FTSE drops on company news
Despite the fairly positive global trading environment, lower-than-expected profits and plant closures in the UK are putting the FTSE under pressure this morning. In contrast, the promise of progress in US-China trade talks is lifting US markets and Asian stocks, which closed the day’s trade in Asia close to a four month high.
The US-China trade tensions, Brexit and volatile financial markets have made a dent in HSBC’s fourth quarter revenues and although the bank still reported a decent level of growth, the fact that the numbers came in below consensus analysts’ forecasts resulted in a 3.33% share drop this morning.
Another car maker to close doors of UK production
Adding to concerns about what Brexit is doing to Britain’s economy, Japanese car maker Honda decided to close its plant in Swindon in three years’ time. Granted, global car makers are battling fires on several fronts including Trump’s tariffs on foreign car imports, lower Chinese demand and slowdown in demand in other regions, but with Brexit around the corner Britain is losing any advantage points in what is already a cut-throat game.
Honda’s decision comes only weeks after Nissan decided to halt plans to build a new car model in its plant in Sunderland which will have obvious repercussions in terms of employment and investment. The pound, which currently acts as a barometer for all things Brexit, is flat-lining against the euro and the dollar, trading 0.1% lower against the common currency and up 0.1% against the greenback.
Walmart (NYSE:WMT) results and Mexican wall suit to dominate US trading
In the US focus will be on Walmart’s quarterly results later Tuesday and the rising tension between President Trump and several US states, which have filed a suit challenging his national-emergency declaration which he invoked in order to be able to raise money for the Mexican border wall. The legal move could be the beginning of a bigger showdown that could end up in front of the Supreme Court over the next two years.
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