Wall Street rises as Trump talks on trade policy

It was mixed day for the market overall, with the FTSE 100 gaining ground amid a European advance, while the mid-cap FTSE 250 was flat throughout the session.

Investors appeared to be looking on the bright side ahead of a highly-anticipated speech by Donald Trump which started after markets closed in Europe.

On Wall Street stocks rose as investors measured the likelihood of a partial trade deal between America and China and the dollar similarly advanced.

Donald Trump has said that China "is dying to make a trade deal" and that the US is closo to signing Phase One trade deal very soon.

He added that Washington will only accept a deal "if it is good for the US and US workers".

President Trump told the Economic Club of New York:

• “We have delivered on our promises and exceeded our expectations by a very wide margin."

Trump said he reversed policies imposed by his predecessors that restrained the economy. He faulted regulations and trade deals advanced by other presidents and said the “political class sold out American workers.” He also took credit for the 2017 GOP tax cuts that Democrats said benefited the wealthiest Americans.

• “At the heart of our economic revival is the biggest tax cut and reforms in American history.” 

• Donald Trump has said that the Fed are "far too slow" with rate cuts and that he wants negative rates
• He added that the Fed is putting the US at a ‘competitive disadvantage’ compared with other countries
• Corporation tax rate "could go lower"

Revenue at New Look fell 13pc to £523.8m in the first half of the year as the clothing retailer battled poor consumer spending and bad weather.

The company, which is two years into a transformation plan, narrowed its losses to £11.2m, compared to a loss of £41.9m during the period. Like-for-like sales in the UK and Ireland dipped 7.4pc.

Sofie Willmott of GlobalData says New Look's actions "have not been enough to drive growth and steal share from stronger rivals such as Zara and Primark".

"While the space is highly competitive with online pureplays and Primark having a stronghold on value, fast fashion, New Look must also ensure it has commercial, fashionable and wearable items amongst its range to create interest and entice customers back. New Look is at risk of going down the same road as M&S by offering a range that is too safe."

Stocks in Europe closed higher on speculation that the US President will defer a tariffs decision on European-made cars.

London's blue-chip index finished 0.50pc at 7,365.44, while the FTSE 250 crept 0.08pc ahead, closing at 20,427.17. In the eurozone, the CAC and DAX closed 0.44pc and 0.65pc ahead, respectively.

"Optimism is on the rise ahead of President Trump’s speech at 5pm, where the US leader will set out his position on trade," says David Madden of CMC Markets. He adds: 

"Dealers are cautiously optimistic that Donald Trump will defer his decision to impose tariffs on EU vehicles. Car manufacturers in Europe have been fearful he will give them the China treatment, but recently the sounds from the White House haven’t been aggressive in relation to the EU. The Donald is known to be unpredictable, so traders are not overly bullish on the likes of Fiat, Daimler or Volkswagen on the run up to the announcement."

Royal Mail has lost its appeal to overturn a £50m fine from Ofcom for breaching competition law, the Competition Appeal Tribunal has revealed.

The penalty, first announced in August 2018, related to the delivery firm “abusing its position” by “discriminating” against rival Whistln in 2014, then known as TNT, for delivering letters.

An Ofcom spokesman said:

"We found that Royal Mail pursued a deliberate strategy of pricing discrimination against Whistl, which was its only major competitor for delivering business mail.

"Royal Mail had a special responsibility to ensure its behaviour was not anti-competitive.

"We hope that our fine, which has been upheld in full by the Tribunal, will ensure that Royal Mail and other powerful companies take their legal duties very seriously."

With markets in London about to close, and US investors gearing up for what could be a rollercoaster speech (or a total anticlimax, depending on how Donald Trump approaches it), my colleague LaToya Harding is taking the reins to help make sense of things from here. I’ll be back tomorrow! Thanks for following along.

There are plenty of ways things could spin during Donald Trump’s speech, which is less than an hour away. Here are some of the key economic points he could hit:

• Trade: The big topic, which every investor will be watching out for, is trade with China and the EU. The US President could take this opportunity to wind down tensions with China, or ramp them up with Europe.
• Stocks: The President is almost certain to tout the US stock market, which is pushing its way deeper into record high territory. That may not be enough, however, and we are likely to hear about...
• The Fed: Complaints about Mr Trump’s economic nemesis Jerome Powell are pretty likely. The President wants Mr Powell, chair of the Federal Reserve, to slash interest rates lower in a bid to further pump up the economy.

 Here are some of the day’s biggest business stories:

• Burger King chooses Unilever for meat-free Rebel Whoppers: Unilever has won a contract with Burger King to make a plant-based Rebel Whopper that will be sold in 2,500 restaurants in Europe. 
• Philip Hammond gets first job a week after quitting the Commons: Philip Hammond has been appointed to the board of an Irish packaging maker just a week after announcing he would not stand for re-election as an MP. 
• FTSE 100 software firm Aveva returns to profit: Aveva returned to profit as the industrial software developer continued to integrate Schneider Electric following a tie-up with the French firm last year. 

So, time to focus on the day’s main event: Donald Trump’s highly-anticipated speech at the Economic Club of New York, which will kick off at 5pm GMT.

Investors will be closely watching the lunchtime speech for any clues on the next move in the trade war between the United States and China, after the US President dismissed reports that a phased roll-back of punitive tariffs is in the pipeline.

If Mr Trump takes a hardline stance, keeping tariffs in place, it is likely to prompt a breakdown of current negotiations with the Chinese, and roil the markets.

There are a couple of urgent questions facing the President:

• He has until tomorrow to decide whether to slap extra duties on cars and auto parts – which would hit the EU
• A new a location needs to be selected for a meeting with Chinese President Xi Jinping, after Chile cancelled a summit that would have served as a meeting point for the two leaders.

He is likely to take the opportunity to big up the US economy, as the stock market pushes to new highs:

My colleague Laura Onita has a full report on this morning’s B&M results. She writes:

B&M has vowed to maintain its assault on the retail market despite profits at the discounter chain tumbling by 70pc, its boss said.

Simon Aurora, who set up the business with his brothers Bobby and Robin in the late 1970s, said: “We're in the same fast lane as Aldi, Lidl and Primark. The march of the discount retailers continues unabated.

“Shoppers are not embarrassed to shop smart and save money. They are tired of high-low pricing and promotional activity by retailers - they are much more drawn to everyday low prices.” 

The chain plans to open more than 300 new stores over the next five to six years, bringing the total to 950. 

• Read more here: B&M vows to keep expanding despite plunging profits

Europe’s stock indices are slightly extending their gains, with the FTSE 100 continuing to stay slightly ahead of the pack. 

It’s a pretty mixed picture on the FTSE 250 today, with just over half London’s mid-caps slipping on the index. That has put things just south of flat.

 Here are some of the day’s biggest stories from the Telegraph’s Money section:

• How 20-somethings can invest in the Amazon and Netflix of tomorrow – for a fraction of the price
• The evidence that shows why new drivers shouldn’t bother with ‘Pass Plus’
• The English town where residents are crammed into the smallest amount of living space

Here’s more on ITV’s morning trading update, via my colleague Simon Foy:

The Rugby World Cup helped boost ITV's advertising take in the third quarter as the broadcaster stuck to its full-year guidance despite a decline in overall revenue.

Ad revenues edged up 1pc for the three months to September, bringing the decline for the first nine months of the year to 3pc. The full year figure is expected to be about 2pc lower.

Total revenues declined 2pc to £2.2bn for the nine months compared with the same period last year. 

• Read more here: Rugby World Cup lifts ITV’s advertising revenue

My colleague Tim Wallace has a full report on this morning’s jobs figures. he writes:

Britain’s jobs market appears to be coming off the boil as the number of people in work slipped in the three months to September, led by the biggest ever drop in employed EU nationals. 

Pay growth also slowed during the period. However, the official figures contained some good news for the labour market – unemployment dipped, taking the jobless rate back to 3.8pc. It has not been lower since 1974.

It means 32.75 million people are in work according to the Office for National Statistics (ONS), down by 58,000 from July’s all-time high.Compared with this time last year employment is up by 323,000.

• Read more here: Jobs market wobbles as number of EU nationals in work plunges

It’s been a pretty tepid day for sterling, which hit a six-month high against the euro yesterday after Brexit Party leader Nigel Farage said it would not stand candidates against the Conservatives in Tory-held seats.

The currency is flat against the euro, despite a slightly fall earlier today, and down gently against the dollar.

 Fears about the future of Nissan’s giant Sunderland plant have been heightened after the Japanese carmaker reported plunging profits and slashed its full-year forecast, my colleagues Alan Tovey and Simon Foy report. They write:

Half-year net profits dived 73pc to 65bn yen (£464m) on revenues 9.6pc lower at 5 trillion yen, with the strong yen exacerbating the company’s problems. 

Nissan’s total vehicle sales during the six months were down 6.8pc at 2.5m. This was a steeper fall than the global market, which declined 5.9pc over the period as the industry faces wider problems from slowing demand, leading to intense competition between manufacturers.

The company – which is still reeling from the ousting of boss Carlos Ghosn last year – was even harder hit in Europe, where sales fell almost a fifth to 265,000, putting its UK operations in the spotlight.

• Read more: New doubts for Sunderland as Nissan’s profits collapse

With the main event still a Donald Trump speech this afternoon (more on that later), it’s fairly quiet out there. Here’s some more expert reaction to this morning’s jobs figures:

Investec’s George Brown says the numbers show the Bank of England’s Monetary Policy Committee predicted the trajectory of the jobs market correctly:

Overall, today’s release provides further evidence that the labour market is indeed loosening, as the Bank of England’s MPC contemplated in November. Of particular concern is the surprise easing in pay growth, which has long been cited as justifying a tightening in monetary policy.

But though we would caution against reading too much into one outturn, at the same time we note that surveys point to a further deterioration in labour market conditions. Indeed, our own expectation is that the unemployment rate will drift higher to stand modestly above 4.0pc in 2020, albeit with the jobs market overall remaining tight by historical standards.

PwC’s Jing Teow added:

This outlook is consistent with business surveys in October, pointing to a continued decline in output and employment across the private sector. More worrying is the trend of flatlining services output, driven by falling new orders as a result of Brexit-related uncertainty, which has driven further reductions in workforce numbers. Should this uncertainty continue without any clear resolution into next year, the employment picture may weaken with jobs growth undermined by weak business sentiment.

Capital Economics’s Andrew Wishart said the figures remove the immediate need for a cut to interest rates by the Bank of England:

After GDP growth disappointed expectations yesterday, the smaller than expected fall in employment in the three months to September was something of a relief. At the margin, the figures reduce the immediate need for the Monetary Policy Committee (MPC) to cut interest rates and might give it the luxury of waiting until it is clearer how Brexit will pan out before making its next move.

Shares in industrial software firm Aveva touched all-time highs earlier, after the company posted better-than-expected profit before tax for the first half of the year.

The company swung from a £5.5m loss during the first half of 2018 to generate profits of £24m for the six months to the end of September.

 Chief executive Craig Hayman said:

Looking ahead, we see strong demand for digitalisation and industrial software within the industries we serve and remain confident in the outlook.

Jefferies analysts said:

Aveva continues its transition towards a subscription model, which we expect to be long-term beneficial to revenue and profitability.

Land Securities, one of Britain's biggest property companies, swung to a pre-tax loss after a fall in the value of its retail assets dragged it into the red, my colleague Simon Foy reports. He writes:

The owner of Bluewater in Kent and One New Change in the City fell to a £147m loss for the six months to September compared to a £42m profit for the same period last year. 

Revenue profit, its measure of underlying pre-tax profit, rose £1m to £225m. 

The loss was mostly due to a £368m plunge in the value of its portfolio, driven by an 11.1pc plunge in the value of its retail parks. 

• Read more here: Retail writedowns push Land Securities to £147m loss

The group’s share price is fairly flat today:

ITV said it is on track to deliver within its guidance for the full year, after successes for several of its dramas and big viewing figures for the Rugby World Cup final.

In an update to the City, chief executive Carolyn McCall said the broadcaster was “making good progress in executing our strategy”, despite an “uncertain” economic environment.

The company said it had reached its target of 30m registered users on its ITV Hub video-on-demand platform by 2021 ahead of schedule.

Its total external revenues for the first nine months of the year fell slightly, down 2pc from £2.26bn for the same period last year to £2.21bn.

The company’s shares are up narrowly this morning:

Here’s more on those Vodafone numbers, by my colleague Hasan Chowdhury:

Vodafone has raised its annual profit guidance despite posting a €1.9bn loss for the six months to September that was largely due to problems in India. 

The Supreme Court of India last month ruled in favour of a government demand to pay at least $4bn in levies and interest within three months. 

Vodafone Idea, its joint venture with Idea Cellular, said at the time that the “judgement has financial implications, which we are reviewing”.

Chief executive Nick Read warned on Tuesday that the company could pull out of India due to the “critical” situation.

• Read more here: Vodafone raises profit outlook despite €1.9bn loss

Reacting to the productivity figures also released by the ONS this morning, which show output per hour has fallen for the longest stretch since 2009, the Economist Intelligence Unit’s Matthew Oxenford said:

There have been signs that the UK has been reaching full employment for months now - the number of working age people in the labour force was reaching 80pc, which when you account for the number of students, non-working parents and other individuals who choose to stay out of the labour force, is approaching its upper limit.

At the same time, labour productivity growth in the UK has remained incredibly low by international standards. So the ability for labour force participation and wages to continue growing indefinitely has always been limited. 

The Indian owner of Jaguar Land Rover has approached BMW and China's Geely about potential partnerships in a bid to relieve pressure on the hard-pressed British carmaker, according to reports, my colleague Simon Foy writes. He adds:

Tata Group has said it is open to new partners for JLR to cut costs and share the burden of investing in electric vehicles. The talks are reportedly in an early stage and Tata could still approach other potential partners, Bloomberg reported. 

Tata and BMW declined to comment, while Geely said it has not been in talks with Tata or JLR.

A partnership with a Chinese carmaker could help boost JLR's sales in Asia, while a tie-up with BMW would build on an existing alliance to develop engines and electric-drive technology.

• Read more: Jaguar owner ‘makes overtures to BMW and Geely’

Electrical products distributor Electrocomponents is the biggest faller on the FTSE 250 today, dropping more than 12pc.

The group was forced to write down £10.4m of assets linked to problems at British Steel, which was last night saved by Chinese group Jingye as part of a £1.2bn rescue deal.

It also said it had incurred “substantial” labour-related restructuring costs. Revenues rose by 4.5pc in the six months to the end of September, but its operating profit slipped by 2.1pc.

Chair Peter Johnson said:

The first half saw good revenue growth and strong market share gains in spite of an uncertain market backdrop. We will continue to drive share and actively manage our operating costs while increasing investment in strategic initiatives to position the business for the significant longer-term market opportunity.

Here’s some reaction to this morning’s ONS jobs data.

Pawel Adrjan, economist at Indeed, said:

While the economy as a whole dodged the recessionary bullet by returning to growth in the third quarter of the year, the jobs market is slowly succumbing to sliding business confidence.

Britain’s job creation boom is running out of steam and the pace of wage growth has slowed. The average worker’s paypacket is now growing at 3.6% a year; less than the brisk 3.9% recorded in the second quarter of the year, but still more than double the rate of consumer inflation.

But while this is good news for those already in work, the data is less encouraging for jobseekers. The total number of vacancies has fallen to its lowest level for two years. But with the unemployment once again dipping to a 45-year-low, employers in many sectors are still in competition for the best hires.

The Institute for Directors’ Tej Parikh added:

The UK jobs market remains a source of resilience for the UK economy, but it is showing more signs of strain.

With so many in work there has been a lift to household incomes, which has supported the economy through a challenging period. However, businesses are now finding it harder to access the talent needed to fill openings, so jobs growth is expected to slow further. Many firms are also putting recruitment plans on ice as wider projects and investments are bottled up by uncertainty. Vacancies are likely to continue falling.

The pick-up in wage growth earlier this year has been a plus, but there is clearly a limit to how high pay packets can go. With many firms facing elevated costs and difficulties raising their productivity game, the margins to raise pay are eroding. A further acceleration in wages now looks unlikely.

In due course (and coinciding with the UK-wide employment news), the Financial Times has announced Deputy Editor Roula Khalaf will take the top jobs as editor upon Lionel Barner’s exit in January (see 9:26am update).

• You can read the FT’s press release here. 

Wage growth momentum appears to be slowing, after years of steady – if inconsistent – increases.

Today’s Office for National Statistics jobs data will inevitably (and perhaps, rightly) be looked at through the prism of Brexit and the General Election. It’s a slightly mixed bag in that regard, with some points the Conservatives might pick up on despite wider signs of growing weakness:

• Employment fell by the most in four years, dropping by 58,000 in the three months to the end of September (taking the employment rate to 76pc).
• Unemployment fell unexpectedly to 3.8pc (the lowest level since the mid 1970s), from 3.9pc.
• Wage growth was weaker than expected, with an increase of 3.6pc versus expectations of 3.8pc.
• Vacancies fell by 11,000 to 814,000, suggesting the jobs market is losing some steam.
• Productivity failed to grow year-on-year for a fifth straight quarter.

Just in: the UK jobs market weakened over the third quarter, with jobs lost, weaker-than-expected pay increases, and a decline in vacancies.

Unemployment fell to 3.8pc, beating expectations that it would remain at 3.9pc.

More follows... 

Quick flash across from one of Britain’s other business news providers: Financial Times editor Lionel Barber has announced plans to step down from the paper in January, after 14 years in charge.

Mr Barber said he expects his successor will be announced “shortly”.

Cautious gains across Europe’s stock markets so far, with the FTSE 100 pushing slightly ahead of its continental peers after a slightly weakening in the pound. 

Shares in DCC, the sales, marketing and support services group, have slipped slightly despite posting a 14.5pc rise in operating profit, which rose from £141.9m to £162.6m despite a slight overall slip in revenues.

The company also announced the acquisition of Ion Laboratories, a Florida-based nutritional products maker.

Chief executive Donal Murphy said:

Notwithstanding the continuing uncertain macroeconomic outlook impacting the UK economy, and the technology business in particular, the group believes that the year ending 31 March 2020 will be another year of good operating profit growth and further development and will be broadly in line with current market consensus expectations.

Jefferies analysts said they expected this morning’s strong results to be offset by currency pressures.

Shares in Vodafone have risen the morning, after the firm raised its profit guidance despite posting a loss for the first half of the year.

My colleague Hasan Chowdhury reports:

Vodafone made a loss of €1.9bn in the six months to September as its push into India was dealt a severe blow by the country’s supreme court. 

Revenue grew 0.4pc year-on-year to €21.9bn for the British telecoms firm, which boosted its full-year earnings guidance following improved performance in regions such as South Africa, Spain and Italy. 

But Vodafone’s debt climbed to €48.1bn euros for the six-month period ended 30 September 2019 as the company contested an Indian court ruling that forces it to pay at least $4bn in levies and interest. 

The group raised its financial guidance for the full year, including lifting its expectations for earnings before interest, taxation, depreciation and amortisation to €14.8bn–15bn, from a prior range of €13.8bn–£14.2bn).

Credit data firm Experian is among the bigger risers of the FTSE 100 today, up about 2.5pc after after reporting a slightly rise in pretax profit for the first half of the year, and raising its guidance for the full year.

The company said pretax profit rose 2pc to $480m during the six months to the end of September, from $470m over the same period the year before.

Chief executive Brian Cassin said:

We now expect full-year organic revenue growth in the 7-8% range, at the upper end of our previous guidance. 

Investors have taken heart at the figures, pushing its share price up:

Shares in B&M are fallen more than 9pc this morning, after the company said it had launched a strategic review of its German operations.

The variety retailer said it had experienced “continued disappointing financial performance” in Germany, which it blamed on “distribution issues and weak sales performance”.

The company said its revenues had increased 12.4pc compared to the first half in 2018, but announced a fall in profit before tax from £98.8m to £96m.

Chief executive Simon Arora said:

We are well placed for the golden quarter in our main B&M UK stores business.

Citi analysts called the results messy, while Liberum said the group had a “good opportunity” in the coming quarter, particularly because its products are fairly resistant to Brexit disruption. 

Premier Foods – the company behind Bisto gravy and Oxo stock cubes – has reported a rise in profit for the first half of the year, after the strong sales of Nissin noodles and the relaunch of Mr Kipling Cakes.

Adjusted pretax profit climbed by 5pc, rising from £30.2m to £31.7m over the isx months to the end of September.

Alex Whitehouse, its chief executive, said:

With a better H1 than planned, we are confident in our expectations for progress in the full year. As we look a little further ahead, and in light of our disciplined and consistent track record of Net debt reduction, we start to see options for our future deployment of cash.

The company’s share price has risen more than 7pc so far this morning:

Good morning. We will find out later today how the UK’s robust jobs market has fared for the three months to September. 

Analysts expect the unemployment and wage growth numbers to remain steady, coming in at 3.9pc and 3.8pc respectively. 

5 things to start your day

1) Ratings agency Moody’s has issued a debt downgrade warning to the entire world on fears that political turmoil from Westminster to Hong Kong poses a threat to the economy. It cut its global sovereign outlook to “negative” from “stable” for 2020, cautioning that “disruptive and unpredictable” politics was worsening the slowdown in growth. 

2) Three charts about Britain’s job market that will scare the Tories: Younger workers bear the brunt as jobs dry up, not all areas have enjoyed a boom, businesses slam brakes on hiring

3) Veteran investor Martin Gilbert has joined Revolut as its non-executive chairman, four months after he was reported to have been in talks with the fintech start-up. The appointment comes after the digital banking business signed deals with Visa and Mastercard to help it expand around the world.

4) How sexist algorithms are shaping our lives - and how to fix them. Humiliatingly for Apple, its revered co-founder Steve Wozniak revealed that his wife’s credit limit was a tenth of his, despite the fact that “we have no separate bank or credit card accounts or any separate assets.

5) Saudi Aramco: The inside story of the world's largest stock market float. For decades, the crown jewels of Saudi Arabia operated much as any oil giant would. But that status quo began to change in 2015.

What happened overnight

Stocks were mixed Tuesday in Asia as investors awaited further developments on the US-China trade front and kept an eye on the situation in Hong Kong. Treasuries recouped some of their recent losses.

Hong Kong shares stabilised after sharp losses on Monday, when escalating violence in the strife-torn city unnerved investors. Stocks ended up higher in Tokyo as US and European futures edged up. Benchmark indexes were little changed in Shanghai, slipped in Sydney, and rose in Seoul. The S&P 500 Index fell for the first time in four sessions in holiday-thinned trading on Monday. New Zealand’s dollar slumped after a weakening in inflation expectations spurred bets on a rate cut.

Investors are on the lookout for any headlines that could point to a first-phase trade deal between the US and China after mixed messages from the White House and delayed meetings heightened concern the negotiations are stumbling.

Coming up today

When Mr Kipling owner Premier Foods appointed a new management team in August, it was a sign the company was taking real steps to revive its fortunes. In the past, the company’s relationship with shareholders has been tumultuous.

In particular, it faced significant criticism over its decision to reject a takeover bid in 2016 – an offer which valued the company at around double the price at which it is current trading. Whether the new team will publish the results of their strategic review remains to be seen – but if they do, they will be hoping their plans go down better with investors.

Interim results: Premier Foods, Aveva Group, Land Securities, Electrocomponents

Trading updates: ITV

Economics: Employment data (UK)  Read our live markets blog here