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UK factory activity shrinks amid lethal cocktail of pressures live updates

Global stock markets were rattled today as Donald Trump sparked a new front in his trade wars, announcing plans to slap tariffs on steel and aluminium exports from Brazil and Argentina.
In a tweet, the US president accused the two South American countries of presiding over a massive devaluation of their currencies.
Plans for a tariff that would have affected the two countries were scrapped last year, following talks between officials.
The announcement shocked stock markets, sending European shares into sharp falls and pushing investors towards assets perceived as being low risk.
These were some of the days biggest stories:
Brazilian President Bolsonaro says he is almost certain he can talk Mr Trump out of it
Global sharessink as nerves return totrading desks
UK manufacturing activity gauge shows seventh month of contraction
Ted Baker calls in law firm to investigate ?25m inventory inflation
Chinese manufacturing scores highest reading since January 2017
Roger Bootle:The pounds rollercoaster ride will continue even if the Tories triumph
6:08PM
Market wrap:
European markets took the brunt of the losses today, with Germanys DAX and Frances CAC falling 2.1pc and 2.0pc respectively in the worst days trading since early October.
The FTSE 100s losses were pared by a weakening pound, which continued to soften as polling showed a narrowing lead for Boris Johnsons Conservatives ahead of next weeks general election vote. The blue-chip index closed down 0.8pc at 7,285.9.
Mining firms managed to hold gains during the day, following an initial rise prompted by Chinese manufacturing sector data that pointed to the highest levels of activity in factories since January 2017.
Meanwhile,Jair Bolsonaro, the Brazilian president, a Right-wing populist seen as a Trump ally, said he hoped the president could be convinced to change his mind onrestoring tariffs on all steel and aluminium imports from Brazil and Argentina.

Their economy is not comparable with ours, its many times bigger. I dont see this as retaliation, Mr Bolsonaro said in a radio interview with Brazils Radio Itatiaia.
Im going to call him so that he doesnt penalise us Our economy basically comes from commodities, its what weve got. I hope that he understands and that he doesnt penalise us with this, and Im almost certain hell listen to us, he said.
5:42PM
Unfair Labour rail fare cuts will hit roads and benefit wealthy, experts warn
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Labour says it will save average commuters more than ?1000 a year by cutting rail fares by a third
Labour will deal a brutal blow to the countrysailing road network with a ?1.5bn planto slash rail fares, experts have warned unfairly boostingaffluent train commuters at the expense of millions of drivers, Russell Lynch writes.
The party claims it will save the average rail commuter more than ?1,000 a year from next January by cutting fares by a third, to be funded from the Department for Transports (DfTs) existing budget.
Shadow transport secretary Andy McDonald refused to rule out axing road projects to pay for the giveaway, which was not included in Labours manifesto.
But statistics suggest the change will benefit only a fraction of travellers who rely on trains most of them wealthy while harming the many more who use their cars to get around.
Read the full article here
5:31PM
Former Eddie Stobart boss attacks hypocrite rescuer
UK factory activity shrinks amid lethal cocktail of pressures  live updates

DBay floated Eddie Stobart in 2017 after it was spun off from Stobart Group three years earlier
Former Eddie Stobart boss Andrew Tinkler has launched a stinging attack on the troubled trucking companys biggest investor, calling it a hypocrite and blaming it for a strategy that has taken the firm to the brink.
A rescue deal led by Isle of Man-based DBay Advisors, backed by Eddie Stobarts board, is due to be put to a shareholder vote on Friday.
Late last week the company warned itwould run out of cash if investors snubbed the DBay approach.
Mr Tinkler has lodged a rival offer though investment vehicle TVFB and provided further detailson Monday. He declined to comment on whether his rescuehas the critical support of Eddie Stobarts four lenders.
Read Oliver Gill's full article here
5:15PM
Inmarsat takeover in doubt as bidders refuse to raise ?2.6bn offer
UK factory activity shrinks amid lethal cocktail of pressures  live updates

A takeover row erupted after hedge funds said the bid undervalued the FTSE 250 company
The ?2.6bntakeover of Inmarsat is under threat after the consortium looking to take the satellite operator private rejected calls from hedge funds to offer more cash, my colleague Vinjeru Mkandawirewrites. She adds:

"Private equity giants Apax Partners and Warburg Pincus, together with Canada Pension Plan and Ontario Teachers Pension Plan, confirmed that they would not renegotiate the terms of their $3.4bn offer for Inmarsat.
"The offer is final and will not be increased, the consortium said on Monday.
"Their decision comes ahead of a court hearing on Tuesday to sanction the deal that had previously been scheduled for Nov 12."

Read more:Inmarsat takeover in doubt as bidders refuse to raise ?2.6bn offer
5:00PM
Market close
The FTSE 100 closed 0.82pc lower at 7,285.94 while the domestically-focused FTSE 250 tumbled 0.54pc to 20,700.21.
Germany and France both suffered heavy losses today, with the DAX and CAC both tumbling more than 2pc.
Across the pondWall Street isheading for its biggest fall since October.
European Closing Prices:#FTSE 7285.94 -0.82%#DAX 12964.68 -2.05%#CAC 5786.74 -2.01%#AEX 587.12 -1.70%#MIB 22728.59 -2.28%#IBEX 9156.3 -2.09%#STOXX 3626.66 -2.08% IGSquawk (@IGSquawk) December 2, 2019
4:52PM
Commentary on manufacturing data
Hugh Gimber ofJ.P. Morgan Asset Management says:

Investors had been growing increasingly confident over the past few weeks that the worst of the manufacturing slowdown could be behind us, which has helped to drive equity markets to new highs. Yet todays decline in the US ISM manufacturing print is materially below expectations and stands at odds with the recent improvement in the US PMI data. A weak employment component is of particular concern given the importance of the US labour market to the health of the overall US economy.
Looking ahead to next year, we expect global growth to remain constrained by lingering geopolitical uncertainty, although central bank policy will likely still be working to limit the downside for risk assets.
4:39PM
Quick update: Pound and Crude oil
The pound is down slightly against the dollar at the moment, 0.04pc lower at $1.2934, while it is 0.63pc down against the euro at $1.2934.
Brent crude oil is having a week start to the week however- having seen big declines last week. It is up 0.87pc at $61.24 per barrel.
Markets Hub I Brent Spot
4:21PM
Disabled employment hits record high as bosses open their minds
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Attitudes towards disabled workers have changed radically in the past six years
The number of disabled Britons in work has soared by 1.3 million since 2013 as record low unemployment has encouraged bosses to think more broadly about who they hire.
Most disabled people are now in work, with more than four million in employment.
By contrast the number of non-disabled people with a job has risen by just under one million over the same period, according to the Office for National Statistics.
This has halved the unemployment rate for both groups, falling to 6.7pc among the disabled and to 3.7pc for those without a disability.
Ben Willmott at the Chartered Institute of Personnel and Development said: The tightening labour market has increased competition for talent and encouraged employers to think about how they can become more inclusive.
4:09PM
Markets update
After an initially positive start, helped by better than expected PMI numbers, European markets are set to close firmly in the red in 20 minutes timeafter Trump casually restored tariffs on Brazil and Argentina. Stocks on Wall Street are also following Europe's lead.
President Trumpalso reiterated previous criticisms of the US Federal Reserve that they should continue cutting rates in order to counter the sharp falls being seen in both the Brazilian and Argentinian currencies, as he accused both countries of devaluing their currencies.

"He seems to have missed the point that the reason the currencies of both Brazil and Argentina are weak is not down to any deliberate or cunning plan on the part of either government, but merely because both their respective economies are in big trouble due to bad governance, says Michael Hewson of CMC Markets.
"Unfortunately, little details like that, dont appear to register with this particular President, which as an exercise in economic illiteracy, is hard to beat."
3:58PM
Good afternoon:Trump will raise levies if there's no China deal
UK factory activity shrinks amid lethal cocktail of pressures  live updates

President Donald Trump will increase tariffs on China if Washington and Beijing cant reach a trade agreement, UScommerce secretary Wilbur Ross told Fox Business Network.
"Well you have a logical deadline Dec. 15, Mr Ross said, according to the network.
If nothing happens between now and then, the president has made quite clear hell put the tariffs in the increased tariffs."
Ross said that raising tariffs on Dec 15. won't "interfere with this years Christmas" as retailers have already stocked up, adding that its a "really good time if we have to put more tariffs on. FxMacro (@fxmacro) December 2, 2019
3:45PM
Handover
Theres less than an hour left of trading, but that still means plenty time for further pain. My colleague LaToya Harding is going to take over from here, and will steer the blog into the evening. Thanks for following along the blog will be running as usual tomorrow, but Ill be back on Wednesday.
3:36PM
Full report: Ocados bond issue divides investors
My colleague Laura Onita has a full report on Ocados new bond sale. She writes:

This ?500m debt issue spooked traders, sending shares downas analysts disagreed over whether Ocado would have been better off relying on cash from shareholders instead.
Bruno Monteyne, of Bernstein, said: As a shareholder you would not want that investment program to be funded by equity.
"You would want such rent-generating assets [warehouses] to be funded by debt and that is exactly what Ocado is doing today.
However, Clive Black of broker Shore Capital warned: What surprises us is the need by Ocado for the capital...bearing in mind that it is not so long since it undertook a major equity fund raise.
Read more:Ocado divides the City with ?500m bond issue
3:29PM
Heavy losses across Europe
Its only getting worse in Europe: heavy losses are being sustained across the continent, worsened by that US factory data whiff. Germanys DAX is particularly woeful, sustaining its worst losses since early October.
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Credit:
Bloomberg TV
Wall Street is also down:
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Credit:
Bloomberg TV
Stoxx 50 down 1.5% as #Trump restores #steel #tariffs, #ISM Manufacturing disappoints. pic.twitter.com/3DIrBfbsuG jeroen blokland (@jsblokland) December 2, 2019
3:16PM
US factories extend contraction
UK factory activity shrinks amid lethal cocktail of pressures  live updates

A worker inspects solar panels at a facility in Hillsboro, Oregon, US

Credit:
Moriah Ratner/Bloomberg
Bad economic news from the US: purchasing managers index for Americasmanufacturing sector gave a reading of 48.1, down from 48.3 in October one of the lowest readings since the recovery from the financial crash a decade ago.
Analysts polled by Bloomberg had been expecting a reading of 49.2.
That indicates a continued and accelerating slowdown (a reading above 50 indicates growth), amid cutbacks, low global demand and continuing trade tensions between the US and China.
It belies more positive recent readings for Germany and China. The Institute of Supply Management, which gathered the data, found that factory employment continued to drop over the period surveyed, hitting its lowest level since January 2016. Production, meanwhile, dropped for a fourth month.
3:01PM
European losses cut deep
At the end of last week, optimism about a potential resolution to the trade war gave way to pessimism, and stock markets reacted in kind: we saw some fairly deep losses despite few material changes beyond the war of words sparked between Beijing and Washington by Donald Trumps endorsement of the Hong Kong bill.
Today, there is something material to trade on, and investors are responding as negatively as might be feared. Losses on Germanys DAX are particularly sharp given its relative recent stability.
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Credit:
Bloomberg TV

2:51PM
Metro Banks biggest backer sells down stake after bruising year
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Billionaire Steve Cohen is Metro's biggest shareholder with a 7.65pc stake
A hedge fund tycoon who is the biggest backer of Metro Bank has sold down a chunk of his stake in the troubled lenderafter a bruising year, Banking Editor Lucy Burton reports.

BillionaireSteve Cohen has offloaded 3.8mMetro shares for about ?7m, according to regulatory filings published days after it emerged that Colombian billionaire Jaime Gilinski Bacal had snapped up a big stake in the bank worth almost ?15m.
?The shares sold by Mr Cohen aninvestor whose company was once accused of insider trading were worth an estimated ?152.7m when the banks shares peaked last March.?
The American is one of Vernon Hills longstanding supporters, backing Metro when he founded it in 2010 as the first new British high street bank for more than a century. Mr Cohen remains Metrosbiggest shareholder with a 7.65pc stake.?
Read more:Metro Banks biggest backer sells down stake after bruising year
2:47PM
Argentine production minister: Tariff announcement unexpected
Brazil is likely to be the bigger victim of Donald Trumps latest tariff plans, but Argentina (which is having enough economic issues already) could do without the hit. Argentine production minister Dante Sica said the announcement of tariffs on aluminum and steel exports from the country was unexpected and he was seeking talks with US counterparts.
2:34PM
Bolsonaro: I'm almost certain Trump will listen to me
Brazilian President Jair Bolsonaro has been on the radio, discussing Donald Trumps new tariffs plans. Reuters has the latest:

Brazilian President JairBolsonarosaid on Monday he is almost certain USPresident Trump will listen to Brazils economic concerns, after Trump said earlier he would re-impose tariffs on Brazilian and Argentine steel and aluminum.
Their economy is not comparable with ours, its many times bigger. I dont see this as retaliation,Mr Bolsonarosaid in a radio interview with Brazil's Radio Itatiaia.
Im going to call him so that he doesnt penalize us ... Our economy basically comes from commodities, its what weve got. I hope that he understands and that he doesn't penalize us with this, and Im almost certain hell listen to us,he said.
Economic Intelligence newsletter SUBSCRIBER (article)
2:20PM
National World confirms it has approached newspaper group JPI
UK factory activity shrinks amid lethal cocktail of pressures  live updates

David Montgomerys National World is the front-runner to buy scores of regional papers including The Scotsman and The Yorkshire Post

Credit:
Paul Grover
David Montgomerys news consolidation vehicle National World has suspended its shares and confirmed it has approached JPI Media over the potential purchase of a slew of regional paper titles.
In a statement, it said:

The company confirms it is contemplating several acquisitions and has approached JPI following speculation that the sale process for the regional titles had not completed. There is no certainty that any transaction will proceed. Afurther announcement will be made asappropriate in due course.

JPI owns and operates around 200 local and regional titles, including the Scotsman and Yorkshire Post.
Business Briefing Newsletter REFERRAL (Article)
Sunday Telegraph Business Editor Chris Williams reported over the weekend:

National World is the frontrunner to buy the assets, which also include the Sheffield Star and the News Letter in Belfast, after Newsquest, Britains second-largest local newspaper publisher, dropped out.
Newsquest, the British arm of the vast American publisher Gannett, had been in the lead to acquire JPI Media and has long been considered the best fit, with little geographic overlap. However, when the takeover of Gannett by rival GateHouse Media was completed less than a fortnight ago, Newsquest appeared to abandon its pursuit. A source said: As soon as that deal was completed they went cold.
Reach, formerly Trinity Mirror, Britains biggest owner of regional newspapers, had previously dropped out, believing the price was too high.
The lack of competition leaves Mr Montgomery in a position to drive a hard bargain. Goldentree and its partners aim to exit the tough regional newspaper market as soon as possible after selling JPI Medias prized national title, the i, to the publisher of the Daily Mail on Friday for ?49.6m.
Read more:Path clear for Montgomery to seize control of JPI Media
1:57PM
Ted Baker deep in the red
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Ted Baker founder Ray Kelvin was ousted earlier this year following misconduct allegations

Credit:
Neil Hall/Reuters
Retailer Ted Baker remains firmly at the bottom of the All-Share index currently, off more than 10pc after this mornings warning over its stock valuation.
Read more: Ted Baker calls in law firm to investigate ?25m inventory inflation
That has brought shares down to about 356p apiece their lowest level since 2009.
You can read more of our coverage of the companys woes here.
1:40PM
Scottish Salmon Co. board recommends Bakkafrost takeover
The board of the Scottish Salmon Company has assessed a takeover bid by Faroe Islands-based fishing company Bakkafrost as fair, after the groups purchase of a 69pc stake forced it to launched a takeover bid.
Oslo-listed Bakkafriost bought the stake in late September for around ?320m, saying it would give the group a niche farming region with Scottish provenance products priced at a premium to the market.
The Scottish Salmon Co. is also listed in Oslo, but is based in Edinburgh.
Salmon prices have climbed dramatically over the last decade, due to heightened demand spurred by population growth and a desire for healthier food options.
1:15PM
Fresnillo slips after low guidance
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Fresnillo is among the biggest fallers on the FTSE 100 today

Credit:
LAYTON THOMPSON
Silver and gold miner Fresillo is among the bigger fallers on the FTSE 100 today, after it sets its guidance for production at the lower end of previous estimates.
Chief executive officer said the companys main target for the coming year would be stabilising production and finding ways to unlock more potential from its current assets.
The minerexpects to produce 885,000 ounces of gold and 55m ounces of silver for the full year.
Goldman Sachs said the shifted outlook confirmed the group needed more time to fix issues with its production pipeline.
12:33PM
Miners rising on FTSE 100
Its still a pretty muted picture on the FTSE 100, but the biggest blue-chip risers are among the mining and materials firms, and energy giants Shell and BP.
All the firms stand to benefit from improved conditions in China, but worries after a newly tariff-happy Donald Trump may shake confidence a little.
12:12PM
Bolsonaro: I have open channel with Trump
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Jair Bolsonaro during the changing of the guard at Brazils presidential palace

Credit:
Joedson Alves/EPA-EFE/REX
Responding to Donald Trumps tariff announcement (see 11:16am update), Brazilian President Jair Bolsonaro has asked journalists to wait for him to discuss the matter with his economics minister before he comments.
He said he has an open channel with Donald Trump if needed.
Meanwhile, Mr Trump has tweeted again:
U.S. Markets are up as much as 21% since the announcement of Tariffs on 3/1/2018 - and the U.S. is taking in massive amounts of money (and giving some to our farmers, who have been targeted by China)! Donald J. Trump (@realDonaldTrump) December 2, 2019
The Presidents claim that tariffs have shifted the stock markets is of course, highly dubious (it is doubtful whether they have contributed at all). Meanwhile, the tariffs themselves actually result in higher prices for US buyers.
12:00PM
Markets in reverse
After a strong opening out of the gate today, a reminder of how Donald Trump operates combined with some mixed PMI data has knocked European shares back a little. The FTSE 100 is clinging onto gains, with a slightly weaker pound no doubt helping.
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Credit:
Bloomberg TV
11:24AM
Competition watchdog to probe Googles $2.6bn Looker takeover
Britains competition watchdog will probe Googles $2.6bn acquisition of cloud computing service Looker amid concerns that it will harm UKcompanies fighting for a share of the industry, Hasan Chowdhury reports.

The deal, which was announced in June, will be scrutinised bythe Competition and Markets Authorityin a sign of the increasingly tough stance being taken against Silicon Valleys tech firms.
Looker, founded in 2012 in California, specialises in data analytics and helps businesses process the vast amounts of data they generate to draw insights faster.
Last month, the company launched a new version of its product which allows the integration of tools such as Slack, the cloud-place messaging service.
Read more:UK competition watchdog to probe Googles $2.6bn cloud deal
Technology Intelligence newsletter - UK
11:16AM
Trump to restore tariffs on steel and aluminium from Brazil and Argentina
UK factory activity shrinks amid lethal cocktail of pressures  live updates

In this file photo, a worker checks wire rod rolls at the Belgo Juiz de Fora production plant, in Brazil

Credit:
P F GROSJEAN/AP
US President Donald Trump has announced he will restore US tariffs on steel and aluminiumfrom Brazil and Argentina, accusing the South American countries of intentionally devaluing their currencies in order to undercut US farmers.
He also called for the US Federal Reserve to cut rates and loosen policy to weaken the dollar, in an effort to combat such alleged efforts.
.....Reserve should likewise act so that countries, of which there are many, no longer take advantage of our strong dollar by further devaluing their currencies. This makes it very hard for our manufactures & farmers to fairly export their goods. Lower Rates & Loosen - Fed! Donald J. Trump (@realDonaldTrump) December 2, 2019
Brazil and Argentina were both put under a quota system instead of tariffs last year, following negotiations. Further relief was then offered on that arrangement.
As I noted last week, the Brazilian real recently hit an all-time low against the dollar.
11:05AM
Just Eat activist says Prosus offer needs ?1.5bn boost to be worth looking at
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Just Eat is at the centre of a bidding war

Credit:
Fergus Burnett
Although things are continuing to wind down as we enter the holiday period, one City saga is bubbling on: Just Eat activist Cat Rock has called for investment giant Prosus to substantially up its bid for the delivery firm.
Cat Rock has been a key player in the saga, which has led to a showdown between company-backed plans to merge with Dutch peer Takeaway.com, and Prosuss unexpected bid.
The hedge fund, which owns a 2.6pc stake in Just Eat, issued an open letter to other shareholders. Its managing partner Alex Captain said:

While we are pleased that Prosus has bid for Just Eat, we are deeply disappointed with both the level of their offer and their approach to the bidding process.
Instead of offering a fair price for Just Eat, Prosus has made a number of claims about Just Eat and Takeaway.com aimed at convincing shareholders not to support their merger.
Just Eat
He said Prosuss 710p-per-share offer (which would value Just Eat at ?4.9bn) was not remotely close to our assessment of fair value, saying 925p was a more appropriate level. That implies a valuation of around ?6.4bn, so is a pretty chunky rise.
Cat Rocks open letter concludes:

Prosus has a strong incentive to convince Just Eat shareholders that Just Eats problems are deep, structural, and expensive to fix. As described above, we think these arguments are simply wrong.
As long-term shareholders at Just Eat, it is clear to us that Just Eat is a high-quality business that has suffered from the absence of stable, experienced leadership over the past two and a half years. We think the Takeaway.com merger solves this problem by combining forces with perhaps the most well-run online food delivery company in the world.
10:45AM
Money round-up
Here are the days top reports from our Money team:
The economy is sluggish but the market pays 4pc why stock pickers are buying into Europe
Which party to vote for if youre in your 30s
We earn a combined ?60k and bought our first home in London by 25
Money Newsletter REFERRAL (Article)
10:34AM
Ocado slips as it issues ?500m bond to raise cash
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Ocado said it expected growth in the region of 10pc to 11pc for the 13 weeks to the start of December

Credit:
Jason Alden/Bloomberg
Ocado has been keeping itself in the news lately, with updates three (work)days on the trot.
After a jump on Thursday and a surge on Friday, the grocery/technology group is the biggest faller on the FTSE 100 today after announcing the launch of a new ?500m bond to fund its expansion ambitions.
Read more: Ocado shares soar on Japanese warehouse deal
Market report:Ocados growth mission delivers boost
The bonds, which will carry a coupon of 0.75pc to 1.25pc per year, will be repaid by 2025, the company said. They will be eligible for conversion into shares, which is likely part of why the companys price has slipped slightly today.
As part of the announcement, the company also updated on sales figures. It said:

In the 13 weeks to 1 December 2019, we expect Retail Revenue growth of 10-11pc, with growth in orders including those for Ocado Zoom slightly higher than Retail Revenue growth.
10:08AM
Ted Baker among 2019s worst-performing stocks
The fashion retailer has pared its losses somewhat today, but Ted Baker is still among the worst-performing stocks across the All-Share index (the honour of worst faller is held by Metro Bank).
Other big fallers include Amigo, Kier and Sirius Minerals.
9:48AM
Full report: Ted Baker calls in the lawyers over stock inflation
My colleague Simon Foy has a full report on Ted Bakers stock inflation worries (see 8:23am update). He writes:

The revelation comes after a torrid year for the retailer after twice warning on profits and announcing the departure of its founder and chief executive Ray Kelvin followingallegations of inappropriate behaviour.

The PAs City Editor Simon Neville tweets:
Intriguing story at Ted Baker today. Problem is - the board already knew this was a "significant issue" because it said so in the latest annual report. The board agreed it wasn't significant enough. Now they say it is. Will any non-execs be resigning? https://t.co/ak9rHOlp9K Simon Neville (@SimonNeville) December 2, 2019
9:44AM
Jobs cuts deepest since 2012
IHS Markits findings also that November marked the worst month for jobs cuts in seven years:

November saw manufacturing employment fall for the eighth straight month, with the pace of job losses the steepest since September 2012. Companies linked further cuts to cost reduction efforts, efficiencies, Brexit uncertainty, redundancies, natural wastage and staff restructuring
9:40AM
Reaction: Expect a bleak beginning for the industry in 2020
UK factory activity shrinks amid lethal cocktail of pressures  live updates

A wing stands in a bay on the Airbus SE A350 wing production line at the Airbus SE assembly factory in Broughton, UK

Credit:
Matthew Lloyd/Bloomberg
Reacting to those PMI figures, theChartered Institute of Procurement & Supplys Duncan Brock said:

A heavy sense of inevitability hung around the sector in November as it continued to suffer the effects of a lethal cocktail of Brexit uncertainty, slowing global growth and an impending General Election. These combined to stifle any chance of manufacturing crawling out of the contraction zone, where the sector was stuck for a seventh month in a row.
Supply chain managers cited weakened domestic demand and one of the biggest falls in export orders for seven years as companies unravelled their pre-Brexit stocks and resulting in one of steepest reductions in purchasing since 2013. Inevitably, where new orders fall, jobs are sure to follow and manufacturing employment fell at its fastest pace since September 2012. Firms tried to balance their books by reducing overheads and improving efficiencies quickly, and staff numbers were the casualties.
With this backdrop of pressures, the sectors performance is unlikely to change any time soon, which means a bleak beginning for the industry in 2020.
No deal Brexit | How are different industries faring?
9:34AM
Final reading: UK manufacturings November activity fall less bad than expected
Just in: The final PMI reading for the UK manufacturing sector in November came in slightly higher than the flash reading earlier this month, at a score of 48.9 (where a reading above 50 indicates growth).
Thats a still a slowdown, but suggests the slump was not as bad as feared.
IHS Markit said:

The UK manufacturing downturn continued in November, as businesses responded to the delay to Brexit and a fresh injection of uncertainty from the forthcoming general election. Output, new orders and employment all fell, while destocking activity resumed as firms depleted buffers built-up in advance of the postponed exit date.

They added:

The delay to Brexit had a noticeable impact on stock holdings and purchasing activity during November. Finished goods inventories fell at the steepest rate in over two-and-a-half years, while input buying volumes fell to one of the greatest extents since early-2013. These contractions were a marked reversal from the solid increases seen in the lead-up to the October 31st exit date.
9:25AM
Hiscox shares stumble as investors brace for relegation
Shares in Hiscox are slipping this morning, as investors bet the company will lose its spot in the FTSE 100 during this weeks reshuffle calculation.
The insurance company has ended up in the relegation zoneafter a series of share-price hits chipped its market cap below the threshold for inclusion in the top index. EasyJet will likely take its spot.
For Hiscox, which entered the blue-chip index twelve months, a fall would cap off a torrid few months, in which costs from claims related to Hurricane Dorian and recent wildfires in California forced it to warn it may not return to profitability for two or three years.
The group said this was a conservative expectation, which of course it will aim to exceed. A double rating cut in early November that knocked prompted a 17pc one-day share price fall may have been the final nail in its coffin.
Read more:Storm-hit Hiscox heads for FTSE exit
Hargreaves Lansdowns Nicholas Hyett said weather events had blown a hole in Hiscoxs bottom line. The good news is premiums have continued to grow, he added, but thats unlikely to offset the headwind from increased claims in the short term.
The quarterly review of the indices will take place based on tomorrows closing prices. Any FTSE 100 company that slips to 111th place or below on the all-share index is automatically demoted, while any company outside the blue-chip index that take 90th position or above is automatically added.
9:14AM
Eurozone factory activity scores best reading in three months, but continued slowdown indicated
More purchasing managers index activity data, this time the final reading for the Eurozone as a whole. The reading is a mix on theone hand, a score of 46.9 (where above 50 indicates growth) is the best in three months, but the figure also indicates a slowdown in the sector is continuing.
Data-gatherers IHS Markit said:

At the market groups level, both the intermediate and investment goods sectors remained inside contraction territory during November, although in each case rates of decline were weaker. Operating conditions for consumer goods producers were unchanged compared to October

Its chief economist, Chris Williamson, said:

Although still signalling a steep rate of decline, the manufacturing PMI nonetheless brings some encouraging signals which will fuel speculation that the worst is over for euro area producers, barring any new set-backs (notably in relation to Brexit and trade wars)...
...Perhaps most promising is a marked upturn in business sentiment, particularly in Germany, with optimism about production in the year ahead hitting a five-month high in November. Producers renewed optimism in part reflects reduced concerns over trade wars.
9:02AM
Hong Kong retail sales continue to sink
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Demonstrators in Hong Kong earlier today

Credit:
Anthony Kwan/Getty
This morning brought fresh poor economic news for Hong Kong, as the financial hub remains wracked by disruption from pro-democracy protesters.
The latest the figures for Hong Kongs retail sector show sales volumes staggered down 26.2pc in October, compared to the same time last year.
The city is already likely on track for a recession, after a sharp drop in output during the last quarter.
8:48AM
Capco says it will pursue progressive dividend policy
London landlord Capital & Counties says it will pursue a progressive dividend policy and convert to real-estate investment trust (REIT) status, after its completed the sale of its interests in Earls Court.
The sale, for ?425m, will provide initial net proceeds of ?156m, with a further ?211m to be recieved over the next two years.
Read more: Candy Ventures miss out on Earls Court development project
In a business update this morning, the company said:

Capco is now positioned as a prime central London property investment business centred around Covent Garden.

It added:

The West End offers greater insulation from the well-documented wider retail challenges however it is not immune with certain retailers taking a more conservative view, as a result of broader political and macro-economic uncertainty and occupational cost pressures. Nevertheless, trading performance on the estate remains encouraging with footfall growth and average tenant sales continuing to trend upwards.
8:35AM
Coming up: Final UK manufacturing reading
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Quality Street chocolates are assembled at Nestle UKs factory in Halifax, West Yorkshire

Credit:
Asadour Guzelian
In just under an hour, well get IHS Markits finalised reading for the UKs manufacturing purchasing managers index.
The flash reading released earlier this month gave a score of 48.3, where above 50 indicates growth. Analysts arent expecting any change in that reading. Heres how the latest numbers look:
8:23AM
Ted Baker shares drop as it probes ?25m inventory overstatement
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Ted Baker says the adjustments will have no cash impact

Credit:
Jack Taylor/Getty
Shares in Ted Baker have slipped sharply this morning, after the retailer announced that it had overstated the value of its stock by between ?20m and ?25m.
The company, which recently slipped out of the FTSE 250, said it had appointed law firmFreshfields Bruckhaus Deringer to carry out a review, and would shortly hire accountants to assist with the process.
Ted Baker said:

The Board believes that any adjustment to inventory value will have no cash impact and will relate to prior years...Ted Baker is committed to ensuring the independent review is completed in an efficient and transparent manner and will update the market as appropriate.
Read more:Ted Baker woes dent Ray Kelvins fortune by ?215m
Questor: catching a falling knife or the right time to buy into Ted Bakers recovery?(Worth noting Russ Mould concluded selling the companys shares would be the best option)
Liberum analysts said the news was less than ideal, adding:

In our view, it is indicative to some degree of the very early stage work that the new and highly-regarded CFO, Rachel Osborne, is undertaking.
8:14AM
Europe pushes up
After ending last week in the red, European shares have pulled back up a little today, with moderate gains across the top indices.
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Credit:
Bloomberg TV
Markets.coms Neil Wilson said:

Markets continue to cling tohopes for a trade dealbut increasingly this looks unlikely to be agreed, signed and delivered before year end. Markets though wont particularly mind they dont look in the mood to allow a bit of can-kicking to derail the party, albeit we do see pullbacks along the way on headlines.As long as it can-kicking and not a complete breakdown in the talks, then markets should remain on an even keel.
Business Briefing Newsletter REFERRAL (Article)
8:11AM
Heres how that Chinese manufacturing data looks
CMC Markets Michael Hewson said:

This good start for Asia is expected to translate into a similarly positive European open this morning.
7:34AM
Agenda: European markets to start December higher
UK factory activity shrinks amid lethal cocktail of pressures  live updates

Business activity in China registered its best reading in almost three years

Credit:
STR/AFP
Good morning. European markets are tipped to open the month in the green following better-than-expected Chinese manufacturing results for November which gave Asian stocks a boost overnight.
The Caixin manufacturing survey for November came in at 51.8, its best reading since January 2017.
Meanwhile, the pound treadwater over the weekend to stay above $1.292 despite polls predicting that the gap between the Labour Party and the Conservatives is narrowing as the general election nears.

5 things to start your day


1)High-Speed 2 officials are ploughing ahead with preparations for a ?270m station in Birmingham despite the cloud hanging over the future of the rail link. Read why here
2)There have been few elections where the voice of business has seemed so peripheral. It feels as if the needs andinterests of UK companies both large and small have been largely ignored by all of the major political parties.Starting today, we begin an eight part series featuring the voice of business from all of the UK's regions and spanning all of the nation's biggest industries. Today, Lucy Burton tests the temperature in the City of London.
The business of London

3)The Lib Dems want to take a leaf out of Californias book and legalise cannabis. But can it work in Britain? Tech reporter Laurence Dodds looks at what we can learn from the Americans.
4)Boris Johnsons Brexit deal has given a temporary lift to the nations manufacturers but the sector is still facing an uphill battle next year, industry body Make UK has warned. Heres why
5)A fleet of electric scooters and bikes backed by Ford is preparing to take to the streets in a dozen European cities in the latest phase of the car makers survival plan for the Uber era.

What happened overnight


Financial markets started December with a risk-on mood in Asia following a better-than-expected reading on Chinese manufacturing that added to evidence the global economy is turning a corner.
Japanese stocks led equity gains across the region, while S&P 500 Index futures edged up. Ten-year Treasury yields climbed to 1.81pc, and their Japanese counterparts ticked up closer toward zero.
Sentiment could still be kept somewhat in check by the continuing lack of closure on a US-China trade deal. Chinas Global Times underscored that its government wants tariffs to be rolled back as part of phase one.
The so-called official China manufacturing purchasing-manager index exceeded all estimates in a Bloomberg survey, and suggested an acceleration in activity in November. A private gauge released Monday also showed an increase.

Coming up today


The reporting wind-down heading into the Christmas period continues this week, but there are still a handful of interesting companies reporting.
Interim results:Ferroglobe
Economics:Markit manufacturing PMI final reading (UK, US and eurozone), ISMmanufacturing (US), Caixin manufacturing PMI (China)
See also:
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