Trump tax plan cheers greenback

After an intraday high of 1.1796 yesterday the euro was trading -0.21% lower this morning at $1.1722. President Trump’s tax plans, slashing corporation tax, went down predictably well with investors and the dollar at the expense of other currencies. At close to 7am the dollar spot price was up 18 pips at 93.63, up close to +0.20%. Digestion of Trump’s plans remain on-going.  

However there are policy black holes – a lack of clarity on how Trump’s plans will be funded. Trump will want tax changes to drive growth but if growth is at the expense of economic progress in other areas, that raises problems and ambiguity. Which markets dislike. Much of the gainers from the plans will be smaller companies and Trump’s so-called ‘middle class’. In other words, US tax reform is not a major equities mover, for the moment. 

The higher dollar saw the pound drift lower to $1.3363 overnight, down -1.5% on the week while the euro gained on sterling, up +0.15% to 0.8774. Asian stocks were broadly up overnight with the Nikkei climbing almost +0.60%. 

• UK FTSE 100 7,313.51 +0.38%
• Dow 22,340.71 +0.25%
• S&P 500 2,507.04 +0.41%
• Nasdaq 6,453.26 +1.15%
• Nikkei 225 20,384.55 +0.58%
• DAX 12,600.03 +0.25%
• CAC 40 5,267.29 +0.49%
• Gold 1,283.80 -0.32%
• Oil WTI 52.08 -0.12%

TUI confirms +10% underlying earnings growth – despite hurricanes threat

We start with a pre-close update from travel titan TUI AG (a full annual update doesn’t arrive till 13 December). The travel and leisure operator confirms guidance of at least +10% growth in underlying earnings. TUI claims a strong summer despite severe hurricanes in the Caribbean and Florida. 

“Trading since our last update has remained in line with our expectations. Hotels & Resorts have continued to perform well, with high occupancy rates in most destinations and an increase in average revenue per bed compared with prior year.”

Overall performance for the winter season is positive, with revenues booked to date up +7% and customer volumes up +3%, TUI claims. “There is good growth in bookings for Cape Verde, Cyprus, North Africa and Thailand.” TUI shares are up +16% for the year and +8.7% year-to-date. 

Better times in the Carribbean: Shutterstock

Stagecoach confirms full-year guidance

A trading statement from Stagecoach next. There’s a lack of numbers offered but for the sixteen weeks to 19 August UK rail revenue growth is up +3.8% while UK bus regional revenues slip -0.4%. However Virgin Rail Group revenues keep aloft at +4.4%. 

Importantly, it confirms full-year earnings guidance. “We continue,” Stagecoach adds, “discussions with the Department for Transport regarding the terms of our ongoing operation of the Virgin Trains East Coast franchise.”

Stagecoach’s share price is almost -23% down on the year at 164.30p. 

Breaking news: Ryanair is threatened with legal action from the Civil Aviation Authority. Insurer Lloyds says half-year pre-tax profits come in at £1.22bn compared to £1.46bn this time a year ago. These profits though are pre-US hurricane season.