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| Mario Draghi: eurozone growth depends on central bank support - as it happened | |
| (about 1 hour later) | |
| A downbeat end to the week for equities saw declines in most major markets. Worries about the Republican’s prospects of getting their tax cut proposals left Wall Street lagging, while some downbeat results and broker downgrades undermined European shares. The final scores showed: | |
| The FTSE 100 finished down 6.26 points or 0.08% at 7380.68 | |
| Germany’s Dax dropped 0.41% to 12,993.73 | |
| France’s Cac closed 0.32% lower at 5319.17 | |
| Italy’s FTSE MIB fell 0.51% to 22,092.95 | |
| Spain’s Ibex ended down 0.78% at 10,010.4 | |
| But in Greece, the Athens market added 1.58% to 712.46 | |
| On Wall Street, the Dow Jones Industrial Average is currently down 82.9 points or 0.35%. | |
| On that note it’s time to close for the day. Thanks for all your comments, and we’ll be back next week. | |
| Carillion is one of the day’s biggest fallers following another profit warning. Jill Treanor writes: | Carillion is one of the day’s biggest fallers following another profit warning. Jill Treanor writes: |
| Carillion, one of the construction companies working on the HS2 London to Birmingham rail line, is racing to refinance its business after issuing its third profit warning in five months and suffering a collapse in share price. | Carillion, one of the construction companies working on the HS2 London to Birmingham rail line, is racing to refinance its business after issuing its third profit warning in five months and suffering a collapse in share price. |
| Shares in the company, which is at the heart of several major building projects in the UK, were suspended eight times on Friday after the shock update to the City that it would breach the terms on its existing lending at the end of the year. | Shares in the company, which is at the heart of several major building projects in the UK, were suspended eight times on Friday after the shock update to the City that it would breach the terms on its existing lending at the end of the year. |
| The shares crashed 60% when the stock market opened on Friday – to their lowest ever levels – and were still down nearly 40% near the end of the day’s trading. At this price, about 25p, the shares are barely a tenth of the 240p level seen at the start of 2017 and values the company at just £120m. | The shares crashed 60% when the stock market opened on Friday – to their lowest ever levels – and were still down nearly 40% near the end of the day’s trading. At this price, about 25p, the shares are barely a tenth of the 240p level seen at the start of 2017 and values the company at just £120m. |
| Carillion has debts of £1.6bn and analysts expect the company – known for its work on expanding the main stand at Liverpool’s Anfield football ground and its ongoing development of Battersea power station – to have to ask its lenders to swap their debt for shares. | Carillion has debts of £1.6bn and analysts expect the company – known for its work on expanding the main stand at Liverpool’s Anfield football ground and its ongoing development of Battersea power station – to have to ask its lenders to swap their debt for shares. |
| The company employs 30,000, two-thirds of them in the UK, and has contracts with the Highways Agency, Network Rail and the Ministry of Defence. It is building hospitals including Merseyside’s Royal Liverpool and also has a support services operation which has maintenance contracts for buildings. | The company employs 30,000, two-thirds of them in the UK, and has contracts with the Highways Agency, Network Rail and the Ministry of Defence. It is building hospitals including Merseyside’s Royal Liverpool and also has a support services operation which has maintenance contracts for buildings. |
| The government, one of its major customers, said it was being kept informed. | The government, one of its major customers, said it was being kept informed. |
| The full story is here: | The full story is here: |
| Meanwhile over in Athens thousands of Greeks chanting anti-austerity and anti-capitalist slogans are marching through the city centre to mark the anniversary of the 1973 Polytechnic uprising against military rule, writes Helena Smith. | Meanwhile over in Athens thousands of Greeks chanting anti-austerity and anti-capitalist slogans are marching through the city centre to mark the anniversary of the 1973 Polytechnic uprising against military rule, writes Helena Smith. |
| Greek riot police, bracing for possible violence, are out in force. Communist party members, holding red flags aloft, are leading the protest and using it to decry the”barbaric” policies enforced on workers. | Greek riot police, bracing for possible violence, are out in force. Communist party members, holding red flags aloft, are leading the protest and using it to decry the”barbaric” policies enforced on workers. |
| “Brussels you won’t be able to disentangle yourself from the left” is among the chants currently wafting over the capital. Anti-US slogans are also rife with demonstrators deploring the agreements the leftist led government recently signed with Washington during official White House talks between the Greek prime minister Alexis Tsipras and US president Donald Trump. | “Brussels you won’t be able to disentangle yourself from the left” is among the chants currently wafting over the capital. Anti-US slogans are also rife with demonstrators deploring the agreements the leftist led government recently signed with Washington during official White House talks between the Greek prime minister Alexis Tsipras and US president Donald Trump. |
| Global markets are shrugging their way towards the end of the week, says Connor Campbell, financial analyst at Spreadex: | Global markets are shrugging their way towards the end of the week, says Connor Campbell, financial analyst at Spreadex: |
| The Dow Jones dipped 50-ish points after the bell, keeping the right side of 23400 as investors (very lightly) fretted over the Republicans’ ability to get their tax plan through Congress. The dollar, meanwhile, could only ease, rather than eradicate, the day’s losses, with the greenback down 0.1% against the pound, 0.2% against the euro and 0.5% against the yen as investors process the news that Robert Mueller subpoenaed more than a dozen of Trump’s campaign officials back in October. | The Dow Jones dipped 50-ish points after the bell, keeping the right side of 23400 as investors (very lightly) fretted over the Republicans’ ability to get their tax plan through Congress. The dollar, meanwhile, could only ease, rather than eradicate, the day’s losses, with the greenback down 0.1% against the pound, 0.2% against the euro and 0.5% against the yen as investors process the news that Robert Mueller subpoenaed more than a dozen of Trump’s campaign officials back in October. |
| Over in the Eurozone the euro’s gains continued to cause a headache for the region’s indices. The DAX slipped 0.1%, the CAC 0.4% and the IBEX 0.8%, cementing a rather miserable week for the trio. | Over in the Eurozone the euro’s gains continued to cause a headache for the region’s indices. The DAX slipped 0.1%, the CAC 0.4% and the IBEX 0.8%, cementing a rather miserable week for the trio. |
| As for the FTSE, despite a relatively flaccid performance by the pound, and the reversal of early losses in the commodity sector, the UK index just couldn’t get anything going this Friday. Instead it sat flat around 7390, preventing from taking off thanks, in part, to United Utilities and Severn Trent. | As for the FTSE, despite a relatively flaccid performance by the pound, and the reversal of early losses in the commodity sector, the UK index just couldn’t get anything going this Friday. Instead it sat flat around 7390, preventing from taking off thanks, in part, to United Utilities and Severn Trent. |
| The UK water sector was hit by a downgrade on United Utilities from HSBC analysts, who cut their recommendation from buy to hold. | The UK water sector was hit by a downgrade on United Utilities from HSBC analysts, who cut their recommendation from buy to hold. |
| Bitcoin reached an all-time high of $8000 after reports that a software upgrade which could split the cryptocurrency in two was going ahead. | Bitcoin reached an all-time high of $8000 after reports that a software upgrade which could split the cryptocurrency in two was going ahead. |
| The price had fallen last week on suggestions the upgrade would be suspended. The move would mean owners of Bitcoin would in theory also hold the new spin-off, and sell it at a profit. | The price had fallen last week on suggestions the upgrade would be suspended. The move would mean owners of Bitcoin would in theory also hold the new spin-off, and sell it at a profit. |
| Bitcoin has risen more than 700% this year and is on track for its best week since July. David Cheetham, chief market analyst, at XTB said: | Bitcoin has risen more than 700% this year and is on track for its best week since July. David Cheetham, chief market analyst, at XTB said: |
| Major fundamental concerns remain as to the efficacy of Bitcoin but for now price remains in a strong uptrend and many observers experiencing FOMO (fear of missing out) are looking at any drops as buying opportunities. | Major fundamental concerns remain as to the efficacy of Bitcoin but for now price remains in a strong uptrend and many observers experiencing FOMO (fear of missing out) are looking at any drops as buying opportunities. |
| After showing good gains on Thursday, US markets are on the slide again. | After showing good gains on Thursday, US markets are on the slide again. |
| With the latest results season coming to a close and no major economic data due, investors are focused on political issues, especially concerns about the Republicans’ ability to get their tax reforms through Congress. | With the latest results season coming to a close and no major economic data due, investors are focused on political issues, especially concerns about the Republicans’ ability to get their tax reforms through Congress. |
| The Dow Jones Industrial Average is down 66 points or 0.28% while the S&P 500 opened 0.14% lower. But the Nasdaq Composite has bucked the trend, opening broadly flat. | The Dow Jones Industrial Average is down 66 points or 0.28% while the S&P 500 opened 0.14% lower. But the Nasdaq Composite has bucked the trend, opening broadly flat. |
| One standout performer is retailer Abercrombie & Fitch. After more than a year of declines, it reported strong quarterly sales growth of 4% and forecast postive sales for the forthcoming holiday period. Its results were boosted by a strong performance from its surfwear brand Hollister. | One standout performer is retailer Abercrombie & Fitch. After more than a year of declines, it reported strong quarterly sales growth of 4% and forecast postive sales for the forthcoming holiday period. Its results were boosted by a strong performance from its surfwear brand Hollister. |
| The company, which failed to sell its business in July, saw its shares jump 20% following the latest figures. | The company, which failed to sell its business in July, saw its shares jump 20% following the latest figures. |
| Shares in Carillion have fallen from about 240p at the beginning of this year to 28p today: | Shares in Carillion have fallen from about 240p at the beginning of this year to 28p today: |
| US homebuilding jumped to a one-year high in October as communities hit by hurricanes started to replace homes damaged by flooding. | US homebuilding jumped to a one-year high in October as communities hit by hurricanes started to replace homes damaged by flooding. |
| Housing starts jumped by 13.7% to a seasonally adjusted annual rate of 1.29 million homes, the Commerce Department said. It was the highest level since October 2016. | Housing starts jumped by 13.7% to a seasonally adjusted annual rate of 1.29 million homes, the Commerce Department said. It was the highest level since October 2016. |
| Economists polled by Reuters had forecast a smaller number, at 1.18 million homes. | Economists polled by Reuters had forecast a smaller number, at 1.18 million homes. |
| The increase in starts ended three consecutive monthly declines. | The increase in starts ended three consecutive monthly declines. |
| Benchmark Brent crude oil is currently up 1.2% or 72 cents at $62.05 a barrel. | Benchmark Brent crude oil is currently up 1.2% or 72 cents at $62.05 a barrel. |
| But it is still on course for the first weekly loss in six, as Russia’s reluctance to cut production fuels concerns of oversupply. Prices are expected to end the week 2% to 3% lower than the end of last week. | But it is still on course for the first weekly loss in six, as Russia’s reluctance to cut production fuels concerns of oversupply. Prices are expected to end the week 2% to 3% lower than the end of last week. |
| Tamas Varga, analyst at PVM Oil Associates, said the rise today shouldn’t be overplayed. | Tamas Varga, analyst at PVM Oil Associates, said the rise today shouldn’t be overplayed. |
| After five days of continuous losses, an upside correction is always on the cards. Such a jump, however, will not mean a change of heart. | After five days of continuous losses, an upside correction is always on the cards. Such a jump, however, will not mean a change of heart. |
| Over in Greece, EU auditors have given a mixed verdict on the handling of the country’s three bailouts. Helena Smith reports from Athens: | Over in Greece, EU auditors have given a mixed verdict on the handling of the country’s three bailouts. Helena Smith reports from Athens: |
| The three financial lifelines thrown Greece in 2010, 2012 and 2015 achieved their overarching goal of averting default but were far from successful in other respects, EU auditors have concluded. | The three financial lifelines thrown Greece in 2010, 2012 and 2015 achieved their overarching goal of averting default but were far from successful in other respects, EU auditors have concluded. |
| Issuing their first in-depth look into the cash- for-reform programmes, the independent Luxembourg-based court of auditors said Greece’s continued inability to finance itself on international markets “remains a challenge.” | Issuing their first in-depth look into the cash- for-reform programmes, the independent Luxembourg-based court of auditors said Greece’s continued inability to finance itself on international markets “remains a challenge.” |
| Design and implementation of economic policies was poorly judged, the watchdog claimed, with Greece’s economic depression being much deeper than ever envisaged as a result of tough fiscal measures. | Design and implementation of economic policies was poorly judged, the watchdog claimed, with Greece’s economic depression being much deeper than ever envisaged as a result of tough fiscal measures. |
| It added: | It added: |
| The [EU] commission did not comprehensively consider Greece’s implementation capacity in the design process and thus did not adapt the scope and timing accordingly. | The [EU] commission did not comprehensively consider Greece’s implementation capacity in the design process and thus did not adapt the scope and timing accordingly. |
| More than €350bn has been poured into Greece by the EU and IMF to keep the country afloat. | More than €350bn has been poured into Greece by the EU and IMF to keep the country afloat. |
| The Greek government, which is preparing to exit the country’s third €86bn rescue programme in August 2018 – and is desperately trying to rally spirits ahead of that – did not comment on the report. It is far from sure if Greece will require further aid when its current programme officially expires. | The Greek government, which is preparing to exit the country’s third €86bn rescue programme in August 2018 – and is desperately trying to rally spirits ahead of that – did not comment on the report. It is far from sure if Greece will require further aid when its current programme officially expires. |
| The FTSE 100 has reversed its earlier losses and is now up 15 points, partly because the pound’s earlier gains have largely been erased. | The FTSE 100 has reversed its earlier losses and is now up 15 points, partly because the pound’s earlier gains have largely been erased. |
| The FTSE tends to do better when the pound is weaker, because so many of the companies listed have significant overseas earnings. | The FTSE tends to do better when the pound is weaker, because so many of the companies listed have significant overseas earnings. |
| Here are the current scores across Europe: | Here are the current scores across Europe: |
| FTSE 100: +0.2% at 7,402 | FTSE 100: +0.2% at 7,402 |
| Germany’s DAX: +0.1% at 13,065 | Germany’s DAX: +0.1% at 13,065 |
| France’s CAC: +0.2% at 5,345 | France’s CAC: +0.2% at 5,345 |
| Italy’s FTSE MIB: -0.2% at 22,158 | Italy’s FTSE MIB: -0.2% at 22,158 |
| Spain’s IBEX: -0.3% at 10,058 | Spain’s IBEX: -0.3% at 10,058 |
| Europe’s STOXX 600: -0.1% at 384 | Europe’s STOXX 600: -0.1% at 384 |
| The pound has lost some of its earlier sparkle and is now trading roughly flat against the dollar at $1.3197. | The pound has lost some of its earlier sparkle and is now trading roughly flat against the dollar at $1.3197. |
| It has also slipped agains the euro, down 0.2% at €1.1186. | It has also slipped agains the euro, down 0.2% at €1.1186. |
| David Madden, market analyst at CMC Markets, explains the gravity of the situation facing Carillion and its shareholders: | David Madden, market analyst at CMC Markets, explains the gravity of the situation facing Carillion and its shareholders: |
| Shares in Carillion have collapsed yet again as the troubled construction company stated it will breach its banking covenants. The company also lowered its profit outlook again and stated that their asset sale programme isn’t going as fast as they had hoped. | Shares in Carillion have collapsed yet again as the troubled construction company stated it will breach its banking covenants. The company also lowered its profit outlook again and stated that their asset sale programme isn’t going as fast as they had hoped. |
| Things have gone from bad to worse at Carillion, and the business is in dire need to cash to keep the lights on. Even though the business has plenty of work in the pipeline, it must scramble for cash in order to keep its head above water. | Things have gone from bad to worse at Carillion, and the business is in dire need to cash to keep the lights on. Even though the business has plenty of work in the pipeline, it must scramble for cash in order to keep its head above water. |
| The UK government is one of Carillion’s biggest clients and is monitoring the firm’s troubles. | The UK government is one of Carillion’s biggest clients and is monitoring the firm’s troubles. |
| Reuters quotes a spokeswoman at the Cabinet Office: | Reuters quotes a spokeswoman at the Cabinet Office: |
| The company has kept us informed of the steps it is taking to restructure the business. | The company has kept us informed of the steps it is taking to restructure the business. |
| We remain supportive of their ongoing discussions with their stakeholders and await future updates on their progress | We remain supportive of their ongoing discussions with their stakeholders and await future updates on their progress |
| “Carillion horror show continues”, is how Nicholas Hyett, equity analyst at Hargreaves Lansdown, describes the latest developments at the construction firm. | “Carillion horror show continues”, is how Nicholas Hyett, equity analyst at Hargreaves Lansdown, describes the latest developments at the construction firm. |
| He adds: | He adds: |
| Some sort of recapitalisation was inevitable, but a possible debt for equity swap, with debt even higher than the group had anticipated, is probably as bad as anyone would have guessed. | Some sort of recapitalisation was inevitable, but a possible debt for equity swap, with debt even higher than the group had anticipated, is probably as bad as anyone would have guessed. |
| The group has made some progress on asset sales, and it sounds like some cost savings are being made. It’s not what the group expected though, and it’s clearly not enough. It’s also probably irrelevant given the state of the balance sheet, with net debt already many multiples of the group’s market capitalisation. | The group has made some progress on asset sales, and it sounds like some cost savings are being made. It’s not what the group expected though, and it’s clearly not enough. It’s also probably irrelevant given the state of the balance sheet, with net debt already many multiples of the group’s market capitalisation. |
| Carillion shares plunged as much as 60% in early trading after the construction group involved in HS2 and Battersea Power Station issued its third profit warning of the year: | Carillion shares plunged as much as 60% in early trading after the construction group involved in HS2 and Battersea Power Station issued its third profit warning of the year: |
| The group now expects that a combination of delays to certain PPP disposals, a slippage in the commencement date of a significant project in the Middle East and lower than expected margin improvements across a small number of UK Support Services contracts, partially offset by cost savings initiatives realised in the fourth quarter, will lead to profits for the year to 31 December 2017 being materially lower than current market expectations. | The group now expects that a combination of delays to certain PPP disposals, a slippage in the commencement date of a significant project in the Middle East and lower than expected margin improvements across a small number of UK Support Services contracts, partially offset by cost savings initiatives realised in the fourth quarter, will lead to profits for the year to 31 December 2017 being materially lower than current market expectations. |
| Shares are now down 37% at 26p. | Shares are now down 37% at 26p. |
| The company, which is struggling to cope with a large debt pile and badly-performing contracts, said the board expects a covenant breach at the end of December and will need to implement a recapitalisation plan. | The company, which is struggling to cope with a large debt pile and badly-performing contracts, said the board expects a covenant breach at the end of December and will need to implement a recapitalisation plan. |
| Keith Cochrane, interim chief executive, said: | Keith Cochrane, interim chief executive, said: |
| Whilst we continue to target cash collections, reduce costs, execute disposals and focus on delivering for our customers, it is clear that significant challenges remain and more needs to be done to reduce net debt and rebuild the balance sheet. | Whilst we continue to target cash collections, reduce costs, execute disposals and focus on delivering for our customers, it is clear that significant challenges remain and more needs to be done to reduce net debt and rebuild the balance sheet. |
| Constructive dialogue is continuing with our financial stakeholders, and I am grateful for their support. I remain focused on addressing this issue before my successor, Andrew Davies, takes up the role on 2 April 2018. | Constructive dialogue is continuing with our financial stakeholders, and I am grateful for their support. I remain focused on addressing this issue before my successor, Andrew Davies, takes up the role on 2 April 2018. |
| Love it or hate it, Black Friday is almost upon us. | Love it or hate it, Black Friday is almost upon us. |
| In recent years Britain has embraced the American tradition where retailers slash prices the day after Thanksgiving. | In recent years Britain has embraced the American tradition where retailers slash prices the day after Thanksgiving. |
| British shoppers are expected to spend £10.1bn in the week of Black Friday, which falls on 24 November this year. | British shoppers are expected to spend £10.1bn in the week of Black Friday, which falls on 24 November this year. |
| Just in case you’re interested, here is a piece we’ve done on some of the best deals going this year: | Just in case you’re interested, here is a piece we’ve done on some of the best deals going this year: |