AO World warns over supply chain issues, CRH turns in strong third quarter
London open
The FTSE 100 is expected to open 50 points lower on Tuesday, having closed up 0.44% at 7,255.46 on Monday.
Stocks to watch
Online electrical retailer AO World warned that supply chain issues and higher costs would hit full-year earnings and revenue. The company on Tuesday said the crucial Christmas trading period “is significantly softer than we anticipated only eight weeks ago”. “As a result, we now expect full year group revenue to be flat-to-minus 5% year on year, with group Adjusted EBITDA in the range of £10m - £20m,” the company said. It reported a £5m core adjusted profit for the six months to 30 September, down 84% from last year, but up 24% from the pre-pandemic period two years ago.
CRH reported “strong growth” in profitability and further margin expansion in a trading update on Tuesday, with sales up 11% for the nine months ended 30 September to $22.8bn. The FTSE 100 building materials company said EBITDA was 15% higher year-on-year at $3.9bn, as its EBITDA margin expanded by 50 basis points to 17.1%. It said it was expecting full-year EBITDA to be higher than $5.25bn, “well ahead” of last year.
Newspaper round-up
The economic fallout from the coronavirus pandemic has made Britain’s workforce smaller, younger and more female after a sharp rise in people leaving work during lockdown, according to a report. The Resolution Foundation said that while mass unemployment had been avoided during the Covid-19 emergency, there had been an increase in people who had exited the workforce and were no longer looking for a job. - Guardian
Netflix has bought Scanline, the visual effects company that has worked on films and television series including Game of Thrones, Zack Snyder’s Justice League and Stranger Things. It is the US streaming service’s first deal to take control of a major player in the in-demand special effects industry. - Guardian
As Crossrail’s “dress rehearsal” begins, housing markets nearby to its stations are set to emerge as winners after years of delays and a budget far overrun. Despite uncertainty over when the new rail line across London might materialise, buyers of property along the route say their investment has paid off as Crossrail proves a boon for less affluent suburbs home to commuters wanting a faster journey to work and more bang for their buck. - Telegraph
Angry customers have bemoaned fresh IT failures at British Airways after its loyalty website was offline for well over a week. The airline said earlier this month that its Executive Club website would be unavailable between 13 and 17 November to carry out “essential improvements”. - Telegraph
Atom Bank is moving staff to a four-day week with no loss of pay, making it the biggest UK employer so far to shift away from the traditional five-day week. The smartphone-based bank, which employs 430 people, is moving most staff from a 37.5-hour working week spread over five days to a 34-hour week over four days, for the same monthly pay. Staff are now encouraged to work “core hours” of 9.30am to 4.30pm Mondays to Thursdays, with those who choose to switch from a five-day week to a four-day week seeing their daily hours lengthened from 7.5 hours to 8.5 hours. - The Times
US close
Wall Street stocks turned in a mixed performance on Monday as market participants digested news that Joe Biden had renominated Jerome Powell as the head of the Central Bank.
At the close, the Dow Jones Industrial Average was up 0.05% at 35,619.25, while the S&P 500 was 0.32% weaker at 4,682.95 and the Nasdaq Composite saw out the session 1.26% softer at 15,854.76.
The Dow closed just 17.27 points higher on Monday, doing very little to reverse losses recorded in the previous session.
The main item drawing investor attention on Monday was news that President Joe Biden had renominated Jerome Powell for chief of the Federal Reserve Bank.
Powell, who was initially appointed by Donald Trump and started his first term in 2018 and helped backstop the market during the first wave of the Covid-19 pandemic, will now be in charge of wrapping up the most consequential revamp of monetary policy since the 1970s.