12 November 2018

Adam Shaw

12 November 2018

Good morning,

It has been an interesting week for President Trump, even by the standards of the last tumultuous two years.

Losing control of the House of Representatives was not unexpected and most incumbent presidents suffer at the midterms. Indeed, it was far from the “Blue Wave” predicted just a couple of months ago, in which the Democrats would gain control of both the houses. 

The election was immediately followed by the bizarre and heated press conference which resulted in Jim Acosta, CNN’s White House correspondent, having his press pass revoked.

Then, this weekend, Trump cancelled a visit to Aisne-Marne American cemetery – part of Remembrance commemorations – due to bad weather, sparking widespread criticism.

Until now, Trump has been Teflon. Nothing has stuck, with numerous scandals that would have sunk any other president doing little to dent his ratings.

However, Democrats will do their best to change that come January when they take control of the House of Representatives. There are two trains of thought when it comes to how they will tackle Trump. The leadership is under pressure to open impeachment proceedings immediately, with 43% of Democrat voters citing it as what they see as a priority for Congress, according to Reuters/Ipsos poll.

On the other hand, senior figures in the party, recalling what happened when President Clinton was impeached, are all too aware that they need clear evidence of criminal activity for this to be successful. There is also the outcome of the Mueller investigation to come.

A softly-softly approach appears to be the most likely and viable scenario. 

News

Downing Street is hoping for a deal with Brussels to be sealed in the next 48 hours, paving the way for a leaders’ summit before the end of the month. However, cabinet disquiet with the package is reported to be growing as two crucial issues remain outstanding – fishing rights during the backstop plan to avoid a hard border in Ireland and the review mechanism which would allow the UK to leave said arrangement.

Pedro Sánchez, the Spanish prime minister, has become the most significant European leader to explicitly call for a second Brexit referendum. Most EU leaders have steered clear of backing a second vote to avoid the perception of interfering in the UK’s Brexit debate. However, in an interview with Politico, Sánchez – who describes himself as a “militant pro-European” – said that he would call a second Brexit referendum if he were Theresa May, saying the UK has taken a path of “self-absorption which isn’t going to be good either for the U.K. or for Europe”. 

The death toll from California’s wildfires has risen to 31, making them the deadliest wildfires in the state’s history. A further 228 people remain unaccounted for and 250,000 have been forced to flee their homes. Governor Jerry Brown has urged President Trump to declare a major disaster, a move which would release emergency federal funds, as 8,000 firefighters battle three wildfires covering 397 square miles.

An Israeli officer has been killed and another injured during a special forces operation in Gaza, which killed seven Palestinians – including a Hamas commander. A spokesperson for the Israeli military said in a statement that “an exchange of fire evolved” during the operation which is thought to have been an intelligence gathering operation. An Israeli ground operation inside the Gaza strip is a rare occurrence and will likely raise tensions.

Business & Economy

Daily Mail and General Trust (DMGT), owner of the Daily Mail, is preparing an offer to buy the i newspaper from Johnston Press, according to weekend reports. Johnston Press put itself up for sale last month, with chief executive David King saying he would prefer to keep the company intact. However, it is thought more likely that interested parties will focus on its desirable assets, and the i is considered one of the publisher’s “crown jewels”. The i was launched in 2012 and bought by Johnston Press four years later for £24 million. It sold 244,000 copies in August.

Firms looking to recruit are being hit by staff shortages as labour supply fails to keep up with job growth, according to the Chartered Institute of Personnel and Development. The HR trade body surveyed more than 1,000 employers, with the research showing that vacancies are becoming increasingly difficult to fill. A major contributor is a shortage of both EU and non-EU migrants, reflecting a falling interest in the UK as a destination for migrant workers.

The 10th incarnation of the Chinese shopping bonanza “singles day” generated a record $30.7 billion for Alibaba, with the first $1 billion of transactions completed in just one minute and 25 seconds. The brainchild of Daniel Zhang, Alibaba’s chief executive, Singles Day was launched in 2009 as an occasion for Chinese singles to treat themselves through retail therapy. The day’s figures will come as a boost to the ecommerce giant after it pared back its revenue targets for the financial year earlier this month in the midst of an economic slowdown and the trade dispute with the US.

Markets

The week ahead

Brexit is expected to top the agenda once more with reports that Theresa May is to convene a meeting of the cabinet to discuss and approve the text of a possible withdrawal agreement. It feels like we have been here before… 

Meanwhile, German chancellor Angela Merkel is due to address the European Parliament on Tuesday and set out a vision for the EU at a time of significant political change. This comes just two weeks after she announced her decision to step down as chair of the Christian Democratic Union and will likely signal the approach she plans to take in her remaining time in office.

In corporate news, many eyes will be on the US retailers reporting earnings this week – Home Depot, Macy’s, JCPenney, Nordstrom and Walmart – following the collapse of Sears last month. In addition, US retail sales data for October is published on Thursday. 

Bayer, EDF, Tata Steel, Vodafone and Royal Mail are amongst the other organisations reporting figures.

Finals
Carr’s Group
 
Interims
Aberdeen New Thai Inv Trust, Cropper (James), Mckay Securities, Warehouse Reit
 
Q3 Results
Dignity 

Trading Announcements
Dignity, Playtech
 
AGMs
Macau Property Opportunities Fund Ltd., O’Key Group GDR (Reg S) (WI)
 
EGMs
Afarak Group (DI)

Columns of Note

In the Financial Times Big Read, Henry Foy looks at why Western sanctions have failed to curtail Russia, with economic and business interests – primarily oil and arms sales – trumping political rhetoric. He contends that, put simply, Russia is too large and significant to isolate. 

Writing in The Sunday Times, Kevin Pringle considers the impact individuals can have on history. He cites Jim Sillars’ victory in the Glasgow Govan by-election 30 years ago, in which Sillars wiped out a near 20,000 Labour majority, and how it changed Scottish politics. Pringle asserts that the result transformed the constitutional question from “being an issue of Scottish politics to becoming the issue”, paving the way for devolution in 1999.

Did you know?

Private Henry Gunther of the US Army was the last soldier of any belligerent nation to be killed during World War I. He was shot dead at 10.59am on 11th November 1918.

Parliamentary highlights

TODAY 

House of Commons 

Oral Questions: Education (including Topical Questions)

Legislation: Finance (No.3) Bill – 2nd reading

Programme Motion: Finance (No.3) Bill – Mr Philip Hammond

House of Lords 

Oral Questions 

Government statement on Brexit at the next meeting of EU heads of government or state - Lord Dykes

Assessment of allegations against Sir Edward Heath left open after Operation Conifer - Lord Lexden

First World War contribution of people from what is now Pakistan - Lord Ahmed

Review of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 - Lord Bach

Legislation 

Children Act 1989 (Amendment) (Female Genital Mutilation) Bill [HL] - report stage - Lord Berkeley of Knighton

Counter-Terrorism and Border Security Bill - Committee stage (day 3) - Baroness Williams of Trafford

Short Debate: Imposing a statutory duty of care upon large providers of social media services with the UK - Lord Stevenson of Balmacara

Scottish Parliament

No business scheduled

TOMORROW

House of Commons

Oral Questions: Justice (including Topical Questions)

Ten Minute Rule Motion: Gypsy and Traveller Communities (Housing, Planning and Education) - Andrew Selous

Opposition Day Debate: Mental health; School funding

House of Lords 

Oral Questions

Ensuring that British citizens are recruited and trained to staff the NHS - Lord Clark of Windermere

Restricting the advertising or sale of flavoured nicotine vaping fluids - Lord Vaux of Harrowden

Representations from Welsh Government ministers concerning the impact of Brexit on the Welsh economy - Lord Wigley

Legislation

Courts and Tribunals (Judiciary and Functions of Staff) Bill [HL] - Third reading

- Lord Keen of Elie

Ivory Bill - third reading - Lord Gardiner of Kimble

Debate: The economy in the light of the Budget Statement - Lord Bates

Scottish Parliament

Topical Questions 

Stage 1: Age of Criminal Responsibility (Scotland) Bill

Financial Resolution: Age of Criminal Responsibility (Scotland) Bill