Not all the day's trading statements have been well received.
Discount retailer B&M European Value Retail SA (LSE:BME) reaffirmed its earnings guidance after reporting “solid underlying growth in a tough environment” with half year revenues up 1.8%.
But it said UK adjusted earnings fell sharply as margins fell by 213 basis points, “largely due to higher markdowns in the gardening category resulting from the late arrival of warm weather."
Its shares are down 6.5%.
Russ Mould, investment director at AJ Bell, said: "There are signs of margin pressure on the business. An uncharitable takeaway is that B&M doesn’t have a great degree of pricing power, a prized quality right now.
“When your whole model is about offering products at bargain prices, you probably have to absorb some of the extra cost so the brand’s reputation for value isn’t undermined.
“There are also signs that B&M has been caught out by unpredictable weather and left with stock which it has had to sell at big markdowns.”
Auto Trader Group PLC (LSE:AUTO) has lost 4.84% after first half operating profits fell 2% to £149.1mln.
But Centrica PLC (LSE:CNA) continues to lead the way after its update, climbing 8.17%.
Mould said: “For as long as energy companies continue to post record profit while consumers are facing soaring energy bills the debate around some form of windfall tax is not going to go away.
“However, some of the heat has been taken out of the debate by some very mild autumn temperatures – reflected in a weak showing for Centrica’s British Gas retail business.
“Centrica is both a producer and supplier of energy and it’s on the production and marketing side that it is continuing to enjoy extremely strong profit – enabling it to lift guidance and unveil a buyback.
“Centrica is concerned about the impact of some customers being unable to pay their bills and it is clearly aware of the reputational issues as it puts more money into a customer support fund."
ConvaTec Group PLC (LSE:CTEC) is up 5.67% after the medical products firm reported a 2.4% rise in revenues for the first ten months.
With sales continuing to grow, it has raised its guidance for 2022 organic revenue growth to 5.4%-5.8% from 4.0%- 5.5%.
And AstraZeneca PLC (LSE:NASDAQ:AZN) has added 1.24% to 10,980p as it also lifted its guidance.
The Anglo-Swedish drugs giant said third quarter earnings grew by 70% and it now expects 2022 core EPS to increase by the high-twenties to low-thirties percent. This is up from the previous mid-to-high twenties percent range.
Keith Bowman, investment analyst at interactive investor said ”Continued drug development success is again helping the FTSE 100 pharma giant raise its earnings expectations...
"With analysts currently estimating a fair value share price of close to £123, City consensus opinion continues to point towards a buy.”
Overall the FTSE 100 is currently down 12.63 points or 0.17% at 7283.62.
8.45am: Market could be hit if US data disappoints
Back with the forthcoming US inflation figures, and economists at ING say the market may be a bit ahead of itself and warn that the data often comes in higher than expected.
They say: "The main focus should be on the month-on-month core rate, which is seen ticking down to 0.5% from 0.6%. Mind you, readings closer to 0.2% is what would be needed to bring the rate closer to the Fed’s 2% target, so anything we will see today will still signal central bankers that they are wide off the mark.
"But coming in the wake of the Fed signalling the possibility of decelerating its tightening pace from December onwards, there is a good chance that markets will extrapolate this from today’s data. A reading in line with consensus should further strengthen expectations for a 50bp hike in December, which is what the market is currently leaning towards...
US yields off their highs means a high CPI would be most impactful for markets, say @MarketsGarvey and @AntoineBouvet2https://t.co/eVYZ0lqKN4 pic.twitter.com/XguxZarlXW— ING Economics (@ING_Economics) November 10, 2022
"The cautionary tale is that inflation data has had a habit of surprising with higher readings. Markets have been trading stronger going into today’s reading with 10Y Treasury yields dipping towards 4.05% yesterday, which could increase the impact of a disappointing inflation reading.
"However, we have the feeling that the market may still be too absorbed with the notion of a potential pivot. There are good reasons to slow the pace of tightening not least given policy lags involved after a phase of catching up.
"That does not mean that the Fed will want to signal that it is doing less tightening in sum. This should not be the case unless there is more compelling evidence of inflation being on a trajectory to return to target."
8.25am: Ex-divs hold back leading index
The blue chip index would be doing even better if not for a host of big names going ex-dividend, which automatically knocks around ten points off the index.
These include the biggest faller so far, Shell (LON:RDSa) PLC (LSE:SHEL, NYSE:SHEL), which is down 2.31%, Whitbread PLC (LSE:LON:WTB) down 2.08%, Airtel Africa PLC (LSE:AAF), which has lost 2.01%, BP PLC (LSE:LON:BP.), which is off 2% and J Sainsbury (OTC:JSAIY) PLC (LSE:SBRY), 1.74% lower.
Without the impact of these moves the FTSE 100 - which is down just 7.01 points now at 7289.24 - would be in postive territory.
8.14am: Footsie performs better than expected but still in the red
Following the late decline on Wall Street and weakness in Asian markets, leading shares have opened in negative territory.
The slide in the US came amid further disappointing corporate updates, as well as the move by cryptocurrency exchange Binance to pull out of a deal to take over rival FTX.
Meanwhile investors were also trying to interpret the outcome of the US midterm elections, where the Republicans did worse than expected.
In the wake of all that, the FTSE 100 is down 19.21 points or 0.26% at 7277.04, but the fall is not as much as expected after some well received trading statements.
British Gas owner Centrica PLC (LSE:CNA) has jumped 6.6% after it said it expected full year adjusted earnings per share to be towards the top end of analysts' forecasts, and unveiled a share buyback programme.
Later today, US inflation numbers will be keenly watched for their impact on the Federal Reserve's interest rate policy.
Since the Fed unveiled a 75 basis point rise at its last meeting, the markets have come round to thinking it will not sanction another increase of this size in December but a more modest 50 basis points. A higher than expected rise in the consumer price index, however, could throw everything up in the air again.
Michael Hewson, chief market analyst at CMC Markets UK, said: "The real risk is an upside surprise as we look for headline CPI to show further weakness and slip back further from 8.2% to 7.9%. This would also be the 4th successive monthly decline after headline inflation peaked at 9.1% in June, however this isn’t the important number as far as markets are concerned.
"Core prices are the main focus and they accelerated in September, pushing up to a 40 year high of 6.6%, and they’ve been sticky all year. Markets will be looking for evidence of a slowdown here if the narrative of slowing inflation is to take hold. The rise in the US dollar does offer cause for optimism, given it acts as a brake on higher prices. Today we’ll find out whether core prices are giving any indication of slowing down."
7.46am: Sterling, euro fall against US dollar as red wave becomes a ripple
US election results continue to roll in, with the Democrats faring slightly better than expected, although both chambers are still up for grabs.
Equities were pricing in a gridlocked government – historically a positive outcome for the stock market – but with the red wave looking like a ripple, the indexes closed significantly down.
Turmoil in the risk-on cryptocurrency sector surely didn’t help.
That was good for the US Dollar Index though, which closed above 110 having added 0.74%.
There has been a slight pullback to 109.94 this morning.
Cable dipped 1.6% as a consequence; at the time of writing the pair is trading at US$1.137, and could potentially dip further to support at US1.115.
GBP/USD awaits election results and US CPI data – Source: capital.com
EUR/USD has (just) managed to stay above parity despite closing 60 pips weaker yesterday having failed to break through the US$1.001 point- which is where resistance last stepped in on October 27.
Euro’s position will be influenced by the US year-on-year inflation rate due this afternoon.
Inflation is expected to moderate slightly from 8.2% to 8.1%, but any hawkish indications from the Federal Reserve (which would be likely if inflation runs hotter than hoped) could see the greenback gain.
Sterling ceded a percentage point in the EUR/GBP pair yesterday, which is now changing hands at a four-week high of 87.97p.
7.00am: FTSE seen lower ahead of US CPI
The FTSE 100 is expected to make a weak start to the day following heavy falls in US and Asian markets and as investors look ahead to the latest US CPI numbers out later today.
Spread betting companies are calling the lead index down by around 40 points.
US markets fell sharply in late trading as the midterms pointed to political stalemate and after cryptocurrency exchange Binance backed out of the FTX takeover prompting a rout in cryptocurrencies in the process.
This jittery market backdrop prompted a sharp sell-off in US markets after Europe had closed, with the Nasdaq leading the losses, as well as the Dow and S&P 500.
By the close the Dow Jones Industrial Average was down 647 points, or 1.95%, to 32,514, the S&P 500 tumbled 80 points, or 2.1%, to 3,749, and the Nasdaq Composite slid 263 points, or 2.5%, to 10,353.
In London, results from National Grid PLC (LSE:LON:NG.) and Haleon PLC (LSE:HLN, NYSE:HLN) are amongst the companies updating on trading today.