Asian stocks hit three-month high amid rising hopes of US-China trade deal
Agenda: Google’s search engine growth is slowing down at a worrying rate
Good morning. Asian stocks hit a three-month high overnight following a record-breaking day on Wall Street amid raised hopes of an imminent trade deal and the expectation of a further rate cut from the Federal Reserve this week.
Elsewhere, Boris Johnson’s government will make another attempt this evening to secure a December general election after it failed to win the necessary number of votes in Parliament yesterday to go to the polls.
5 things to start your day
1) The number that shows Google’s search engine slowing down at a worrying rate: Financial results released by Google’s parent company Alphabet showed that paid clicks on its search engine – a crucial measure of growth – had grown by just 18pc year-on-year in the third quarter of the year. A year ago, growth in paid clicks was 62pc.
2) Britain has millions more graduates – so why has the economy got so little to show for it? “Education, education, education” ran his slogan, and 22 years on from his first election victory that target of university entrants was finally hit this year. Was it worth it?
3) The accounting scandal surrounding Goals Soccer Centres has deepened after the five-a-side operator called in fraud investigators. Evidence has been handed over to the Serious Fraud Office (SFO) just days after the company’s stock was delisted from the London Stock Exchange amid problems with its accounts.
4) Which car makers will survive the electric revolution? The car industry is bracing for more over the next few years than it has experienced in the past century as the electric revolution combines with the advent of self-driving technology and other innovations such as vehicle sharing systems.
5) Former Skyscanner and Just Eat backer Vitruvian Partners has won the race to buy Sykes Cottages in a deal worth £375m. The sale seals a healthy return for City investment firm Livingbridge, which bought Sykes in 2015 for £54m. Sykes’ portfolio of holiday homes has grown from around 5,000 to 17,500 in the last five years.
What happened overnight
Asian shares rose to a three-month peak on Tuesday after Wall Street hit all-time highs amid hopes of progress in US-China trade talks and the expectation that the Federal Reserve will cut interest rates later this week.
Japan’s Nikkei led the way with a rise of 0.5pc to reach ground last trod a full year ago, while Shanghai blue chips dithered either side of flat.
US President Donald Trump said on Monday he expected to sign a significant part of the trade deal with China ahead of schedule but did not elaborate on the timing.
In Hong Kong, the Hang Seng index dropped 0.4pc percent, or 106.68 points, to 26,784.58.
Coming up today
Don’t count on “anything revolutionary” from BP’s third quarter results today, says Nicholas Hyett, of Hargreaves Lansdown. With chief executive Bob Dudley preparing to hand over the reins of the firm in February, the results should be free of surprises, so investors will be focusing on the company’s fundamentals instead.
With oil prices a little lukewarm, the company’s write-downs and asset divestments have been forcing it to accumulate more debt that it had planned. Production and cash generation will be in focus, with the former likely to have been affected by hurricanes in the Gulf of Mexico.
Barclays analysts say the energy giant is on track to meet its 2021 targets, but has a continued fight on its hands over its role in the face of climate change activism.
Interim results: Bloomsbury Publishing, BP, Coca-Cola European Partners
Trading statement: Hunting, Riverstone Energy, Standard Chartered Economics BoE consumer credit and mortgage approvals (UK)