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Global stocks weaken after reports of US-China tariff rollback

City of London

    Market wrap: European stocks close in the red

    Well that's the end of another week. The FTSE 100 closed 0.63p lower at 7,359.38 and the FTSE 250 tumbled 0.37pc to 20,357.63.

    Stocks have handed back some of this weeks’ gains after President Trump threw cold water on the hopes that all tariffs would be rolled back should phase one of the trade deal be agreed upon, writes David Madden at CMC Markets.

    "The US president said he has not agreed to scrapping all the tariffs, and this encouraged some mild selling of stocks. The door was left open to a partial roll back on tariffs, and that’s why the decline in stocks hasn’t been that bad.

    "The FTSE 100’s relatively large exposure to the commodity sector has hurt the market. Major mining and oil stocks are lower today in the wake of the Chinese trade data. The figures were released overnight, and imports declined by 6.4%, while the consensus estimate was for a decline of 7.8pc. Traders shrugged off the fact the reading came in better than expected. It was the sixth month in a row that imports dropped, hence why natural resources stocks are in decline.

    Blackstone buys British dating app business Badoo, valuing it at $3bn

    Badoo founder Andrey Andreev Credit: Mark Mackenzie

    Blackstone has acquired a majority stake in British dating app business Badoo in a deal that values the company at $3bn (£2.3bn). 

    Andrey Andreev, Badoo’s chief executive, will depart the business and sell his stake as part of the agreement.

    Badoo had begun planning to go public in the past year and formed a new brand, MagicLab, which contained its various dating apps including Bumble, Badoo, Chappy and Lumen.

    Mr Andreev confirmed the sale of his business on Friday shortly before he announced the deal to employees in Badoo’s London headquarters.

    A Badoo spokesman said that Mr Andreev’s departure from the firm he founded in 2006 is unrelated to an August report published by Forbes which accused the business of having a “toxic” work culture.

    Read the full article here

    Snap reaction

    "Friday’s mixed trade deal signals continued, unsurprisingly, once Trump got involved," says Connor Campbell of SpreadEx.

    "Though this didn’t spark mass panic, it did ensure that the markets remained in the red as the session went on. At the end of a week that has seen it repeatedly strike fresh all-time highs, the Dow Jones trickled 0.2pc lower, returning to 27600 in doing so.

    "Each day takes us closer to December 12th's general election, a fact not lost on the pound. The week has seen it gradually unwind the gains seen at the end of October, this chipping away leaving cable at a 3-week-plus low of $1.2807. Against the euro, meanwhile, sterling fared far better, spending much of early November the right side of €1.1162."

    'I won't do it' says Trump

    President Trump said that he will not remove all the existing tariffs imposed on Chinese goods as part of a deal to resolve the longstanding trade war.

    "I won't do it," he told reporters at the White House when asked about a complete rollback of tariffs he imposed on almost $400bn in Chinese goods.

    Macdonald Hotels in race to repay £200m after sale collapses

    The sale of one of Britain’s biggest privately owned hotel chains has fallen through, leaving it just weeks to find new owners or refinance almost £200m of loans.

    Macdonald Hotels said in June that an unnamed private equity investor would buy 27 of its 45 sites, with the proceeds going to repay £195m of loans from Lloyds Banking Group.

    However, The Telegraph has learned that the sale has fallen through.

    The company has now decided to sell two hotels that will “substantially reduce the group’s borrowings”. Neither the prospective new owner nor the hotels in question have been named.

    US tariffs: While we are on the subject...

    Jean-Claude Juncker said he is "a fully informed man" and that Donald Trump will not hike taxes on EU-made cars

    Donald Trump will not ramp up US tariffs on EU-made cars next week, according to Jean-Claude Juncker, raising hopes that the trade war will not intensify further.

    The President has railed against the EU because it imposes a 10pc tariff on imported American cars - far above the 2.5pc tax the US applies to cars from the EU.

    The US threatened a tax of up to 25pc with vehicles expected to be the next big front in the trade war, and a major threat to Germany in particular as its manufacturing industry is already deep in recession.

    The hike was delayed six months ago while the EU threatened retaliatory tariffs, and now the outgoing head of the European Commission said the taxes will not go up.

    Read Tim Wallace's full article here

    US-China trade deal latest...

    Trump says he has not agreed to roll back tariffs on China

    The US President also told Reuters that the deal will the signed in America ( ...no doubt this will not go down too well with his Chinese counterpart Xi Jinping).

    The news has already knocked the markets...

    Goldman Sachs' Marcus to launch investment Isa

    The Isa is expected to be available next year 

    Goldman Sachs’ consumer bank Marcus is branching out into investments by launching a stocks and shares Isa, which will be powered by online wealth manager Nutmeg, my colleague Sam Barker writes. He says:

    The Isa is expected to be available next year although neither Nutmeg nor Marcus would reveal the rates and terms of the new deal.

    Nutmeg funds have become popular in recent years as it provides customers with an app and website to pick from its investment portfolios, which vary according to how much risk the investor wants to take. The wealth manager also offers its own stocks and shares Isa.

    The new Marcus product would invest in the same Nutmeg funds and its own Isas, but be branded differently. However, there are no guarantees the Marcus account would be as competitively priced as going direct to Nutmeg.

    Marcus launched in Britain last September offering an easy-access savings account.

    Handover

    Good afternoon, LaToya Harding here... I'll be bringing you all the latest news for the rest of the afternoon until just after markets close in London.

    Across the pond, US stocks are fairly flat:

    The Dow Jones is down 0.03pc and S&P 500 is 0.06pc ahead. The Nasdaq is also down 0.04pc.

    Ikea goes grime with first Christmas ad

    There are only 47 days until Christmas and retailers are attempting to get consumers in a seasonal spending mood.

    Ikea became the latest retailer to jump on the Christmas campaign bandwagon in a bid to lure shoppers to its stores and website. 

    The 60-second television advertisement features a couple who become racked with "home shame" as they expect guests. Various objects around the house become animated and are voiced by east London grime artist D Double E. 

    My colleague Laura Onita reports:

    Businesses are expected to splash £6.8bn on Christmas advertising during the final quarter of this year, according to figures from the Advertising Association and WARC.

    Boots and Marks & Spencer also unveiled its Christmas ad on Friday. 

    M&S has used British director Jake Nave, who was responsible for Beyoncé’s Single Ladies music video, to create the ad. 

    Set to House of Pain’s early Nineties hit Jump Around, it features dancers in M&S knitwear “jumping around”. 

    Market Update: FTSE 100 set for worse day in a week

    A quick afternoon update. The FTSE 100 is the second worst performing major European index so far, just ahead of Spain's IBEX, and is set to have its worst day since last Thursday. 

    The bourse is down 0.51pc while the FTSE 250 has also dropped 0.34pc.

    EasyJet lands Thomas Cook slots for £36m

    Thomas Cook’s landing slots at Gatwick and Bristol airports have been sold to easyJet for £36m.

    My colleague Oliver Gill reports:

    The airline said on Friday that it had won the race for the collapsed travel firm's most valuable asset.

    Some 12 summer and eight winter slots at Gatwick and six summer and one winter pairs at Bristol will be transferred to the Luton-based carrier.

    Thomas Cook was placed into liquidation at the end of September after failing to secure a £1.1bn rescue from lenders and shareholders.

    Crossrail delayed again

    Bad news for commuters. Crossrail will not open until 2021 and will run £650m over budget, Transport for London announced today.

    Transport bosses admitted they need more time to develop signalling software and to get safety approvals for the railway.

    The line was originally due to open in December 2018. 

    Breaking: Pound falls below $1.28

    There it goes. Sterling has just fallen to its lowest level since mid-October as election jitters and the Bank of England's hint at rate cuts yesterday continue to weigh. 

    Games Workshop soars on "storming" first half performance 

    Games Workshop's shares reached a record high this morning, leading the FTSE 250, after the company reported a 34pc increase in pre-tax profit for its first half compared to last year.

    The maker of Warhammer fantasy figurines soared as much as 16pc as analysts at Peel Hunt called the results "storming". 

    The company's shares have risen by more than 700pc in the last 3 years.

     

    Bloomberg 2020?

    The billionaire businessman is mulling a presidential bid

    Another New York billionaire could be running for the White House next year.

    Former mayor Mike Bloomberg is strongly considering throwing his hat in the ring for the Democratic nomination despite ruling out a presidential bid last March.

    Mr Bloomberg is worried that the current field of candidates is not strong enough to defeat the incumbent Donald Trump, according to his adviser. 

    Pound treads water but is headed for weekly drop

    The pound has been steady so far this morning, hovering just above $1.281. However, the currency is heading for a weekly loss of 1pc due to election uncertainty and the Bank of England hinting at looser monetary policy.

    Neil Jones, head of currency sales at Mizuho Bank, said:

    It's a combination of domestic politics and policy. Uncertainty is on the increase into the December 12 election outcome and there's a dovish stance from the BOE. Both are weighing on the pound.

    Update: Union responds to Royal Mail injunction 

    The Communications Workers' Union has issued an official response to Royal Mail's injunction. The CWU said it "completely rejects and denies in the strongest terms" any claims that the union unlawfully interfered with the ballot process.

    Dave Ward, CWU General Secretary, said:

    It will be clear to all our members and everybody connected with Royal Mail and this dispute that the CEO and his board will go to any lengths to deny the democratic mandate of our members to stand together and fight for their future and the very future of UK Postal Services.

    Instead the company are pressing on regardless with their asset stripping plans to set up a separate parcels business and let thousands upon thousands of jobs wither on the vine.

    At the same time, the company refuses to engage in any meaningful discussions on their plans. We have made it clear that the union is available, including through the weekend, to meet Royal Mail anytime.

    Billionaires' wealth falls for the first time in a decade 

    Are the rich getting richer while the poor keep getting poorer? Not quite.

    A report by UBS and PwC showed that billionaires became a little bit less well off last year as geopolitical tensions and volatile markets reduced their wealth for the first time in a decade.

    Billionaires' wealth fell by $388bn (£302.6bn) globally to $8.539tn, the report found.

    There was a particularly sharp decline in Greater China - the second-biggest home for billionaires after the US.

    It comes after a Labour MP said last week that a Corbyn government would ban billionaires. Lloyd Russell-Moyles, the MP for Brighton Kemptown, said: “Every billionaire is a policy failure.”

    British Airways owner slides on reduced growth plan 

    Shares in British Airways owner IAG have fallen as much as 3.2pc this morning after the airline group pared growth plans.

    The company said it will almost halve its expansion, reducing expected earnings growth, as it responds to a slowing economy. 

    It will now increase capacity by 3.4pc a year between 2020-2022. The previous target was growth of 6 pc.

    The airline announced last week that profit will be lower than forecast as it continues to deal with the fallout from a recent pilot strike. 

    IAG chief executive Willie Walsh said he will provide more details of the plans later today.

    Europe opens in the red

    A slow start out of the gate for European stocks with all major indexes opening in the red. Investors appear to be catching their breath after a recent rally, spurred on by fresh trade hopes. 

    Royal Mail in legal bid to stop Christmas strike 

    An update on a potential Royal Mail strike this morning. The company will seek a High Court injunction in an attempt to stop a postal strike during its busy Christmas period. 

    Royal Mail claimed that the recent ballot of workers had "potential irregularities" which made it "null and void".

    The Communications Workers Union said it "refutes" Royal Mail's claim.

    China's exports are still falling 

    Mixed news for China's exports. They suffered their third month of decline in October and while the drop was less than expected, there were warnings on Friday of more pain to come as the trade war rumbles on.

    Even though tensions between the two countries are beginning to cool,  Beijing is struggling to get the engines of growth firing on all cylinders as demand for its goods around the world tails off.

    Official data showed overseas shipments fell 0.9pc last month, though that is much slower than the 3.2pc drop seen in September and much better than forecasts.

    Agenda: Trade truce on the way?

    The pound is closing in on $1.28

    Good morning. The pound has slipped for a fifth day in a row and is closing in on $1.28 after two members of the Bank of England's Monetary Policy Committee unexpectedly voted to cut interest rates yesterday.

    Across the pond, markets rose to record highs on Thursday as the US and China agreed to roll back tariffs slapped on each others’ goods to help get their trade truce over the line.

    5 things to start your day

    1) Javid vows £300bn investment spree as Tories tear up spending rules for general election: The Chancellor said he will not use debt to fund current spending, such as benefits and wages, but will take advantage of rock-bottom interest rates by borrowing up to 3pc of economic output per year to invest.

    2) Is Boris Johnson behind in the general election poll that matters? Think Boris has a mega poll lead going into the general election? You might have to think again, once you see the other polls that matter. Instead of asking people which party they support, an alternative way of gauging sentiment is to ask their views on the economy. And they are not good.

    3) A former Twitter employee accused of spying for Saudi Arabia worked at Amazon for three years after he left Twitter. Ahmad Abouammo, 41, was arrested in Seattle this week and accused by the US government of accessing private information from Twitter accounts that were critical of the Saudi regime.

    4) Greece’s new government will tempt rich foreigners to invest in the country with a flat tax rate as it seeks to turbocharge the country's recovery. Wealthy individuals will be able to obtain a “non-dom” status in Greece to slash their tax burden, as centre-right prime minister Kyriakos Mitsotakis steps up his plans to boost the economy. 

    5) Nick and Louise Goldsmith, the husband-and wife duo behind Hidden Valley Bushcraft, have been named Heropreneurs of the Year. At a ceremony at Plaisterers’ Hall in London yesterday night, Mr and Mrs Goldsmith, whose start-up specialises in outdoor activities and educational workshops, said the award made the many late nights spent on their company “worth it”.

    What happened overnight

    Asian stock markets were mixed Friday amid uncertainty about a possible US-Chinese agreement to roll back tariffs in their trade war.

    Shanghai advanced after Beijing said Thursday the two sides agreed to the step if they make progress on an interim deal. But Hong Kong declined and Tokyo was little-changed amid concern about possible opposition within the White House.

    The MSCI Asia Pacific Index fell 0.1pc in Tokyo. Japan’s Topix Index rose 0.3pc. Hong Kong’s Hang Seng slipped 0.6pc and the Shanghai Composite fell 0.1pc. 

    Futures on the S&P 500 Index dropped 0.2pc after the index rose to a record high on Thursday. 

    Coming up today

    Trading statement: Beazley

    Interims: Castings

    Economics: Balance of Trade (GER), Current Account (GER), Wholesales Inventories (US)