Steady drift downward in early trading

Equities have stumbled in early trading, with the FTSE 100 down 40 points and European markets pushing lower as well.

Faced with a dearth of news, equities have drifted lower this morning, with losses on the FTSE 100 coming off the back of the steady move higher over the past week. What is really needed to drive this market higher is a good trade talk headline, and for the moment is does look like things are moving in the direction of a deal. That is more than can be said for Brexit, which remains mired in debate. The EU had always proclaimed that it was negotiating with the PM, but now it has the entirety of Parliament to deal with as well, and division prevails here. The House of Commons might have declared its intention to avoid a no-deal Brexit, but in the absence of something else one seems inevitable. UK bank stocks are mixed as investors keep a nervous eye on the situation in Germany, where Unicredit has declared itself as a suitor for Commerzbank, but how the German government will allow a foreign takeover of its second-largest bank remains to be seen, especially if that takeover is followed by heavy cost-cutting and job losses.

Saga’s high dividend yield heading into this morning’s results should have been taken as a warning that a cut to the payout was a possibility, and it has come to pass. The pre-tax loss is also bad news, but with trading already looking tough the dividend was perhaps the last attraction the shares had left. Now that has also been sullied, and even the travel business is expected to see tougher times ahead.

Ahead of the open, we expect the Dow to start at 26,197, down 21 points on Wednesday’s close.