23 November 2018

Scott Reid

23 November 2018

Good morning,

It’s the most wonderful time of year, isn’t it?

Fighting your elderly neighbour for the last bargain raclette grill; pandemonium in the hoover aisle; and hours spent in wasted productivity scrolling through cut-price tellies from your office desk. I don’t know about you, but these well-known images of Black Fridays past have yet to endear me to the spirit of seasonal spending. 

Not so for retailers, however, who are expected to rake in a fortune during today’s trade. Research from GlobalData forecasts UK spending will grow by 3.1% to £10.4 billion pounds in the Black Friday period – which it defines as November 19-26. 

Meanwhile, it may be before 4am in some parts of the ancestral homeland of the shoppers’ holiday, but US customers are estimated to have already spent a princely $500 million in online shopping today. What’s more, nearly half of all Americans are expected to make a visit to a store or website for a Black Friday sales purchase this weekend.

On the London stockmarket, good news can’t come soon enough. Dipping sales figures at John Lewis, M&S and Sainsburys have raised investor fears of a retail slowdown - no matter how cute their Christmas adverts have turned out to be. Black Friday may curiously be both the cause and solution, however. Following last week’s report of an eight per cent fall in year-on-year sales at John Lewis, analysts suggested shoppers were now used to waiting to make a big purchase, and so have put the winter retail cycle out of whack. 

A word of caution, too, as we go forth to save the fortunes of our largest retailers. GCHQ has warned shoppers of the significantly raised threat of cyber-crime during today’s trade. According to the intelligence service’s National Cyber Security Centre, a data leak costs a firm an average of £3m; good news, then, that more than 550 significant cyber-incidents were prevented in the past 12 months.

Lest we forget the potential costs, last year’s aptly-named WannaCry cyber-attack is thought to have cost US coffers’ £3.5 billion - and I'm sure that isn't the sort of Cyber Monday we had in mind.


Negotiations between UK and EU officials to finalise a Brexit treaty continue in Brussels today amid last-minute demands by Spain over the future status of Gibraltar. As Theresa May unveiled the political declaration that will accompany the draft withdrawal agreement yesterday, Spanish prime minister Pedro Sanchez repeated his threat to vote against the deal if it lacked guarantees that Gibraltar’s status would be considered separately in future trade negotiations. Although no single member is able to veto a deal under the rules set out by Article 50, Brussels is understood to be seeking unanimous approval from the EU27.

Under plans approved in the Russian parliament, President Putin would have the authority to launch a pre-emptive nuclear ‘first’ strike in response to enemy aggressions. Senators in the Federation Council, Russian’s upper chamber, have recommended ending a military doctrine that forbids initial use of weapons of mass destruction. It is seen as a veiled threat by Moscow if the US withdrew from their landmark Cold War missile treaty. (£)

Fiona Bruce is in discussions with the BBC to become the first female host of Question Time. If agreed, the presenter of the News at Six and Ten would begin from January 2019 when current host, David Dimbleby, is due to step down after 24 years. The BBC’s media editor said Bruce auditioned alongside several other senior broadcasters.

Business & Economy 

Sky News reports that Virgin Atlantic is in talks for a surprise takeover bid of Flybe. The move is understood to be a way to draw passengers into Virgin’s long-haul network, as well as offering access to valuable runway slots at London Heathrow, which are currently ring-fenced for domestic flights. London Southend airport, where Flybe is based, has also been discussed as a potential bidder.

Carlos Ghosn has been removed as chairman of Nissan following an emergency meeting of the car marker’s board yesterday. Representative director, Greg Kelly, was also sacked following his arrest on Monday with Ghosn for similar allegations of financial misconduct. Prosecutors have yet to decide whether the alleged failures qualify as insider trading. 

The BoE would be required to activate swap lines with the European Central Bank in order to protect financial stability in the event of a ‘no-deal’ Brexit, Bank insiders have suggested. Swap lines are used to exchange currencies between central banks if the private sector market freezes, and were last used on a wide scale during the 2007-08 financial crash. Given the likely political sensitivities of a no-deal, Bank sources have cast doubt on whether the ECB or Federal Reserve would consent to the scheme.


What happened yesterday?

Gains for the pound following the announcement of agreement on the UK-EU withdrawal text made up for an otherwise lacklustre day in London stocks, where some 70% of constituents make their earnings overseas. By close of play, the FTSE 100 was down 1.28% to 6,960.32 points as the pound jumped 0.85% on the dollar to $1.29 and by 0.55% on the euro to €1.13.

Domestic stocks including banks and housebuilders were notable exceptions to the widespread falls, however, with Barratt Developments (up 1.70%), Taylor Wimpey (up 1.35%), Persimmon (up 1.00%) and RBS (up 2.08%) all ending the day in the black. 

British Gas owner Centrica (down 9.23%) slumped after warning that its full year results would be hampered after weaker energy production volumes and the loss of 372,000 home accounts during the third quarter. Severn Trent was also in the red despite reporting a 4.3% rise in first-half underlying pre-tax profits, and assuring investors that it was on track for its largest capital spend in a decade.

Topping the day’s losses, however, was Fresnillo (down 12.08%) whose stock plummeted after a ratings cut to ‘underweight’ by Morgan Stanley. Just Eat (up 3.86%), meanwhile, was the day’s biggest riser, updated to ‘neutral’ by JP Morgan.

Fuller Smith & Turner
Trading Announcements         
Origin Enterprises
Intl. Economic Announcements
(07.00) Gross Domestic Product (GER) 

Base Resources Ltd
Crystal Amber Fund Ltd.
Mc Mining Limited
Origin Enterprises
Petra Diamonds Ltd.(DI)
Sylvania Platinum Ltd (DI)
Tritax Big Box Reit

Tritax Big Box Reit

Columns of Note

Malcolm Robertson writes in The Times’ Thunderer column to urge action on boosting Scotland’s uptake of sport. Despite the manifest health and social benefits, he suggests facility provision and pricing simply make it too difficult for enthusiastic community volunteers to make headway. Instead, Robertson questions whether such facilities’ private contractor owners might be asked to do their bit – opening pitches at relatively insignificant cost, or imbuing volunteer groups with greater responsibility. He concludes that it’s time sports provision receives the political attention it deserves. (£)

Stephen Bush predicts in the New Statesman what the likely outcomes might be if Theresa May’s draft withdrawal agreement is voted down in parliament. He runs through the widely-discussed possibilities, including May’s deposition, an early general election following a vote of no-confidence, a unilateral halting of Brexit, a renegotiation of the agreement, and a second referendum. All are still very unlikely, Bush suggests, with a default ‘no deal’ option and eventual approval of the agreement most likely. (£)

Did you know?

When Fidel Castro came to power in Cuba in 1959, one of his first acts was ordering every Monopoly set in the country to be destroyed. (Twitter: @qikipedia)

Parliamentary highlights

House of Commons

House of Lords
Divorce (Financial Provision) Bill [HL] – Committee stage – Baroness Deech
Organ Donation (Deemed Consent) Bill – Second reading – Lord Hunt of Kings Heath
Homes (Fitness for Human Habitation) Bill – Second reading – Lord Best
Scottish Parliament
No business scheduled