Ashtead ups guidance, WPP ups turnaround

Mike van Dulken and Artjom Hatsaturjants at Accendo Markets, commented this morning:

Ashtead ups guidance, WPP ups turnaround

FTSE 100 called to open +55pts at 6775, up off yesterday’s lows, flirting with overcoming December falling highs resistance, albeit off  its highs and still within a 3/4-day narrowing pattern. Bulls need a break above 6800 to extend the rebound. Bears require a breach of 6750 to undo rising lows support from yesterday afternoon. Watch levels: Bullish 6800, Bearish 6750

Calls for a positive open come in spite of mixed and volatile trading on Wall St and in Asia overnight. A Tech rebound helped the US turn positive but not without a flirt with losses (algos allegedly running wild after the S&P hit key bearish levels), after Apple fell then bounced on news of a Chinese court injunction in its patent dispute with Qualcomm.

GBP is on the rise after yesterday’s Brexit-inspired dive, but still trades close to 2018 lows, helping the FTSE’s international names gain more ground. Top Chinese and US economic officials had a call to discuss trade talks roadmap, raising hopes that the Huawei CFO’s arrest and Apple’s China legal troubles won’t impede the, still intact, trade truce.

In corporate news this morning Ashtead expects FY results ahead of prior views; Q2 revenue growth was slower than Q1, but faster than Q4; interim dividend +18%; FY CAPEX guidance raised to £1.4-1.6bn. 888 acquires remaining interest in All American Poker Network for $28m.

WPP turnaround aims for 15%+ op profit margin by 2021; 3yr restructure to cost £300m, with £275 p.a. savings by end-2012 (50% to be reinvested). Prioritising dividends over buybacks; aims for 37.3p final div to maintain FY 60p. Confirms plans to divest Kantar stake, but retain significant minority interest.

BP says Helge Lund will become Chairman of the board effective 1 Jan. Serco extends two municipal support services contracts (by 10 years and 2 years, respectively) worth £135m. IP Group’s WaveOptics raised £20m in funding from existing and new investors.

Carpetright H1 revenues -15.7% (UK -19%; -12.7% like-for-like; Q2 better than Q1), underlying EBITDA £-1.7m (UK £-2.1m) vs H1’18 £8.6m (UK £8.4m), underlying pre-tax loss £12.4m (vs H1’18 profit £1.2m); net debt halved; on track for £19m annual savings; 65 UK stores closed.

In focus today will be continued discussion about the UK government’s deferral of a ‘meaningful’ Brexit vote for fear of a damaging Commons defeat, especially with the UK opposition accusing the PM of contempt of Parliament for the second time in a week.

The PM today begins another round of European visits aiming to coax guarantees that the Irish border backstop is nothing but a last resort in the case of a no deal Brexit and can’t tie the union to Europe indefinitely. However, Europe has already said no more amendments to the treaty. Watch GBP, which traded 20-month lows vs USD and Aug lows vs EUR, as well as the FTSE.

Macro data may play second fiddle today, but we do have UK October Unemployment (9:30am, est. unchanged at 4.1%), Average Earnings (est. unchanged at 3.2% YoY), of interest after that weak Q3 GDP print yesterday, as well as German ZEW Surveys (10am), where economic sentiment is projected to further deteriorate.

In the afternoon, US Producer Prices (1:30pm) are set to pull back to 2.5% YoY at the headline (vs 2.9% prev.), but hold firm at 2.6% for the less volatile core metric. Both still well above the Fed’s 2% inflation target. API Oil Inventories (9:30pm) return to their weekly slot this evening. Speakers limited to the ECB’s de Guindos (8:30am) delivering remarks at the European Statistical Forum.

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Accendo Markets

Accendo Markets is an online trading services provider, offering CFDs, spread betting and forex to retail (private) clients. Accendo Markets was established in 2007 and has since gone on to win various awards including ‘2018 Winner of Best CFD provider’ at City of London Wealth Management awards and 2017 & 2018 Best CFD Research Service in ADVFN’s International Financial Awards Accendo Markets Ltd. is authorised and regulated by the Financial Conduct Authority (FCA). For more information, visit www.accendomarkets.com