Stock markets hit record highs on trade hopes

Wall Street
The Dow has finally joined the S&P 500 and Nasdaq in record-high territory Credit: BRENDAN MCDERMID/REUTERS

                                                                                                    

Blog wrap

The Europe-wide STOXX 600 index hit a four-year high today, lifted by upbeat investor sentiment on global trade.

The index, which tracks a mixture of listed companies from the United Kingdom and 16 other European nations, reached its highest level since August 2015. It advanced steadily during October as hopes of a trade war resolution grew, and the likelihood a no-deal Brexit appeared to slip away.

Let's see if the optimism will continue into tomorrow. Louis Ashworth will be back bright and early.

Radley beats high street woes with sales growth

Luxury bag retailer Radley has beaten the high street blues after posting an 8.2pc increase in annual turnover to £92.9m. International sales jumped 51pc to £29.2m after it more than doubled is business in the US.

The handbag and accessories brand, which has 35 UK retail stores, also reported strong sales in Asia.

US investigators probe Under Armour's accounting practices

Under Armour provided kit to Wales in the recent Rugby World Cup

Under Armour has confirmed that the Justice Department, as well as the Securities and Exchange Commission, are conducting an investigation into the company over its accounting practices.

The inquiry relates to concerns that the US fashion house, which provided kit to Wales in the recent Rugby World Cup, moved sales from one quarter to another to boost the appearance of its finances.

The news came as it announced quarterly earnings which showed that revenue dipped 1pc to $1.43 bn (£1.07bn), marginally topping estimates.

An Under Armour spokesperson said that in July 2017, the company responded to "requests for documents and information relating primarily to its accounting practices and related disclosures, and the company firmly believes that its accounting practices and disclosures were appropriate".

Goldman bankers due bumper payday as it rakes in £260m fees bonanza

Goldman Sachs rainmakers Anthony Gutman, Francois-Xavier de Mallmann and Mark Sorrell are set for bumper paydays after the bank raked in $335m (£260m) of fees from UK deals, my colleague Vinjeru Mkandawire writes. She adds: 

The Wall Street firm is the top performer this year among major investment banks, trousering 7pc of total income paid out for mergers, acquisitions and stock market floats in Britain according to data compiled by Refinitiv.

It suggests City veteran Mr Gutman and Mr Sorrell, the son of the advertising mogul Sir Martin Sorrell, will be in line for major bonuses. 

Francois-Xavier de Mallmann - who is known in the City as FX - is also expected to reap a major payday.

The four unstoppable forces behind Mothercare's slide into administration

Founded in 1961 by Selim Zilkha and Sir James Goldsmith, the retailer floated on the stock exchange in 1972. In the 1980s it merged first with Habitat then with British Homes Stores. By the turn of the century it had demerged back into Mothercare plc, and in 2007 bought preschool toy chain Early Learning Centre, only to sell it off to raise much-needed cash earlier this year. 

The collapse of Mothercare UK today has not been met with huge surprise, with many pundits and customers passing judgment on its tired stores and overpriced goods. But what exactly proved to be its undoing?

Read Laura Onita's analysis to find out

Stocks soar on global trade hopes

We will be keeping to blog open a bit later again today, thanks for following along so far...

The Dow Jones, S&P 500 and Nasdaq have hit fresh highs today, building on strong performance on Friday, on US-China trade optimism. European stocks closed ahead across the board.

The rally is being driven by talks that Washington and Beijing are close to signing phase one of the trade deal.

David Madden of CMC Markets says:

"Trade hopes have lifted sentiment in global equity markets. The trading relationship between the US and the EU is moving in the right direction as Wilbur Ross, the US commerce secretary, said there might not be a need to impose tariffs on EU vehicles.

"For some time, traders were worried President Trump would give the EU, the China treatment in terms of tariffs, but the comments from Mr Ross today have given traders hope that an all-out trader war will be avoided, which is why European equity markets are driving higher. "

Handover: Europe closes in the green

Credit: Bloomberg TV

With European trading closed, the FTSE 100 didn’t quite hold on to that 1pc rise, but it was a respectable day’s gains nonetheless.

As we head into the evening, I’m handing over to my colleague LaToya Harding, who will take things from here. Thanks to everyone who followed along and commented. I’ll be back tomorrow – Louis

Goldman Sachs offers parental perks as it tries to shake boys’-club image

Goldman Sachs is trying to fight its reputation as a boys club Credit: Richard Drew/AP

Banking Editor Lucy Burton reports:

Goldman Sachs’ new chief executive David Solomon has unveiled plans to offer all new parents 20 weeks paid leave, according to a memo sent to staff this afternoon.

The Wall Street bank, which has long had an on-site creche in its London office and has also offered to pay for sex change surgery and IVF, said the benefits will take place immediately. New parents previously had 16 weeks’ paid leave.

In his memo, Mr Solomon also said the company was introducing a new program that increased the amount paid to staff for egg retrieval and egg donation.

The changes come as the bank fights to change its reputation as a conservative old boys’ club. The new perks also come a year after the banking giant became the first company in the UK to offer to ship working mothers’ breast milk home if they work overseas. 

Question for the day: Should bosses be allowed to date their staff?

Steve Easterbrook was sacked by McDonald’s over a consensual relationship with an employee Credit: Scott Olson/Getty 

With McDonald’s boss Steve Easterbrook shown the door after a consensual relationship with an employee, my colleague Sophie Smith has asked the big question:  should bosses be allowed to date their staff?

She reports:

While there’s no law against office romances, some companies are stricter than others when it comes to who senior staff members can have relations with.

What went wrong at Mothercare?

Customers leave a Mothercare shop in London Credit: REUTERS

 That’s the question retail correspondent Laura Onita has set out to answers. She writes:

The collapse of Mothercare UK today has not been met with huge surprise, with many pundits and customers passing judgment on its tired stores and overpriced goods. But what exactly proved to be its undoing?

US markets pull back gains slightly after poor factory data

With just over an hour of trading passed, US markets are still pressing ahead, but how pulled back slightly after Stateside factory data showed an unexpected fall in factory orders, which fell 0.6pc in September versus estimates of a 0.1pc drop.

As you can see, orders are a pretty volatile gauge:

Ben Marlow: It will take more than a dose of Calpol to nurse Mothercare back to health

The management of Mothercare has made some baby-brained decisions

Our Chief City Commentator Ben Marlow has given his verdict on the situation at Mothercare. He writes:

The real surprise is that it has managed to cling on for this long. The chain has lurched from one crisis to another, most of them self-inflicted, while launching a series of failed attempts to turn its fortunes around.

Read Ben’s column in full here, and don’t forget to subscribe to his subscriber-exclusive daily newsletter for his daily insight into the biggest business stories.

Dow hits record high

Over in the US, the Dow Jones Industrial Average has opened at a new record high, become the last of Wall Street’s three big indices to hit a notch above its July record.

The S&P 500 and Nasdaq had already entered new record territory, and are pushing higher today.

European stocks hit highest level in four years

With stock markets positively fired up across Europe, the continent-wide STOXX 600 index has hit its highest level since August 2015.

The US is likely to push further into record-high territory when it opens at half past.

Mothercare shares close to their worst day in eight years

Shares in Mothercare, the listed company which controls the retailer’s UK and international operations, are down around 29pc currently.

Here are its most recent big falls:

Round-up: Construction headaches, Woodford trust slashes valuations, Ryanair warns on 737 Max deliveries

Veteran fund manager Neil Woodford was a major backer of cold fusion technology group Industrial Heat

 Here are some of the day’s top stories:

Money: Are you paying above the odds for passive investments?

Today in Money: Investors are paying over the odds for basic passive investments by selecting higher-cost deals, with nearly £9.8bn left languishing in expensive funds, Investment Editor Taha Lokhandwala reports. He writes:

The higher costs are found on passive funds – which attempt to mimic the performance of an index such as the FTSE 100 or FTSE All Share – launched in the late Nineties or the early part of this century.

Such funds were generally sold through banks and insurance companies, and quickly amassed billions of pounds. The industry has moved on and competition has pushed down fees.

But many old tracker funds have remained static and are now overpriced relative to rivals. Investors could improve their returns by moving either to a cheaper fund or to a cheaper “share class” of the same fund.

MPs urge Leadsom to speed up audit reforms after Thomas Cook collapse

BEIS select committee chair Rachel Reeves Credit: Heathcliff O'Malley

MPs on the Business, Energy and Industrial Strategy select committee have written to Business Secretary Andrea Leadsom , calling for the Government to take “urgent steps” to reform the audit sector.

In a letter, committee chair Rachel Reeves said the collapse of travel firm Thomas Cook in September raised the need for changes.

Sweeping reform of the sector, including the abolition and replacement of the Financial Reporting Council, the audit watchdog, were the recommendations of two reports in the past year – one commissioned by Ms Leadsom’s predecessor Greg Clarke, and one carried out by the BEIS select committee.

However, progress appears to have slowed, with Sir John Kingman – who carried out the Clarke-backed review – recently complaining that the Government appeared to be dragging its feet.

Ms Reeves wrote:

Our inquiry has raised a number of issues, many of which we have commented on in previous Reports, especially in relation to corporate governance and audit reform. It is frustrating therefore that the Government has not acted upon previous recommendations from this committee; appears not to have learned the lessons from previous high-profile corporate failures; and has not brought forward the expected legislation required to transform to Financial Reporting Council into a more powerful regulator.

She added that the MPs encouraged their successors on the committee (which will be re-formed after the General Election) continue to pursue the topic. She said:

Urgent steps need to be taken, not least the introduction of long-overdue legislation to empower regulators, in order to mitigate against the worst impact of corporate failures on employees, consumers, suppliers and taxpayers.

FTSE 100 gains hold over 1pc as pound heads for its worst day in a week

Miners are leading the charge on the FTSE 100, with the blue-chip index up more than a percentage point amid a continued rally on trade-war hopes.

The positive sentiment is spread right across Europe, with France’s CAC just short of 1pc gains, and the DAX outperforming at 1.24pc up.

Internationally-exposed UK stocks are getting a further boost from the pound’s slightly slip today, which has the currency on track for its worst performance in six sessions. 

Boris Johnson’s spokesperson has said the transition period after Brexit would only extend to the end of 2020, by which point the PM reportedly expects a “good deal” to have been struck.

That has raised dormant fears over a no-deal Brexit, because the consensus among most analysts is that twelve months is no enough time to strike a deal – with a hard Brexit the de facto outcome if no new arrangement is reached.

Just Eat lowers threshold for Takeaway.com merger

Just Eat has found itself at the centre of a bidding war Credit:  fergusburnett.com

Elsewhere in the world of business today, there’s been a fresh move in the bidding war over food delivery firm Just Eat. My colleague Oliver Gill reports:

Just Eat has lowered the threshold for investor approval of its merger with Takeaway.com.

Three-quarters of only Just Eat shareholders need to approve the paper deal. Previously, the same proportion of Takeaway.com investors needed to support the merger.

The move puts the ball back in the court of South African internet company Prosus, which last month gatecrashed the partnership with a £5bn cash swoop for Just Eat.

Just Eat rejected the Prosus approach. On Monday it reiterated its recommendation that shareholders back the Takeaway.com deal instead.

The merger had been scheduled to be put to the vote on Dec 4. This meeting has been cancelled.

A new timetable for the Takeaway.com merger will be set out in the coming days.

More reaction...

(With the same caveats I noted in my 10:25am post)

Shakespeare Martineau insolvency partner Sean Moran says:

Mothercare entering into administration is devasting - if unsurprising - news for both its employees and its creditors. The retail stalwart could soon  become yet another fading memory on the UK high street. 

This collapse goes to show that CVAs cannot fix everything if fundamental problems faced by a business aren’t addressed properly. Mothercare  has become something of an outdated brand that suffers from intense competition - even the name itself speaks of another time. 

 Andy Brian, a partner at law firm Gordons, added:

Mothercare has already gone through a CVA process to shed under-performing stores, and sold assets such as the Early Learning Centre brand to raise cash, but it seems it cannot survive in its current form.  

Mothercare remains a successful business internationally – in Europe and Asia in particular – and it remains to be seen whether the brand will live on in the UK, perhaps as a concession within a larger format retailer or as an online only business.

Latest administration comes as business outlook continues to darken

The backdrop to Mothercare’s problems is an increasingly-worried British business sector. A fall in private sector activity intensified in the three months to October, continuing a run of declines which began a year ago. 

My colleague Ed Clowes reports:

Activity dropped by 11pc in the quarter, sinking faster than in the previous period, according to new data from the Confederation of British Industry (CBI).

The body surveyed 507 business leaders, across the UK’s retail, manufacturing, and service sectors.

They found that manufacturing output and consumer services volumes had suffered a sharp fall, while retail sales continued to plummet. 

Read more here: Business outlook darkens, according to raft of new data

Here’s how the gender balance looks across Mothercare’s operations

(Note: These are total numbers, rather than full-time equivalents.)

Full report on Mothercare

My colleague Simon Foy has a full report on Mothercare’s move to place its UK operations in administration:

Mothercare’s collapse would hurt women most of all

Though it is best known as a retailer to women, particular expectant mothers, Mothercare’s staff is also predominantly female at 90pc women overall (its main board consists of one woman and four men).

The company’s full-time equivalent staffing figures stand at just over 2,000 people, according to its most recent accounts, but the raw numbers impacted would likely be higher due to part-time staffing.

Bookies fall as MPs recommend limit on online gambling products holds

Bookmakers’s shares are suffering today, after a group of MPs recommended a £2 betting limit on online slot machine-style games, to try and fight against the damage caused by gambling addictions.

GVC Holdings, owner of Ladbrokes Coral, has been the worst hit, with its shares down around 11pc today. Rivals including William Hill are also hurting.

How Mothercare’s focus shifted away from the UK

Stores come in all shapes and sizes, but Mothercare’s accounts indicate that – by volume alone – overseas locations are now the company’s focus. Here’s how the breakdown of its locations has shifted over the past five years:

The company sold Early Learning Centre to rival The Entertainer earlier this year, in a deal valued at £13.5m. Mark Newton-Jones said Mothercare did not have the resources available to develop new ELC products annually.

Santander takes majority stake in Ebury

The deal will see Santander take a 50.1pc stake in the start-up Credit: Simon Dawson/Bloomberg 

Santander has paid £350m to acquire a 50.1pc stake in UK startup Ebury, in a bid to boost growth.

Ebury provides services for small and medium-sized companies including foreign exchange and trade finance. Santander said:

Ebury, with 900 employees working in 22 offices in 19 countries, offers a state-of-the-art proven technology platform and a unique culture supported by Ebury’s co-founders, who have raised over $134 million since inception in 2009. In 2018, the company processed £16.7 billion in payments for their 43,000 clients.

Ana Botín, Banco Santander’s chair, added:

By partnering with Ebury, Santander will deliver faster and more efficient products and services for SMEs, previously only accessible to larger corporates.

Ebury will continue to operate as an independent unit.

Company had ‘become a byword for trouble on the high street’

Mothercare entered a company voluntary arrangement last year

Here’s some more reaction to Mothercare’s administration plan.

Naturally, a lot of commentary is coming in from firms that focus on turning struggling businesses around. That means that these are companies hoping to sell their own services to retailers who may be a similar situation – but their insight is still interesting.

Julie Palmer, a partner at restructuring specialist Begbies Traynor, said:

Mothercare has become a byword for trouble on the high street, and today’s news will not be surprising to many following the company’s longstanding financial issues, having filed for a CVA last year.

The baby goods specialist hasn’t been able to meet the shift in consumer shopping habits and offer the same ease of purchasing the items from one location, as aggressive expansion strategies from major supermarkets offer customers multiple options for affordable maternity and baby products, as well as the convenience of purchasing via online outlets.

Freddy Khalastchi, a business recovery partner from accountancy firm Menzies, said:

A further CVA can’t be ruled out because it is one of the options available in an administration, but what is clear is that Mothercare’s initial attempts at cost reduction didn’t go far enough. Otherwise, it may be that revenue from its remaining stores was insufficient to support its head office and other overheads.

While more struggling retailers are clutching onto CVAs as a means of restoring profitability, it’s important to recognise that they work where stores already have a viable business model, otherwise they are only a temporary sticking plaster solution.  

Mothercare has becoming increasingly internationally-focused

Here’s a breakdown of its sales:

The company lets one company per territory operates its franchises, which are mostly in Europe and Asia. It says:

Franchise partners operate under the Mothercare trademark and ensure our customers receive a consistent best in class level of service across all territories we operate in.

Steve Dresser, a retail consultant, tweeted Mothercare have “crucified themselves” through a string of poor decisions:

FTSE 100 advances as pound weakens

Let’s check in on the markets.

The FTSE 100 is oputting in a strong performance, up around 0.7pc currently amid widespread gains.

The blue-index is benefitting from a weaker pound, which has sunk to stand just over $1.29 as doubts grow over the upcoming General Election.

The FTSE 250 is grabbing moderate gains, with about two-thirds of its constituents rising.

Here’s how profit at Mothercare’s UK and international divisions compared

Losses at home outweighed international profits in its most recent filings. As far as I can see from the accounts, the profit before tax lines for the two business sections were not separated until last year.

‘Sustained decline’

That’s the sixth straight month of slowdown for Britain’s builders.

Here are the research’s top findings from their October report into construction-sector activity:

  • Civil engineering declines at fastest pace since October 2009
  • New orders and employment continue to decrease
  • Business expectations for the year ahead remain subdued

They said:

October data pointed to a sustained decline in UK construction output, with overall volumes of work falling for the sixth consecutive month. The latest survey also revealed a sharp drop in new work, although the rate of contraction was the slowest for three months. Meanwhile, construction companies continued to reduce their workforce numbers in October, which was linked to weak order books and concerns about their near-term business outlook.

Researchers found that clients had “continued to defer decision-making on new projects in response to political uncertainty and concerns about the economic outlook”.

Duncan Brock of the Chartered Institute of Procurement & Supply said:

To say these figures are disappointing is a big understatement. Given that the next political hurdle is December’s General Election, all eyes will be on the new administration and clear direction, because at the moment there is little insight into what could possibly pull the sector out of its ditch.

Break: UK construction sector stays in slowdown

Construction activity continued to slow down in October Credit: Jason Alden/Bloomberg

 Just in: the UK construction industry continued to slow down in October, according to a closely-watched gauge of sector activity.

The IHS Markit/CIPS Construction PMI gave a reading 44.2, versus expectations of 44.1 and a September reading of 43.3 That means the slowdown was not quite as severe at September’s.

The readings are based on IHS Markit and CIPS’s survey of purchasing managers. A score above 50 indicates growth.

McDonald’s boss sacked over ‘consensual’ relationship with employee

Steve Easterbrook was sacked over a consensual relationship with employee Credit: David Paul Morris/ Bloomberg

Another big business story, this one from overnight: Steve Easterbrook, the British-born chief executive of McDonald's, has been sacked over a consensual relationship with a member of staff.

My colleague David Milward reports:

The decision was taken by the world’s largest fast food company - with 38,000 locations in more than 100 countries – at a board meeting on Friday and announced on Sunday night.

In a statement, McDonald’s said Mr Easterbrook had “separated from the Company following the Board’s determination that he violated company policy and demonstrated poor judgment involving a recent consensual relationship with an employee.”

Mr Easterbrook, a 52-year-old divorced father of three, admitted he had made a mistake in an email to company staff.

Mr Easterbrook, originally from Watford, has been credited with reviving the fast food behemoth’s fortunes. He will be replaced by the company’s US president, Chris Kempczinski. We’ll see how McDonald’s share price reacts later today.

Mothercare shares plummet

Shares in Mothercare, the listed company behind the retailer’s UK operations and international brands, are down about 27pc currently at 8.22p.

 They are down about 45pc this year.

Mothercare collapse: Reaction from Twitter

Collapse was ‘highly-anticipated’

Reacting to reports over the weekend of Mothercare’s likely demise, consultancy Retail Economics’ Richard Lim said:

This is perhaps one of the most highly-anticipated collapses on the high street. The retailer was already on life support having conducted a CVA last year. The cost-cutting operation and disposal of assets have not gone far enough to revive plummeting profits.

Years of underinvestment in the online business and its inability to differentiate itself as a specialist for young families and expectant parents as been the root of its seemingly inevitable downfall. As competition has become fiercer they have been beaten on price, convenience and the overall customer experience. 

Put simply, they have been left behind in today’s rapidly-evolving market and the board has been unable to restructure the business fast enough to cope with a new retail paradigm that has emerged.

Thousands of staff wait to hear their fate

With a notice of intent issued, Mothercare has 10 days’ grace before before creditors can begin to make claims. The company’s statement this morning suggest they already have their ducks in a row, so we should find out who will be taking over shortly.

The Sunday Times reported yesterday that Big Four auditor KPMG had been brought on to advise management.

Over 2,000 full-time staff are employed by the firm according to its latest annual report, with hundreds more (many of whom are likely to be seasonal staff) working on temporary contracts.

The announcement comes just days after Carpetright’s biggest lender launched a bid to take the struggling chain private.

Company says restructuring plans are ‘well advanced and being finalised for execution imminently’

Mothercare boss Mark Newton-Jones Credit: Mothercare/ PA

Mothercare UK and Mothercare Business Services (which provides service to Mothercare UK) are the two companies to which administrators are being appointed.

Earlier this year, boss Mark Newton-Jones said he would consider trying to sell off the UK division, though warnings of an “uncertain and volatile” trading environment may have turned potential private equity buyers off the prospect.

The company has shut dozens of stores over the past two years as part of a company voluntary arrangement, but if its 70 remaining locations also close, they will create fresh holes in the high street.

It was reported last year that Sainsbury’s was eyeing the retailer, which specialises in products for young children and expectant mothers.

In May, the company said it hoped to be a “textbook recovery case”.

The administrations are part of its management’s plans to get the company back on its feet. They said:

These notices of intent to appoint administrators in respect of Mothercare UK and MBS are a necessary step in the restructuring and refinancing of the Group. Plans are well advanced and being finalised for execution imminently.  A further announcement will be made in due course.

Mothercare enters administration

Mothercare’s collapse puts thousands of jobs at risk

 Mothercare will appoint administrators, after the group became unable to meet its “ongoing cash needs”.

The decision comes as the retailer launches a restructuring plan, aiming at its 79 UK stores afloat.

Its international business will be unaffected by the decision. The company operates over 1,000 stores over 40 territories: its overseas businesses made a £28.3m profit last year, while its UK operations lost £36.3m.

Mothercare said:

Since May 2018, we have undertaken a root and branch review of the Group and Mothercare UK within it, including a number of discussions over the summer with potential partners regarding our UK Retail business.

Through this process, it has become clear that the UK Retail operations of the Group, which today includes 79 stores, are not capable of returning to a level of structural profitability and returns that are sustainable for the Group as it currently stands and/or attractive enough for a third party partner to operate on an arm’s length basis. Furthermore, the Company is unable to continue to satisfy the ongoing cash needs of Mothercare UK.

Sky News reported last night that the listed company that owns Mothercare remains in talks with lenders over a refinancing.

The administrators will be named in a court filing later today.

Saudi Aramco chooses to keep listing at home, in blow for London

Employees work at the site of a damaged Saudi Aramco oil facility in Abqaiq last month Credit: MAXIM SHEMETOV/Reuters

After years of speculation, Saudi Aramco finally unveiled plans for a stock market listing.

The Saudi oil giant is expected to be valued around the $1.5 trillion mark – beneath the $2 trillion mark Saudi royals had been hoping for.

My colleague Ed Clowes reports:

Yasir Al-Rumayyan, Saudi Aramco’s chairman, announced yesterday that after months of delays, the state-owned oil giant would go public. The company is expected to sell around 1pc to 2pc of its business, raising as much as $40bn (£31bn) in the process, according to people familiar with the matter.

Mr Al Rumayyan also said a foreign listing had been put on hold, a move likely to disappoint investment bankers hoping to benefit from marketing the shares. Aramco is expected to pay a dividend of at least $75bn in 2020.

That decision means New York and London may have to hold their breath a little longer to get in on the action from the mega-listing.

An end in sight?

Could an end be in sight in the US-China trade war?

Asian shares surged this morning, with a broad regional gauge hitting more than 14-week highs, on the back of as growing optimism over US-China trade talks and upbeat US job data on Friday.

Commerce Secretary Wilbur Ross met with Chinese Premier Li Keqiang Monday afternoon at a regional summit in Bangkok, a person familiar with the discussion told Bloomberg.

The United States and China both said on Friday that they had made progress in talks aimed at defusing their protracted trade war, and US officials said a deal could be signed this month.

Agenda: Markets on the up

We’ll find out how the UK’s construction section is faring when PMI data is released later today Credit: zhaojiankang

Good morning. It’s scheduled to be a bit quieter than last week, with heavyweight reports giving way to a slew of retailers. Elsewhere, we’ll have continued questions over trade, and the latest meeting of the Bank of England’s Monetary Policy Committee on Thursday.

5 things to start your day

1) Audit firms are in line for a £35m fee bonanza from the high street crisis after stepping in as administrators at a string of collapsed retailers last year. The auditors charged a total of £34.6m for overseeing 36 bust companies in 2018, analysis by The Telegraph shows. Which companies stand to gain?

2) Some of Uber’s largest investors will finally be free to sell stock in the taxi firm this week – sparking fears of a slump in its share price. A lock-up period is due to expire on Wednesday, leaving scores of major backers free to trade for the first time since the company listed in May. Read more here

3) Two Bank of England rate setters are expected to break ranks this week and back an interest rate cut to prop up growth. But who are the two in question?  

4) The private equity takeover of satellite firm Inmarsat will leave it saddled with $3.9bn (£3bn) debt after being waved through by regulators. Read more

5)  Fortnum & Mason is on course to open its first standalone overseas store in Hong Kong despite a recession and violent pro-democracy protests there. Simon Thompson, Fortnum’s head of hospitality, said customers will adapt shopping habits around the protests, which generally take place at weekends.

What happened overnight

KPMG is set to axe a tenth of its UK partners in the run up to Christmas as it battles to cut costs and prepare for an industry-wide shake-up of the accounting sector. The cuts will follow performance reviews, according to the Financial Times, amid accumulating fines and scrutiny of the Big Four accountancy firm’s role in the auditing of Carillion, the construction giant that collapsed in 2018. 

In other news, McDonald’s dismissed its chief executive over a recent consensual relationship with an employee, which was deemed to violate company policy. British born Steve Easterbrook was deemed by the board to have “demonstrated poor judgment”. Chris Kempczinski, president of the McDonald’s US division, was named the new chief executive.  

Asian stock markets followed Wall Street higher Monday after unexpectedly strong U.S. jobs data helped to soothe worries American factory activity was weaker than forecast.

Benchmarks in Shanghai, Hong Kong, South Korea and Southeast Asia advanced.

Japanese markets were closed for a holiday.

The Shanghai Composite Index rose 0.6 per cent to 2,976.46 and Hong Kong’s Hang Seng advanced 1.3 per cent to 27,470.10.

Seoul’s Kospi added 1.3 per cent to 2,128.12.

Sydney’s S&P-ASX 200 added 0.3 per cent to 6,691.10. 

Coming up today

After a string of heavyweights reported last week, things are set to be a bit quieter at the start of November. Several notable retailers are likely to dominate the headlines, offering an insight into how the nation’s sickly high streets have been holding up. 

Trading statement: 4imprint, Hiscox

Economics: Construction PMI (UK), Manufacturing PMI (eurozone), Factory orders (US)

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