FTSE 100 lifted by Bank of England stimulus

FTSE NEWS

Fresh economic stimulus from the Bank of England (see Economic Update below) helped UK shares end the day in positive territory on Thursday (5 November). The FTSE 100 finished 0.33% higher at 5,902.62.

• On Monday (9 November), the Confederation of British Industry will reveal what conditions are like for smaller manufacturing firms as part of its quarterly SME monitor.
• Nielsen and Kantar release the latest supermarket market share figures on Tuesday (10 November).
• The Organization of the Petroleum Exporting Countries (OPEC) releases its monthly oil market report on Wednesday (11 November).
• On Thursday (11 November), the Office for National Statistics (ONS) reveals estimated economic growth figures for the third quarter.
• The Insolvency Service ends the week on Friday (13 November) with a round-up of the monthly personal and business insolvency statistics.

SECTOR IN FOCUS

The two-week ‘firebreak’ lockdown in Wales caused new car sales in the UK to plunge to a nine-year low, new data reveals.
Figures from the Society of Motor Manufacturers & Traders (SMMT) show sales of new cars fell 1.6% year-on-year to 140,945 in October – the weakest October since 2011.
The SMMT blamed the Welsh government’s two-week lockdown for “more than half of the month’s losses” and warned England’s lockdown would also hit sales.
The organisation now forecasts total new car sales to be in the region of 1.56m this year, some 750,000 fewer than last year, making it the weakest year since 1982. It estimates the fall in sales will cost the industry £22.5bn in lost turnover.
That is clearly not good news for FTSE-listed car dealers such as Cambria Automobiles plc (CAMB), Pendragon plc (PDG) and Vertu Motors plc (VTU).

ECONOMIC UPDATE

The Bank of England (BoE) pumped a further £150bn into the economy on Thursday (5 November) in a bid to keep the economy’s recovery on track.
The central bank’s intervention comes days after data from IHS Markit/CIPS showing a sharp fall in growth in the UK’s dominant services sector, which accounts for about 80% of total output.
The slump has caused some analysts to speculate that the UK could be heading for another recession, which is defined as two consecutive quarters of negative growth.
While the BoE thinks the economy will avoid a new recession, it believes the lockdown in England and Wales will cause the economy to shrink by 2% in the last three months of the year.
BoE governor Andrew Bailey also pledged to do everything in its power to protect the economy.
According to the BBC, he said: “We are here to do everything we can to support the people of this country – and we’ll do it and will do it quickly.”

FUND WATCH

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COMPANY ANNOUNCEMENTS

12 November – In August, analysts at Goldman Sachs gave WH Smith plc (SMWH) a “buy” rating on the expectation that traffic at airports, railway stations and the High Street would gradually recover. With England and Wales back in lockdown, it may need to wait a little longer for that to come true. WH Smith reports its full-year results on Thursday (12 November).

12 November – Aston Martin Lagonda Global Holdings plc (AML) has lost 90% of its value since it floated two years ago, highlighting the struggles the luxury sportscar maker has faced since going public. Mercedes has just taken a 20% stake in the firm and it is hoped long-term this could result in a change of fortunes. But investors should not get their hopes up when Aston Martin publishes its preliminary results on Thursday (12 November).