St. Modwen and WPP pull divi, Imperial Brands unveils new credit facility

London open

The FTSE 100 is expected to open 37 points higher on Tuesday, having closed up 0.97% at 5,563.74 on Monday.

Stocks to watch

St Modwen Properties pulled its dividend and said the board would take a 20% pay cut and would make sure all furloughed employees as a result of the coronavirus lockdown would receive full salary.

Advertising conglomerate WPP said on Tuesday that all of its businesses were now operating well under remote working conditions, but explained that performance in March performance had been weaker, reflecting the effect of the Covid-19 coronavirus pandemic and government containment actions. The FTSE 100 company said there was “significant” uncertainty over its immediate outlook, and it was withdrawing its guidance for 2020. It claimed the firm’s “strong” balance sheet was being supported by further immediate action to maintain liquidity, with its share buybacks and 2019 final dividend suspended given that uncertainty, and additional measures being taken to manage cash flow and profitability, including cost reductions and capital expenditure, and “tight controls” on working capital.

Imperial Brands said Covid-19 had no material effect on its trading so far as the tobacco and vaping company unveiled a new €3.5bn (£3.1bn) revolving credit arrangement with its lenders.

Newspaper round-up

Asos has been criticised by staff who say they are scared to come to work at its distribution centre because they are not being sufficiently protected during the coronavirus pandemic. More than 98% of more than 460 workers who took part in a survey carried out by the GMB union said they felt unsafe at the group’s warehouse in Grimethorpe, Barnsley, even after new safety measures were introduced last week. About 4,000 people are employed at the warehouse with an average 500 working each shift. – Guardian

The largest group in the European parliament has urged the UK government to do the “responsible thing” and extend the Brexit transition period, as coronavirus plays havoc with the timetable for an EU-UK deal. The centre-right European People’s party (EPP), which unites the parties of 11 EU leaders, including Angela Merkel and Leo Varadkar, issued a statement on Monday calling on the government to extend the Brexit transition beyond the end of the year. – Guardian

The Italian federation of doctors has a message for those who build castles in the air based on theoretical modelling of Covid-19, and for those credulous enough to base policy on such models. “Whoever is handling the numbers is either incompetent or living in a parallel universe,” said Dr Paola Pedrini, head of the federation’s Lombardy chapter, currently facing the pandemic onslaught. Those dying at home or in care homes are not being recorded as coronavirus deaths. The true death toll is multiples higher. “We don’t want data confusion to hide the general responsibility for the ‘Caporetto’ of the Italian health system.” – Telegraph

Oil prices have tumbled to their lowest level in 18 years amid fears that producers could quickly run out of storage space for crude rendered surplus by falling demand in the coronavirus crisis. Brent crude, the global benchmark price, fell by 9.5 per cent to $22.57 a barrel last night, its lowest level since early 2002 and down two thirds since the start of this year. – The Times

Banks in Britain could face losses of more than £15 billion on loans that backed leveraged buyouts and other highly geared transactions, research suggests. These loans risk going sour as an economic slump affects the cash flow of companies with heavy debts. Insurers, hedge funds and small investors in corporate bond funds are also at risk. – The Times

US close

Wall Street stocks turned in a solid performance on Monday after Johnson & Johnson identified a lead candidate for coronavirus treatment and the White House extended measures to contain the spread of the outbreak.

At the close, the Dow Jones Industrial Average was up 3.19% at 22,327.48, while the S&P 500 was 3.35% firmer at 2,626.65 and the Nasdaq Composite saw out the session 3.62% stronger at 7,774.15.

The Dow closed 690.70 points higher on Monday after seeing out the previous week in the red despite the US House of Representatives voting in favour of an approximately $2.2trn economic relief package following a late bout of selling. The deal includes business loans, increased unemployment benefits and government payments of $1,200 to adults and $500 per child, making it the largest stimulus package in US history.

Dow futures had the blue-chip index opening lower before the bell following a sharp downturn in oil prices that saw West Texas Intermediate prices drop 4.70% to $20.50 per barrel and Brent crude fall 7.58% lower to $23.04 a barrel.

However, sentiment got a boost in early trade after Johnson & Johnson said it had identified a lead candidate for the treatment of the coronavirus. Human testing on the vaccine was expected to begin in September.