A Brief Look At The Week Ahead

Thursday's meeting of the Monetary Policy Committee is not expected to prduce any surprises, with the repo rate expected to remain firmly anchored at 4.5%. Recent signs of life in the housing market, the BoE's assertion that economic activity is being under-reported, and inflation concerns all make a rate cut unlikely. Primark may have lost its main warehouse to fire last week, but few analysts believe the event represents more than a minor inconvenience to its booming sales profile. Owner, AB Foods, reports its FY results on Tuesday, with market consensus of around 585m pre-tax profit, an 11% rise on last year. On a like-for-like basis, Primark's UK sales are expected to rise by around 9%. The other key issue is the outlook for the group's British Sugar business. Investors are also expecting good things from Marks & Spencer's interim result and strategic update, also on Tuesday. Since mid-September, the retailer's share price has soared by 26% to a 433p high as investors have begun pricing in the anticipated operational turnaround. M&S will need to post a profit of at least 300m to silence the remaining sceptics. SABMiller reports its interim profit on Thursday, with slowing US sales likely to be offset by good emerging markets growth. Analysts are upbeat about the prospects of the group's newly acquired South American brewer, Bavaria, believing its emerging markets bias will allow SABMiller to grow at a faster rate than its peers. BT (Thursday) and Cable & Wireless (Tuesday) publish updates this week, with both firms posting their interim profits. Neither company's result is expected to sparkle, as they are feeling the effects of increasing competition. Among others in the spotlight this week will be Scottish Power, P&O and London Stock Exchange, all embroiled in growing takeover activity with new potential suitors emerging over the weekend. Other BB favourites in the news this week include Charles Stanley, FirstGroup, Celsis International and Punch Taverns. Highlight of the week for me will be the NW Traders Day in Manchester on Friday. I look forward to seeing you there and catching up on the latest gossip. It promises to be a great day. (If you haven't registered for the event yet, why not do it now? I'm sure you will find it the best 10 you ever invested!) Please note: I am still waiting to have a telephone line installed at the new house. Until that happens, I will be starting off the daily Traders Threads early each morning instead of the night before. I hope you will bear with me on this for a while. I'll return to the evening startup as soon as I can. Greystone (Greystone is Alan English, City Editor at MoneyAM.)

Weekend summary

WASHINGTON (AFX) -- Sky-high energy bills in the wake of Hurricanes Rita and Katrina and the impact of a strike at Boeing Co. should combine to push the U.S. trade gap to record levels in September, economists said Friday.
"It is not a pretty mix," said Michael Gregory, senior economist at Nesbitt Burns in Toronto.
The U.S. trade gap is expected to widen 4.1 to 61.4 billion in September, according to a survey of economists conducted by MarketWatch. The data will be released Thursday at 8:30 a.m.
This would be 1 billion more than the record monthly deficit of 60.4 billion set in February.
Ellen Beeson, economist at Bank of Tokyo-Mitsubishi, said the big driver of the deficit was the price of petroleum.
Prices of imported goods had the biggest increase in 15 years in September, as prices for imported natural gas rose 28.8.
Import prices for October will be reported across town at the Labor Department at the same time Thursday as the trade data is released at the Commerce Department. Economists expect prices fell 0.1 in October after soaring 2.3 in September.
Surprisingly, Beeson said, a survey of port executives found trade activity was not slowed significantly in September despite the hurricanes.
"From what we gathered from the ports in the Gulf Coast, only one port was shut and most of their imports were diverted to other areas that remained open," he added.
Gregory of Nesbitt Burns said that exports will fail to get a lift in September from Boeing deliveries. Partly as a result of a strike, only two planes were shipped in September, down from 25 in August, he pointed out.
Avery Shenfeld, senior economist at CIBC World Markets Inc, said that the only utility of the report will be to see how it stacks up against the government's assumptions used in estimating third-quarter gross domestic product.
The economy grew at a 3.8 annual rate in the July-September quarter, according to the advance government estimate that assumes a 62.8 billion trade gap in September.
Shenfeld also said that the record trade gap should not have an impact on financial markets, which will be looking for the trend in coming months.
"The most trade-sensitive market, foreign exchange, has been ignoring the bad news on U.S. trade deficit and instead favored dollars due to Fed hikes," he added.
The special factors boosting the trade gap in September should reverse in coming months, according to economists.
Beeson said that consumer spending should slow in the fourth quarter due to the high energy prices, and that this should begin to trim the trade deficit.
The other big release is the November consumer-sentiment report from the University of Michigan, to be released Friday. Economists expect the index to rebound from a 13-year low of 74.2 in October to about 76.6.

2005-11-06 09:26:49
Natural gas slumps to lowest mark since Aug, crude lower in US trade
SAN FRANCISCO (XFN-ASIA -- Natural-gas futures closed Friday at their lowest
level since August, down almost 13 pct for the week, while crude-oil futures
fell over 1 usd a barrel to end the week with a loss of 1 pct, dealers said.

Good morning traders!

In Asia this morning, the Hang Seng was down 215.99 points at 14,369.80 at the mid-point while the Nikkei closed down 14.36 points at 14,061.60.

Oil prices were weaker in Asian trade as mild weather in the northern hemisphere calmed concerns over demand for heating oil. New York's main contract, light sweet crude for delivery in December, was down 44 cents to $60.14 a barrel from $60.58 in US trading Friday.

Early broker notes:

WHITBREAD INITIATED 'SELL' AT DKW; PRICE TARGET 850P
COMPASS CUT TO 'HOLD' FROM 'BUY' AT DKW
MCCARTHY & STONE CUT TO 'NEUTRAL' VS 'BUY' AT MERRILL LYNCH
INTERMEDIATE CAPITAL GROUP UPGRADED TO 'BUY' VS 'ADD' AT DKW

Happy trading!

G.

LONDON (AFX) - Leading shares are set to open the session flat as the market pauses for breath after 200 point plus gains last week with continued bid fever in the weekend press offset by caution ahead of the Bank of England's rate decision on Thursday, dealers said.
According to spread bettor firm CMC, the FTSE 100 is seen opening 1 point higher at around 5425, after closing on Friday at 5423.6, and having notched up its biggest weekly gain in 2-1/2 years.

MARKETS
Tokyo: Nikkei midday 14,061.60 down 14.36
Hang Seng midday 14,369.80 down 215.99

TODAY'S PRESS
* CBI urges Brown to fix 10 bln stg 'black hole' in public finances; employers steer collision course with chancellor - FT
* Royal Dutch Shell projects 'over-reliant' on contractors; concern that handing over critical exploration and production functions is linked to spiraling costs - FT
* Steel company valuations poised for a fall as increased Chinese output is cutting its reliance on imported supplies; China, for long the main driver of surging demand, making more of its own steel, causing a potential excess of supply in other parts of the world - FT
* Hargreaves Services, the UK's biggest independent importer of coal, planning to float on AIM - FT

PRESS COMMENT
FT
THE LEX COLUMN comments on Hedge fund returns (these are driven more by beta than alpha), Capital accounts, Italian economy (it would be fitting if one of Berlusconi's parting gestures was to impede his successor's ability to act where he has not)
Independent
Small Talk: Stephen Foley comments on Boustead, Trakm8 (will be valued at one-third of the value it hoped for when it began planning for a float in May), First Artist (doing well), Hargreaves (joining AIM)
Times
Luminar (Alchemy Partners understood to be in exclusive talks to acquire the entertainment division of Luminar)

Good morning all.

End-of-day Market Summary

a very late hello!