Profits slump at Redrow, Plus500 confident as momentum continues

London open

The FTSE 100 is expected to open 34 points lower on Wednesday, having closed up 1.32% at 6,105.54 on Tuesday.

Stocks to watch

Full year profits at housebuilder Redrow slumped by 66% due to the coronavirus and associated lockdowns although reservations were up in the first 11 weeks of the new fiscal year and it expected to resume dividend payments in 2021. Pre-tax profit plunged to £140m from £406m in the year to June 28 on revenues down 37% to £1.34bn. The order book rose to £1.4bn from £1.02bn.

Plus500 said it was very confident about its outlook after momentum from the first half continued into the second half. Revenue has stayed strong supported by higher customer numbers and use of its platform is at "elevated levels".#

Newspaper round-up

Thomas Cook is being resurrected as an online-only travel business, exactly a year after the 178-year-old company ceased trading, stranding 150,000 holidaymakers abroad. The relaunch comes as the travel industry faces the worst tourism crisis since records began. World Tourism Organisation figures show that international tourist trips dropped by 65% during the first half of the year, an unprecedented drop. But Thomas Cook’s UK chief executive, Alan French, said the company was taking the “long view”. - Guardian

New Look has won approval for a three-year rent holiday on 68 of its stores and big rent reductions on hundreds of others as it battles to stay afloat and save the jobs of its 11,200 employees. Landlords and other creditors voted in favour of an insolvency process known as a company voluntary arrangement (CVA) on Tuesday which will also let New Look reduce rent payments on hundreds of stores. - Guardian

Employers’ National Insurance contributions and business rates could both be cut as Rishi Sunak contemplates “creative” ways to help firms beyond the end of the furlough scheme after almost 700,000 people lost their jobs between March and August. The Chancellor said he would “find ways of effectively helping people” when the Treasury stops paying the wages of furloughed workers next month. - Telegraph

The White House is expected to approve a deal to allow Chinese social media app TikTok to continue operating in the US on Tuesday. Technology giant Oracle, once considered a dark horse in the race to buy TikTok's US operations, has been chosen to become a "trusted technology partner" and a minority shareholder in a new TikTok company, which will be US-headquartered. - Telegraph

Unsecured creditors in Travelex are facing heavy losses after suffering a shortfall of more than £368 million after a pre-pack administration of the foreign exchange business. The majority, about £319 million, is owed to bondholders who took control of the company last month through the administration and whose identities are unknown. - The Times

US close

Wall Street stocks closed mostly higher on Tuesday ahead of the Federal Reserve's two-day policy meeting and following Apple's first virtual-only product reveal.

At the close, the Dow Jones Industrial Average was up just 0.01% at 27,995.60, while the S&P 500 was 0.52% firmer at 3,401.20 and the Nasdaq Composite saw out the session 1.21% stronger at 11,190.32.

The Dow closed just 2.27 points higher on Tuesday, extending gains recorded in the previous session as a raft of corporate deals and optimism around a Covid-19 vaccine led a broad market rally.

The Federal Reserve started its policy-setting meeting, with a news conference and a fresh statement from Central Bank officials set to follow on Wednesday. The Federal Open Market Committee's meeting will be its first since launching its new policy framework of targeting average-inflation.

Sentiment also got a boost from data out of China, which revealed retail sales rose 0.5% in August, according to the National Bureau of Statistics.