Today’s autumn statement from Chancellor George Osborne will no doubt see numerous pre-Christmas gifts distributed to promising swing voters. Transport stocks have already benefited from the leaked multi-billion pound plans for upgrading infrastructure. A buoyant housing market will go a long way to providing a stable platform for the UK to vote in 2015 and tweaks to stamp duty have once again been muted. Increased Asian expectations of more direct stimulus from China have helped drive equity markets this week. The German DAX has bobbed along the 10,000 level while the FTSE, in its lagging fashion, has also welcomed the boost to commodity stocks.
Yesterday saw the rumour mill go into overdrive, as chatter surrounding a Shell acquisition of BP took hold. Although the two oil giants have numerous operations that would complement each other, it is difficult to envisage this being something that could be easily done. Considering the combined company would account for almost 13% of the FTSE 100, regulators would no doubt place numerous hurdles in Shell’s path. Posting pre-tax profits up by over 60% has ensured that Sage has sat comfortably at the top of this morning’s FTSE risers. The UK-based accounting and payroll software company has seen a marked improvement in contract renewals, helping push the shares 4.25% higher in early trading.
Stockbroking stalwart Brewin Dolphin has also released figures to impress the markets, as discretionary fund growth has helped drive pre-tax profits up 16%.
Along with final services PMI figures for the UK, today the US will also be posting the ADP employment report. These figures can sometimes offer a clue as to how Friday’s non-farm payrolls will pan out, but traders will be all too conscious of how frequently this correlation fails to materialise. Ahead of the open we expect the Dow Jones to start 13 points lower at 17,866.