HSBC profits fall less than anticipated, Whitbread swings to first-half loss
London open
The FTSE 100 is expected to open 13 points higher on Tuesday, having closed down 1.16% on Monday, at 5,792.01.
Stocks to watch
HSBC Holdings said it planned to move to a fee-based businesses model as it unveiled a less-than-expected 35% fall in third quarter profits. Pre-tax profit for the three months to 30 September came in at $3.1bn, compared with a $2.07bn average of analysts' estimates compiled by the bank. Losses from bad loans were forecast to be at the lower end of the $8bn - $13bn range set out earlier this year, HSBC said. "This latest guidance, which continues to be subject to a high degree of uncertainty due to Covid-19 and geopolitical tensions, assumes that the likelihood of further significant deterioration in the current economic outlook is low," the bank added.
Whitbread posted a 76.9% plunge in revenue in its first half on Tuesday, to £250.8m, as it swung to an adjusted loss of £376.4m, from a profit of £235.6m last year. The FTSE 100 Premier Inn operator said that reflected the closure of the majority of its hotels and restaurants for a large part of the period. It said that UK occupancy levels had steadily improved on a weekly basis since reopening, averaging 51% in August, while UK restaurant performance was boosted by the impact of the ‘Eat Out to Help Out’ scheme.
BP saw its losses narrow sharply over the three months to September thanks to the absence of "significant" exploration write-offs or impairment charges. On a reported basis, the oil major posted -$0.5bn of red ink for the quarter, which compared favourably with the $16.8bn in losses that it turned in during the preceding quarter. In underlying terms, it even managed to turn in a profit of $0.1bn on a replacement cost basis, with the bottom line helped by the absence of big write-offs together with the recovery in oil and gas prices, and demand. The group's trading arm however posted a significantly lower oil trading result.
Newspaper round-up
Young people in the UK are more than twice as likely to lose their jobs compared with older workers, according to a study that documents the growing divisions in the workplace since the Covid-19 pandemic hit in March. In the past two months, the proportion of people who lost their job aged 16 to 25 was 11.1%, compared with 4.6% for those aged 26 and over, academics at the London School of Economics found. - Guardian
Business leaders would support tougher employment laws and a higher minimum wage to protect workers from exploitation and poverty during the second wave of Covid-19, according to a report. The Centre for Progressive Policy (CPP) said urgent legal reforms were needed in the jobs market to prevent extreme levels of financial insecurity, in-work poverty and worker exploitation during the coronavirus emergency. - Guardian
Business confidence in Germany has taken a severe knock as the economic damage caused by a second Covid wave spreads to the “last stronghold” of Europe. Fears of a double dip downturn in the region’s largest economy mounted after the Ifo Institute’s closely watched monthly business survey slipped for the first time in five months. - Telegraph
Small business owners have begun mimicking the controversial tactics deployed by the tycoon behind Britain’s biggest serviced offices provider to get out of contracts. IWG creates special-purpose vehicles for its leases, which means that the parent company cannot be pursued if the vehicle fails to pay rent. The company, which owns Regus, was founded by Mark Dixon, 60, who is based in Monaco and is its chief executive and biggest shareholder. - The Times
World leaders have spent trillions protecting their citizens from the economic consequences of the pandemic, but the bill is hanging most heavily over poorer countries. Economists say that without sustained international effort, developing countries will suffer permanent scars that could wipe out a decade of progress in reducing poverty. Crippled by the costs of supporting their economies, some will be driven to the verge of defaulting on debts. - The Times
US close
Wall Street stocks closed sharply lower on Monday, with the Dow Jones registering its worst performance since early September after the US reported a daily record for new Covid-19 cases over the weekend.
At the close, the Dow Jones Industrial Average was down 2.29% at 27,685.38, while the S&P 500 was 1.86% weaker at 3,400.97 and the Nasdaq Composite saw out the session 1.64% softer at 11,358.94.
The Dow Jones closed 650.19 points lower on Monday, extending losses recorded at the end of last week as stimulus talks and the upcoming US general election remained firmly in focus.
Monday's principal focus was news that the US had recorded a surge in new cases on Friday and Saturday, with 83,000 fresh infections on both days after a series of outbreaks across the Southern states, according to Johns Hopkins University, topping the previous all-time high of roughly 77,300 seen back in July.
On Sunday, White House chief of staff Mark Meadows said that the US would now likely be unable to get control of the Covid-19 pandemic following the surge in new cases.