|Day's range||7,475.49 - 7,546.61|
|52-week range||6,536.50 - 7,790.20|
The England cricket team has just celebrated winning a world cup for the first time, reflecting four years of planning, hard work, persistence and the deft application of talent. International investors have long shunned, or in their parlance, “underweighted” the UK, according to various surveys since 2016. Not only have many foreign investors turned their backs, they are in no mood to step back in and buy UK assets when the likelihood is high that they can only become cheaper in local currency terms.
The major U.S. stock indexes are expected to open higher based on the pre-market futures trade, however, the markets are retreating from early highs. Buyers came in early, following through to the upside after Thursday’s late rally, but gains were dampened after a New York Fed spokesperson downplayed the chances of an aggressive rate cut.
FT subscribers can click here to receive Market Forces every day by email. Expanding equity multiples that recently propelled the S&P 500 index into record territory requires evidence of earnings growth at some point.
FT subscribers can click here to receive Market Forces every day by email. Reflation is what central banks and those holding risk assets want to see and that's why a rate cut looms from the Federal Reserve at the end of the month. Glancing at inflation break-evens — bond market measures of inflation expectations — does show some progress on that front.
This month, the UN estimated that climate disasters are happening at the rate of one a week. In October, the Intergovernmental Panel on Climate Change said we had 12 years to hold global warming to 1.5C above pre-industrial levels. Aviva measured investments in its equities portfolios against the goals of the 2015 Paris agreement (limiting the rise to 2C) and found they are on track for a 3.4C rise.
The U.S. retail sales are much stronger than expected and point to economic stability, not interest rate cuts.
Irish building materials supplier CRH announced it will sell its European distribution business to private equity funds managed by Blackstone. The European business, which supplies roof tiles, sanitary heating and plumbing to a network of builders, will be sold for €1.64bn, including net debt. Proceeds will be used for future acquisitions and to fund the FTSE 100 company’s share buyback programme, according to the company.
It’s a big week ahead, with key stats, corporate earnings, and geopolitical risk to provide the majors with direction through the week.
The CBI needs to champion smaller, more entrepreneurial companies to shake off a reputation as “the voice of big British business”, according to Karan Bilimoria, the chairman of Cobra Beer who is lined up to be president of the UK’s largest employer organisation. Lord Bilimoria was appointed vice-president of the CBI last month, and will take over as president when John Allan, Tesco chairman, steps down in a year’s time.
It shows that if investors had picked the 10 highest-yielding shares on the FTSE 100 index five years ago, these shares would have underperformed the benchmark. Brewin Dolphin, the wealth manager which did the analysis, also carried out the same research over 10 and 15 years, with similar results, but the difference is particularly stark over the five-year period. Over that period the highest yielding shares would have underperformed the FTSE 100 index as a whole by 3 per cent.
UK companies have been accused of “ticking a box” and appointing women to senior executive positions for symbolic purposes by a report that analyses gender and ethnic diversity in the boardroom. Women serve shorter tenures than men — an average of 3.3 years on a board for a female executive director is about half that of their male counterparts — and are less likely to be promoted to senior roles, according to the annual study by Cranfield University’s School of Management. Meanwhile, the number of women in chair roles across the FTSE 100 has decreased this year.
The UK’s largest housebuilder Barratt Developments is set to report record profits, as cheap borrowing and government support have boosted the industry. Pre-tax profits are expected to be about £910m for the year ending June 30, the company said in a trading update on Wednesday.
Imperial Brands, the maker of Winston and Lambert & Butler cigarettes, will drop a longstanding dividend target to fund investment in tobacco alternatives as smoking declines in western markets. The FTSE 100 company said on Monday it would end its 10 per cent annual growth target for its dividend after this financial year and base its future payouts on the performance of the business. Imperial has maintained its dividend growth at 10 per cent for the past 11 years, prompting questions over how much longer it could be sustained.
The UK is committed to being among the global leaders in the fast-growing field of impact investing. The newly announced Impact Investing Institute is one sign of this. Such leadership and commitment are welcome since private investors’ capital is sorely needed if the world is to stand a chance of achieving the sustainable development goals and the targets of the Paris Agreement.