European shares were lower this morning in early trading (FTSE Eurofirst 300 -0.6%; FTSE 100 -0.6%).
Mining and energy stocks suffered from falling metal and crude oil prices, and banks also retreated slightly from Monday's gains.
Wall Street closed higher yesterday (Dow Jones +1.3%; S&P 500 +1.4%) on the back of stronger-than-expected home sales data; existing house sales were at their highest level for two and a half years during October. A weaker dollar lifted commodity stocks, but generally, trading volumes were light.
Previous working day closing figures:
Dow Jones: 10,450.95
FTSE All-Share: 2,735.06
FTSE 100: 5,355.50
FTSE 250: 9,270.11
FTSE AIM: 664.11
Market snapshots (at 10:12):
FTSE All-Share: -0.35%
FTSE 100: -0.30%
FTSE 250: -0.77%
FTSE AIM: -0.65%
Thoughts with Henderson New Star
Last Wednesday, Marks and Spencer (M&S) named its new chief executive as Morrisons' boss, Marc Bolland, who is credited with turning the supermarket around after it acquired Safeway. When the surprising news broke of Bolland's defection - Morrisons' stock plummeted 5%, whereas M&S's jumped 6% - some traders dubbed Bolland the ‘$1bn dollar man' due to the combined £600m swing in the companies' market values.
Morrisons' quarterly figures, released just after the announcement, showed total sales (ex-fuel and VAT) were up 9.1% to November. Investors may question whether Morrisons will continue to grow without Bolland, and how M&S will fare with him on board. Perhaps Bolland considers the suffering sales growth of M&S his new challenge: food accounts for 50% of its sales, but Waitrose is strengthening as a rival. Under Mark Price, its managing director and contender for Bolland's Morrisons' job, Waitrose has increased sales and plans to open hundreds of convenience stores next year. Food should be Bolland's forté when he moves to M&S, but some doubt how he will handle its clothing lines and the problems of its ageing customer base and distribution.
Before Bolland joins M&S in spring, there are the Christmas ‘price wars' to be waged. Asda and Tesco have promised price cuts totalling £400m, and together with Sainsbury's and Morrisons, competition will be fierce. With food inflation dropping, growth may be hard to maintain and we may witness a fight for market share. Additionally, Tesco has announced a telecoms venture with Cable & Wireless and steps towards becoming a full-service bank. The industry is becoming increasingly cut-throat and investors will eagerly await the delivery of Bolland's successor. Moreover, will Bolland himself measure up to the demands of M&S?
Interest rate outlook unchaged
FCA made demands last week
'Unsung' part of FSCS work