London pre-open: FTSE set to track US stocks lower

14th Nov 2012 07:25

City sources predict the FTSE 100 will open down 26 points from yesterday's close of 5,786, tracking losses seen in the US overnight. After a strong start on the back of strong earnings from Home Depot, US stock markets yesterday sunk into the red by the close as concerns about the dreaded 'fiscal cliff' dampened the mood.The 'cliff' refers to a number of laws that, if unchanged, would result in over $600bn of automatic tax increases and spending cuts starting in January. President Barack Obama is set to meet with Congressional leaders this week to discuss plans to avert the automatic change in laws. It's a busy day today, announcement wise, with the UK Balance of Trade, BoE Inflation Report, Claimant Count Rate, and the Unemployment Rate all due out at 09:30.As regards the Inflation report, economists at Unicredit believe that: "While the Inflation Report will likely show an upward revision to the near-term path for inflation, we expect the report to leave the door open for more stimulus, should the growth outlook deteriorate."Barclays Research is of a similar vein, arguing that: "We expect the report to project inflation to be more persistently above target in the near term than in the August report (...) However, the MPC is likely to indicate that QE could be restarted should the predicted recovery fail to take hold." Looking abroad, on the agenda are: US Business Inventories, FOMC Interest Rate Minutes, US Manufacturing Inventories, US Retail Sales, and EU Industrial Production. In company news, underlying half-year profit before tax was ahead of expectations at Sainsbury as it continued to outperform in a challenging market. Underlying profit before tax in the 28 weeks to September 29th was up 5.4% to £373m from £354m the year before. Seymour Pierce had gone for £370m while Charles Stanley had plumped for £363m. Total sales, including valued added tax (VAT) and fuel, were up 4.0% to £13,365m from £12,848m the year before, while excluding fuel they were 4.1% year-on-year. Like-for-like sales growth in the reporting period, including VAT and excluding fuel, were up 1.7%.All of the financials are in line with expectations this year at Tullow, while the oil group remains on target to deliver average net production of 80,000 to 84,000 barrels of oil equivalent per day (boepd) for the full year. The group's interim management statement covering the second half of the year said operational and financial performance has remained strong.Engineering consultancy AMEC said it was trading in line with expectations despite ongoing economic uncertainty. The firm said mining activity was slowing, but conventional oil and gas activity remained strong, particularly in the North Sea and Gulf of Mexico. Its order book was £3.6bn at the end of October, compared to £3.3bn the previous year, and down slightly from £3.7bn in June. "We are on track to deliver double-digit underlying revenue growth for the full year and we expect to deliver good growth in 2013," said Chief Executive Samir Brikho.