Brexit shenanigans were due to be at the front of the market's mind on Tuesday ahead of a vote in Parliament on the deal cooked up by Prime Minister Theresa May, however on Monday afternoon the vote was delayed until further notice, most likely in the new year.
However, while the market is open there will be something to keep traders occupied, most notably the latest UK employment data and a smattering of company results and announcements including from blue chips WPP group PLC (LON:WPP) and Ashtead PLC (LON:AHT).
Brexit circus final act delayed
After 4 days of fierce debate, the parliamentary maths appeared to have gotten to May, as on Monday afternoon the ‘meaningful vote’ on her Brexit deal was delayed, most likely until January.
The deal was not expected to pass due to criticism from both sides of the Brexit divide, with the government facing down not just opposition parties but also dozens of disaffected Tory MPs and the DUP, whose votes are critical to keeping her minority government afloat in the Commons.
UK PM says there is "widespread and deep concern" over Irish border backstop and confirms delay to key Brexit vote https://t.co/KQktdn8XVa— BBC Breaking News (@BBCBreaking) December 10, 2018
The delay seems a transparent attempt for May to either wrest more concessions from the EU or at the very least give whips time to cajole enough MPs to vote for it.
If the deal fails, it will throw the Brexit process into new uncertainty, with the outcome seemingly impossible to call. The Labour party are likely to try and force a general election through a vote of no confidence in the government, provided a Tory leadership challenge does not oust May from her position first.
There is also increasing support for a second referendum (or ‘people’s vote’) on Brexit, which when coupled with a decision from the European Court of Justice on Monday which is likely to confirm the opinion that the UK can cancel the process unilaterally would lend extra credence to a second public vote on the issue, although this itself has mixed support across the political spectrum.
The absolute deadline for a vote is January 21, so it is almost certain to be held before then.
Wage growth key
In the absence of a Brexit vote, the latest UK labour market statistics will provide the macro attention, with the unemployment rate likely to remain close to recent lows of around 4.1%, so the rate of wage growth will be key.
Graham Spooner, investment research analyst at The Share Centre said: “For October it was encouraging to see wages breach the 3% level as a sign of the health of the UK jobs market, but this will undoubtedly fuel interest rate expectations, but policy makers have got other things to worry about at the moment.”
Strategy update crucial for WPP
On the corporate front, Mark Read, WPP's new group CEO will host the advertising giant’s much-anticipated strategy update for investors and analysts at 12.30pm.
According to analysts at Shore Capital, the event will provide an opportunity for Read and his team to provide “greater granularity on the practical and financial implications of its post-Sorrell era strategy.”
The ShoreCap analysts expect the FTSE 100-listed firm to highlight a heightened focus on direct collaboration between group companies, a drive on cost savings and efficiency, and; a disciplined approach to capital allocation, including further asset disposals.
In its third-quarter trading update at the end of October, WPP revealed that 16 non-core disposals had already been achieved in the year-to-date, raising £704mln.
It also flagged up that it is investigating selling off a stake in data insight and consulting firm Kantar following unsolicited expressions of interest and investors will definitely be looking out for news on this possibility, the analysts added.
Reassurance needed from Ashtead
Elsewhere, equipment hire blue chip Ashtead saw its shares hit by the market sell-off in October despite the fact that September’s first quarter figures beat expectations.
The group will provide a second-quarter update on Tuesday which will give another chance for the firm to provide some reassurance.
Given that revenues from the US account for 87% of Ashtead’s total, investors will be focusing particularly on the performance there and any comments on future prospects.
Ashtead’s shares did get a boost earlier this month from news that its chief executive Geoff Drabble has decided to step down from his role at the end of the current financial year, to be replaced by Brendan Horgan, currently chief executive of the group's North American business, reflecting that US bias.
Significant announcements expected on Tuesday:
Strategy update: WPP PLC (LON:WPP)
Economic data: UK unemployment; UK average earnings; German ZEW economic sentiment survey; US PPI