HomeServe buys CET Structures, Network International revenues rise

London open

The FTSE 100 is expected to open eight points lower on Wednesday, having closed up 0.76% at 7,277.62 on Tuesday.

Stocks to watch

HomeServe said it had bought CET Structures, a UK home emergency assistance business, for £53m and added that current trading was in line with guidance. CET provides emergency plumbing, heating and electrics services to home insurance policy holders on behalf of leading consumer brands, via its digital claims handling and job management platform.

Network International reported a 19% improvement in total third quarter revenue year-on-year, with merchant solutions revenue ahead 38% and issuer solutions revenue 9% firmer. The FTSE 250 payment technology company said that given the ongoing recovery, the pace of execution and expected recognition of Mastercard partnership revenue in the fourth quarter, it expected the core Network business excluding DPO to deliver revenues “slightly higher” than those recorded in 2019, in line with previous guidance. DPO consolidation in the fourth quarter, following acquisition, was expected to provide an incremental mid-high single digit million revenue contribution to the group.

Newspaper round-up

Google parent Alphabet continued big tech’s profitable march through earnings season, reporting third-quarter results that exceeded Wall Street’s expectations and a near doubling in profits as advertisers chased the consumer shift to online. Alphabet’s revenue rose 41% to $65.12bn over the last three months, its largest revenue figure in 14 years. It posted a profit of over $21bn, nearly three times the figure it reported before the pandemic. - Guardian

The US communications regulator has voted to revoke China Telecom’s licence in America over national security concerns in the latest pushback by Washington against what it deems possible infiltration of key networks by Chinese companies. The decision by the US Federal Communications Commission (FCC) means China Telecom Americas must now discontinue US services within 60 days. China Telecom, the largest Chinese telecommunications company, has had authorisation to provide telecommunications services for nearly 20 years in the United States. - Guardian

Ministers will need to cut public spending by a further £5bn to fund the Chancellor’s planned savings drive as extra Covid costs threaten to hit budgets, economists have warned. Deutsche Bank said unprotected budgets for organisations such as universities and councils could be squeezed by Rishi Sunak in his Spending Review on Wednesday due to prolonged pandemic-related costs that risk ramping up funding pressures in the coming years. - Telegraph

The Bank of England is unlikely to raise interest rates despite mounting speculation that policymakers will attempt to rein in the recent spike in inflation, according to HSBC. The markets expect the Bank to lift rates by 15 basis points to 0.25 per cent at its meeting on November 4. However, analysts at HSBC suggested this may be an overreaction to comments made by rate setters in recent weeks. - The Times

Monzo, one of the UK’s most prominent digital banks, is in talks to raise hundreds of millions of pounds at a sharply higher valuation despite a string of recent setbacks, including curtailing its expansion in the US. It is in discussions with investors about raising at least £300 million in new funding. Approximately £200 million is expected to be provided by new shareholders, the remainder from existing backers, according to Sky News. - The Times

US close

Wall Street stocks ended the session much the same as they started them on Tuesday.

At the close, the Dow Jones Industrial Average was up 0.04% at 35,756.88, while the S&P 500 was 0.18% firmer at 4,574.79 and the Nasdaq Composite saw out the session 0.06% stronger at 15,235.71.

The Dow closed 15.73 points higher on Tuesday, building on record-setting gains registered by the index in the previous session.

Facebook shares were in the red after the social media behemoth posting earnings that topped expectations on the Street but fell short on both revenue and monthly active users, while UPS traded higher on the back of strong beats on profit and revenue across all segments and 3M stock advanced after beating earnings on the top and bottom lines.

Hasbro reported strong revenue, operating profit and earnings growth, and Eli Lilly boosted full-year guidance despite reporting a drop in profits during the third quarter of its trading year.