Wednesday preview: US Mid-term elections, Marks and Spencer in focus

All eyes on Tuesday were expected to be on the results of the US mid-term elections and whether or not they resulted in legislative gridlock on Capitol Hill.

A split Congress, where Republicans controlled the lower chamber, the House of Representatives, and perhaps also the Senate, alongside a Democratic Presidency, historically tended to yield the best results for risky assets, analysts at BofA Global Research said in a research note published on 24 October.

Pointing to a correlation between the US dollar and the S&P 500, over the past decade, of -43%, a rebound in equities was likely to lead to a depreciation in the dollar and to be "especially favourable" for high Beta currencies such as the Australian dollar and the Loonie, they added.

BofA considered a Republican victory in just the House as the most likely scenario, with a sweep of both houses as the next most likely outcome.

Nonetheless, they pointed out that the risk would still exist of spurts of US dollar strength due to the possibility of brinksmanship over government shutdowns or debt ceiling fights.

Other observers pointed to the possibility of those same risks materialising towards spring and summer of 2023.

Their year-end 2023 forecasts for euro/dollar and dollar/yen were 1.10 and 1.35, respectively, against 0.95 and 150.0 at the end of 2022.

While the majority of state elections in 2020 were called by news outlets on election night, several states including Arizona, Nevada and Pennsylvania, took between 4 and 9 days to be called.

Even so, this time around some observers believed that the results would likely be known by the end of the day on Tuesday US time.

Those three states were now considered to be key for deciding control of the Senate.

Ahead of Marks & Spencer's third quarter results, Michael Hewson, chief market analyst at CMC Markets UK, said pessimism over the looming slowdown in consumer spending seemed "somewhat overdone".

The reason? The changes put in place over the past few years by the fashion and food retailer's previous boss, Steve Rowe.

According to Hewson, M&S was now "a very different animal from the business two to three years ago".

On that note, he highlighted M&S's recent acquisition of food logistics provider Gist so as to streamline its food supply chain operation.

Furthermore, during the previous month the company had announced an accelerated timeline for closing some of its main stores and to open more food halls.

Wednesday 09 November

INTERIMS

Biffa, Marks & Spencer Group, Norcros, Volex, Watches of Switzerland Group , Workspace Group, Workspace Group

QUARTERLY PAYMENT DATE

BlackRock Latin American Inv Trust

QUARTERLY EX-DIVIDEND DATE

Honeywell International Inc., INTERNATIONAL BUSINESS MACHINES CORPORATION COM STK USD0.20 (CDI), Seplat Energy (DI)

INTERNATIONAL ECONOMIC ANNOUNCEMENTS

Crude Oil Inventories (US) (15:30)

MBA Mortgage Applications (US) (11:00)

Wholesales Inventories (US) (15:00)

Q3

Atalaya Mining, Georgia Capital

FINALS

Smiths News , Smiths News , Versarien

EGMS

Baker Steel Resources Trust Ltd.

AGMS

Hays, JPMorgan Emerging Markets Inv Trust, Powerhouse Energy Group

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Conduit Holdings Limited Com Shs (DI), Taylor Wimpey, The Gym Group