With no major corporate results scheduled for release at the end of a week shortened by the bank holiday, all eyes will be on the reaction to President Trump’s decision last night to withdraw the US from the Paris climate accord as he negotiates a global agreement to “put American workers first”. China and the European Union are expected to announce a new joint commitment to combat global warming today after politicians and some of the world’s biggest businesses, including energy companies (who have long been pouring money into sustainable energy alternatives), criticised Mr Trump’s decision and oil prices dropped. Shell, BP, IBM, GE, Facebook, Google and Apple are among the multinationals that are unhappy about the move. Lloyd Blankfein, chief executive of Goldman Sachs, took to Twitter for the first time to say the decision was “a setback for the environment and for the US’s leadership position in the world”.
In the UK falling fashion sales continue to hurt the high street and sent overall like-for-like sales down by 1.3 per cent in May, according to the latest sales tracker from BDO. Our retail editor, Deirdre Hipwell, has more here.
Trade union membership has fallen to a level last seen on the eve of the Second World War, according to the TUC, which also says that members of the black, Asian and ethnic minority communities are a third more likely to be in insecure work than white workers. You can read more about it here.
Photo-Me International, Europe’s biggest seller of photo booths, has seen its turnover fall for years. Today, in a trading update, it said that it expected 20 per cent revenue growth for the full year to 30 April 2017, reflecting the success of its strategy of investing in new products and growing its laundry business. We also have an update from Acacia Mining about the situation in Tanzania, where it has been accused by the government of under-reporting shipments of gold and copper concentrate to avoid tax and royalty payments.
The latest UK construction purchasing managers’ index is out at 9.30am. The index has hovered between 52 and 55 since September, and Samuel Tombs at Pantheon sees no convincing reason to expect a sudden movement in May. Housebuilding activity has probably been supported by the Help to Buy scheme. But commercial construction work is likely to have remained depressed by the Brexit risk, and the general election might have caused some civil engineering work to be postponed. As a result, he thinks that the PMI declined to about 52.5 in May, from 53.1 in April. The consensus forecast is 52.6.
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The troubled engineering contractor Amec Foster Wheeler holds its annual general meeting today. Shareholders will no doubt be keen to discuss the company’s agreed £2.2 billion all-share takeover by rival Wood Group. The deal, which will be put to a shareholder vote on June 15, will provide greater certainty for Amec, which is struggling to deal with £1 billion of debt, and broaden Wood Group’s exposure to non-oil and gas related activities.
Markets snap
It’s the first Friday of the month and that means jobs day in the US, with publication of the May non-farm payroll figures from the US government. Eric Lascelles, chief economist at RBC Global Asset Management, believes that the consensus expectation of 177,000 new non-farm jobs last month “seems about right for an economy that is moving nicely but simultaneously maturing”. The numbers come amid expectations of a further US interest rate hike at June’s Federal Reserve policy meeting, but also amide doubts among economists that the Trump administration can achieve its goal of 3 per cent annual GDP growth because the labour market is already near full employment.
For the fourth and final instalment of our UK election tour, Robert Lea, industrial editor, visited the Port of Dover.
And finally, if you get a chance, tune into our latest Business podcast where I join Robert Lea and Alex Ralph to discuss the outlook for the UK economy, investment and the downward pressure on dividends.
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