Any evidence of politicians coming back to the negotiating table was always going to be met with some kind of relief rally, so today’s move will not be a huge surprise to the market majority, but reading between the lines it would seem that this optimism could still be short lived.
Firstly, while Republicans seem to be readying something to take to the President, reports still suggest that the proposal would have “attachments”, and Obama has continuously stated that there will be no concessions from the ruling house, so this would indicate someone has to swallow what is left of their pride and give in.
It seems from reports that the Republicans have given up on their attack on Obamacare to move to pastures new, perhaps giving room for the two sides to meet somewhere in the middle on other issues. Given how aggressively Obama has defended his historical bill thus far, will he be willing to concede in other areas to protect it?
The other thing to note is that anything passed looks to at best stall, only to endure it all again in the near future. So yet again it appears the job of the US politician is simply to apply a strong foot to that poor old can on a never ending road, rather than to find a cure. So for the markets…… relief yes, solution no.WH Smith’s focus on cost cutting and profit margins gets a nod of approval from traders this morning, as the firm beat estimates with a 6% rise in profits and the announcement of a further £50 million share buyback. It marks a flying start for Chief Executive Steve Clark, who replaced Kate Swann at the helm in July.
Royal Mail took delivery of 700,000 individual applications for shares this week, which leaves them 7x oversubscribed, helped by an expected pop on the opening of trading as well as a 6% dividend. 371 of the 150,000 postal workers weren’t so keen and decided not to take up their free allotment of shares.
GKN group finance director William Seeger will step down from the board on the 25th of February in preparation for retirement next summer. He will be replaced by the current FD at Informa Adam Walker, who will step up to the board in the New Year.
French industrial production in August improved 0.2% over the previous month but were below expectations of 0.7%. The BoE will release asset purchases and interest rate decisions today at 12:00 but no change is expected particularly as uncertainty is so high in the US. In other central bank news BoJ chairman Haruhiko Kuroda speaks at 5pm and Mr Draghi from the ECB at 5:20pm.
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