Hays reports fall in net fee growth, Vesuvius lowers full-year profit guidance
London open
The FTSE 100 is expected to open three points higher on Tuesday, having closed down 0.46% at 7,213.45 on Monday.
Stocks to watch
Hays became the latest recruitment firm to report a fall in net fee growth from the UK and Ireland as Brexit worries continued to dent business confidence. The company on Tuesday reported a 4% fall in UK first quarter net fee growth, with a 7% decrease in the private sector offsetting a 6% rise in the public sector. Total group growth was flat as macro-economic concerns hit Germany in an “increasingly challenging” climate.
With market conditions having continued to weaken in the third quarter, Vesuvius said it now anticipates full year group trading profit to be between £180m and £190m, lower than the £197.2m achieved last year. The molten metal flow engineering and technology specialist's steel and foundry divisions have both been impacted by weakening end markets, leading the business to focus on cost optimisation plans.
Rank Group announced on Tuesday that group like-for-like net gaming revenue was up 10% for the first quarter ended 30 September, with total net gaming revenue up 9%. The FTSE 250 gambling operator said that on a channel basis, digital net gaming revenue grew by 16% and like-for-like net gaming revenue at its physical venues grew by 9%.
Newspaper round-up
WeWork is expected to sack at least 2,000 people as soon as this week, as angry staff at the troubled office rental company turn on its co-founder Adam Neumann. WeWork rents buildings long-term, gives them a millennial makeover with beer taps, communal spaces and tiny workspaces, and then rents them out short-term. Until recently it was America’s most highly valued private company with 527,000 tenants, or “members”, as WeWork calls them, worldwide. – Guardian
The government is likely to be able to recoup £1m at most from bonuses paid to the executives who were in charge of Thomas Cook when it failed. MPs on the business, energy and industrial strategy (BEIS) select committee will question former directors of Thomas Cook on Tuesday, in the first session of an inquiry into one of the most high-profile failures in UK corporate history. – Guardian
The founder of Hargreaves Lansdown has accused the firm of failing in its duty to shareholders amid a row about political donations. Peter Hargreaves fell out with the investment platform last week over a planned shareholder vote on making donations to political parties. The 73-year-old billionaire made it clear he would use his 32pc stake to oppose the motion, so Hargreaves Lansdown cancelled the ballot at the last minute before its annual meeting. – Telegraph
A prolonged period of ultra-low interest rates could exacerbate future economic downturns, a deputy governor at the Bank of England has warned. Sir Jon Cunliffe said that central banks were in a precarious position as they had little room to manoeuvre by cutting rates in any new slowdown. – The Times
The new transport secretary will be questioned by MPs on why his department handed the operation of the west coast main line and the new High Speed 2 line to FirstGroup when the company’s running of South Western Railway already had financial and operational problems. Grant Shapps is to face the Commons’ transport select committee tomorrow. Before that, the Labour Party has tabled questions in parliament, including: “What assessment, if any, of the financial performance of FirstGroup’s existing rail franchises did the Department for Transport undertake prior to the announcement of the award of the West Coast Partnership?” – The Times
US close
US stocks closed slightly lower on Monday following a report that revealed China wanted to hold further discussions with the US before signing Donald Trump's so-called "phase one" trade deal.
At the close, the Dow Jones Industrial Average was down 0.11% at 26,787.36, while the S&P 500 lost 0.14% at 2,966.15 and the Nasdaq Composite saw out the session 0.10% weaker at 8,048.65.
The Dow closed 29.23 points higher on Monday after seeing out the previous week on a high after Donald Trump told reporters at the Oval Office that the first phase of a major trade deal with China would be written over the next three weeks.
However, an early morning Bloomberg report claimed that Chinese trade officials wanted to hold more talks before the end of October in order to further discuss the details of the "phase one" trade deal before an agreement is signed.
Treasury Secretary Steven Mnuchin then told CNBC that while both sides had made "substantial progress" in last week's negotiations, the agreement was still "subject to documentation". Mnuchin added that a tariff hike on Chinese products set to take effect in December would go ahead if a deal could not be reached by then.
Trump had said on Friday that the deal did not include many details and also cautioned that it could take up to five weeks to get a pact written, suggesting that the two nations' agreement was more of a temporary truce than a full-blown trade pact.