers have been pushing for regulators to lift the ban on dividends following a strong third quarter. The restriction was imposed by global regulators at the start of the pandemic so banks were in a better position to support households and businesses.
However the head of the Basel committee of regulators, Carolyn Rogers, told the Financial Times that lenders must be patient as the scale of loan losses was still unclear and it was "their job" to absorb shocks.
"Banks are not pulling back credit like they did [during the 2008 financial crisis] to save themselves at the expense of the broad economy," she said.
"That’s a good thing - we can give them a gold star and a pat on the back, but we should also remember this is part of their job.
Lufthansa axes free in-flight food
Lufthansa has become the latest airline to scrap complimentary inflight meals for short-haul flights as it moves to cut costs amid the aviation industry's deepening crisis.
The German carrier, one of the last in Europe to offer free food and drink to economy class passengers, said it will launch a new paid menu from next spring for both short and medium-haul routes.
Christina Foerster, head of customer services at the airline, said: "Our current snack offer in Economy Class does not always meet the expectations of our guests. The new offer was developed on the basis of feedback from our customers."
It comes after rivals axed inflight meals in recent years as the golden age of air travel came to a halt.
In 2017, former British Airways boss Alex Cruz culled meals on short-haul flights within a month of taking the top job as he waged war on BA's costs.
The buy-on-board service will be launched on the group's regional carriers, Austrian Airlines and SWISS, before being introduced on Lufthansa flights, the airline said.
Market reaction: 'Vaccine could take months to roll out'
The FTSE 100 is continuing to retreat and is currently trading 0.7pc in the red.
David Madden, market analyst at CMC markets, says:
Stocks have handed back a little of yesterday’s strong gains as dealers are content to cut back on some of their exposure to equities.
It is very encouraging to hear that great strides are being made on the coronavirus front but even if the drug is approved, it could take months to get rolled out. Broadly speaking, the stocks that outperformed yesterday – airlines and pub groups – are in the red today.
BP and Royal Dutch Shell are impacting the FTSE 100 due to their relatively large weightings, even though the underling oil market is only slightly in the red. OPEC+ will be in focus as the oil producing nations might give us an indication about what decision they will come to next month with respect to altering production.
Shares in Intermediate Capital rise after profit surge
Shares in Intermediate Capital Group bounced this morning after the investment firm revealed a surge in first half profits on the back of “exceptional” investment activity since June.
My colleague Michael O'Dwyer writes:
Intermediate Capital invests in a variety of assets, including private debt, equity and infrastructure. The firm reported a 29pc rise in pre-tax profits to £198m for the six months to September.
It was buoyed by a 58pc rise in profits to £108m at its own investment company driven by the unwinding of unrealised losses on the value of its investments as asset prices recovered following the first wave of Covid-19.
Intermediate Capital began life 31 years ago and focused mainly on investing funds from its own balance sheet. About 95pc of its €46.1bn (£41.3bn) assets under management are now run for third parties.
Analysts at Peel Hunt predicted the figures would spark major upgrades in expectations for the company’s current financial year.
Tesla to join S&P 500 next month
Elon Musk's Tesla is set to join the S&P 500 next month in a move that will greatly broaden its investor base.
Bloomberg has the details:
The announcement that Tesla will enter the S&P 500 on Dec 21 follows months of speculation, and one temporary setback, after the stock failed to make the cut during the index’s quarterly rebalancing in early September.
The anticipation has helped drive a nearly fivefold rally in the stock this year to almost $390bn, making the electric vehicle pioneer the biggest company ever to be added to the gauge. It will also be one of the index’s most influential constituents with a weighting that falls around those of Berkshire Hathaway, Johnson & Johnson and Procter & Gamble.
It’s so big that S&P Dow Jones Indices said it is seeking feedback from the investment community to determine if Tesla should be added all at once or in two separate pieces. The company that Tesla is to replace in the index will be named later, the index provider said.
French bars and restaurants could remain shut until mid-January
It could be a dry Christmas across the Channel, as French officials are considering keeping bars and restaurants shut until mid-January, according to local media.
The government closed non-essential businesses at the end of October as the and planned to reopen shops on Dec 1, however PM Jean Castex made clear that that didn’t apply to bars and restaurants.
Sales at Imperial Brands climb despite 'difficult year'
Tobacco giant Imperial Brands has revealed that sales lifted higher over the past year as solid demand for tobacco offset weakness in its e-cigarette operations.
PA has the details:
It reported that group revenue had increased by 0.8pc to £7.98bn for the year to September 30, after tobacco revenues rose by 1.8pc.
Nevertheless, adjusted operating profits declined by 5.7pc to £3.5bn, as the firm was impacted by lower profit on tobacco due to "Covid-19 and regulatory costs".
Stefan Bomhard chief executive of Imperial, said: "Although this has been a difficult year, the resilience of our tobacco business and the measures we have taken to improve our NGP (next generation products) operations reinforce my confidence in the future potential of the business.
"With a more disciplined focus and better execution we can realise significant value for our stakeholders over time.
"My first months have been focused on engaging with employees, consumers and customers and leading the strategic review of the business.
"What I have seen to date confirms my view of the group's solid foundations."
EasyJet swings to £1.3bn loss
EasyJet swung to mammoth annual loss and said it would fly no more than a fifth of its usual schedule in the last three months 2020.
The airline posted a £1.27bn loss compared to a £430m profit for the same period last year – its first ever full-year loss in its 25-year history – while revenues collapsed by more than half to £3bn.
The low-cost carrier cut its flight schedule again, saying it expects to fly no more than 20pc of planned capacity for the first quarter of its financial year due to ongoing travel restrictions.
In September, easyJet said it would fly "slightly less" than the 40pc capacity it expected in the final three months of the year.
After failing to enjoy a meaningful summer recovery when Covid-19 was suppressed in many regions, the sector has been hammered by a second wave of the virus, with governments advising against "non-essential" travel.
Chief executive Johan Lundgren said: "While we expect to fly no more than 20pc of planned capacity... maintaining our disciplined approach to cash generative flying over the winter, we retain the flexibility to rapidly ramp up when demand returns.
Agenda: FTSE set to fall
Good morning. The FTSE 100 is set to fall after Monday's Moderna rally as European countries continue to impose tighter Covid restrictions.
German Chancellor Angela Merkel urged people to limit public and private gatherings, while Sweden imposed its toughest restrictions yet as intensive care beds started to fill up.
“Don’t go to gyms, don’t go to libraries. Don’t host dinners, don’t host parties. Cancel,” Prime Minister Stefan Lofven said.
5 things to start your day
1) Foreign takeover rules could create ‘economic nationalism’: A top business lobby group warns new security laws restricting foreign takeovers risk a “chilling effect” on investment in the UK economy.
2) Moderna briefed market-moving jab data before public release: The US drugmaker briefed journalists on data that its jab is almost 95pc effective against Covid, almost an hour before publishing the details.
3) 'Zoom boom' helps Japan escape recession: The decision to shun strict lockdown bore fruit for Japan as its economy surged out of recession in the third quarter, helped by a “Zoom boom”.
4) Airbnb reveals substantial losses ahead of $30bn IPO: Airbnb revealed it has lost more than $1.7bn (£1.3bn) over the last three years as it filed for the most anticipated US stock market float of the year.
5) Tesla shares soar as it joins the gilded ranks of the S&P 500: The electric car maker has been joined America's blue-chip index after reporting five consecutive quarters of profit, sending shares up 14pc.
What happened overnight
While most Asian benchmarks were little changed, energy and financial stocks pushed higher, and health care and communication shares lagged. US futures retreated after the S&P 500 closed at an all-time high as Moderna Inc.’s vaccine was shown to be 94.5pc effective.
Stocks poised to benefit from a reopening, such as cruise lines and air carriers, were among the day’s best performers on Wall Street. European futures slid.
Coming up today
Corporate: Intermediate Capital, Telecom Plus, Homeserve, Big Yellow Group, Assura, Experian, Ninety One (Interim result); Imperial Brands, Petra Diamonds, Easyjet (Full year); Aggreko, Energean (Trading statements)
Economics: Retail sales, industrial production, NAHB housing market index (US); credit card spending (UK)