Earnings fall at the AA, PZ Cussons performs in line

London open

The FTSE 100 is expected to open 0.09% lower on Wednesday, having closed up 0.66% at 7,507.56 on Tuesday.

Stocks to watch

The AA confirmed that profit margins had moved into a lower gear in the first half of the year as the roadside assistance group increased investment as part of a new strategy. While revenue in the six months to 31 July of £480m was up 2% on a last year, underlying earnings before interest, tax, depreciation and amortisation fell 17% to £161m, with earnings per share plunging 36% to 6.5p. This was in-line with what directors said last month and left the group on track for to produce trading EBITDA of £335-345m for the full year.

PZ Cussons said first-quarter trading was in line with expectations as growth in Europe and Asia offset problems in Nigeria. In a trading update the maker of Imperial leather soap said its performance in the three months to the end of August was supported by new products and tight cost control.

Elementis on Wednesday said production at its US Chromium facility in North Carolina had been disrupted as a result of Hurricane Florence, although the impact on 2018 earnings would be “modest”. The specialist chemical company said flooding had stopped output, but added that the factory had not sustained any significant structural damage.

Closed-end investment fund Vietnam Enterprise Investments announced its reviewed interim results for the six months ended 30 June on Wednesday, reporting a fall in its net asset value per share of 3.6$ to $6.81, trailing the VN index by 1.1%. The FTSE 250 firm’s net asset value was down 1.2% in sterling terms to £5.16, while its share price slid 5.1% and the share price discount widened to 18.5% from 15.3%. It launched a share buyback programme in June, repurchasing 1.34 million shares during the half-year.

Newspaper round-up

Delays of only half an hour at UK ports and the Irish border would risk one in 10 British firms going bankrupt, according to a report laying bare the severe risk to the economy from no-deal Brexit. According to the Chartered Institute of Procurement and Supply (CIPS), failure to reach a deal with Brussels before March could trigger massive queues of trucks at British borders from a vast increase in paperwork and checks to clear customs. - Guardian

David Davis has accused Theresa May of being disingenuous in her claim that there is no viable alternative to her Chequers blueprint for Brexit. In a letter to The Times today, the former Brexit secretary hits out at the “constant drum beat” from Downing Street that the government’s proposals for a deal with the EU represent the only realistic plan on the table. - The Times

Around 30,000 Ryanair customers will suffer cancellations this Friday after cabin crew across six European countries launched a mass walkout. The Irish airline has cancelled 190 planned flights following an announcement by staff from Spain, Belgium, Holland, Portugal, Italy and Germany to strike. - Telegraph

US close

Stocks on Wall Street finished broadly lower on Tuesday amid quieter trading, as investors held their breath ahead of the Fed’s monetary policy decision on Wednesday and continued to react to worsening trade concerns.

The Dow Jones Industrial Average was down 0.26% to 26,492.21 and the S&P 500 lost 0.12% to 2,915.56, while the Nasdaq Composite managed to add 0.2% to 8.007.47.

Traders were by and large closing their wallets ahead of Wednesday’s Fed decision, with most market watchers picking a 25 basis point hike in the central bank’s interest rate target.

“It would be astonishing if the Fed doesn't raise rates today, and Chair Powell is not in the astonishment business; they will hike by 25 basis points,” noted Pantheon Macroeconomics chief economist Ian Shepherdson.

“We expect the dotplot to confirm that most FOMC members expect another hike in December, and we see no good reason to expect any change to the projection for three further hikes next year.”