ConvaTec warns of lower profits, Ultra Electronics wins new aerospace contracts
London open
The FTSE 100 is expected to open flat on Monday, having closed down 0.28% at 7,535.44 on Friday.
Stocks to watch
ConvaTec Group warned that profits for the full year will be lower than it had previously guided and that growth targets in 2018 may need to be adjusted. Although revenues in the third quarter grew 6.7% to $445.5m, the FTSE 100 company said it now anticipated full year organic revenue growth of 1-2% after performance was severely affected by supply issues in both advanced wound care and ostomy care and a lower than anticipated revenue contribution from new products, which also damaged it profits margins.
Ultra Electronics’ Cheltenham-based Precision Control Systems business has received contracts valued $16m from Boeing and Lockheed Martin. PCS will supply additional tranches of its “world-leading” high pressure pure air generators stores ejection systems for front line US and international strike aircraft. The company said no further information can be provided in relation to this award due to security considerations.
Financial technology company NEX Group announced on Monday that - having put into motion the “significant restructure” of the company’s post trade division 'NEX Optimisation' - Jenny Knott has decided to step down as the division's CEO. The FTSE 250 firm said Ken Pigaga, global chief operating officer of NEX has been appointed CEO of NEX Optimisation effective immediately. Knott will remain with the company for a period to ensure an orderly handover.
Newspaper round-up
Global banks and international bond strategists have been left stunned by revised ONS figures showing that Britain is £490bn poorer than had been assumed and no longer has any reserve of net foreign assets, depriving the country of its safety margin as Brexit talks reach a crucial juncture. A massive write-down in the UK balance of payments data shows that Britain’s stock of wealth – the net international investment position – has collapsed from a surplus of £469bn to a net deficit of £22bn. This transforms the outlook for sterling and the gilts markets. - Telegraph
Theresa May and David Davis will make a surprise visit to Brussels for a private dinner with the EU commission chief, Jean-Claude Juncker, and the EU’s top Brexit negotiator, Michel Barnier, in a diplomacy blitz before a crucial summit this week. May and Davis will visit Juncker and Barnier in the Belgian capital on Monday evening, where they are expected to make the case for EU leaders to agree to move on negotiations, to pave the way for discussions of Britain’s future relationship with the EU. - Guardian
Philip Hammond is planning a Budget raid on older workers to pay for tax breaks for younger people as he battles to save his job. The Chancellor of the Exchequer is understood to be examining ways to link tax to age to promote “intergenerational fairness” in next month’s Budget. Tax breaks would be offered to workers in their 20s and 30s, paid for by cutting reliefs for older and better off workers. - Telegraph
Philip Hammond is pushing for an international trade agreement in services to “rehabilitate globalisation” in the West to counter recent populist surges in Europe and America. The chancellor used his platform at the International Monetary Fund meeting in Washington to urge countries to redouble their efforts to build a global framework in services, such as banking, healthcare and transport, that would match the long-established arrangement for goods. - The Times
Confidence among chief financial officers has rebounded from a low point after the election, but Brexit is still expected to hit investment and hiring. The latest quarterly survey of finance officers, undertaken by Deloitte, has found that just under two thirds expect leaving the European Union to harm the business environment, down from nearly three quarters.
US close
Stocks ended slightly higher going into the weekend despite inflation data for September that came in shy of market estimates for a sixth month out of seven.
By the closing bell, the Dow Industrials had edged higher by 0.13% or 30.71 points to 22,871.72, with the S&P 500 up by 0.09% or 2.24 points to 2,553.17 alongside it and the Nasdaq Composite adding 0.22% or 14.29 points to trade at 6,605.80.
Front month West Texas Intermediate crude oil futures were trading higher by 72 cents to $51.45 a barrel on the NYMEX.
From a sector standpoint, the best performing areas of the market were: Iron&Steel (2.10%), Industrial metals (1.79%) and Non-ferrous metals (1.65%).
Investors were also digesting president Donald Trump's decision not to certify that Iran was complying with the 2015 nuclear arms deal, opting instead to pursue measures to strengthen it.