US interest rates in focus on Wednesday, while UK election campaigning comes to a close

On the corporate front, half-year results from transport operator Stagecach will be the main focus

Federal Reserve

Wednesday is likely to be dominated by the latest Federal Reserve monetary policy decision, with Fed boss Jerome Powell expected to keep US interest rates on hold this time out when the outcome is announced after the London close. 

The Fed boss’s less dovish language recently has made it fairly clear that the central bank will stay “on hold” as regards interest rates for a while following a series of cuts this year - which had been the first for over ten years.

The final FOMC meeting of the year “should come and go with little fanfare”, according to economists at RBC Capital Markets.

“With financial conditions in ‘easy’ terrain and largely unchanged since the October meeting and a phase one trade deal still seemingly on the table, the Fed is unlikely to make any substantive changes to the forward-looking language in the statement,” they said in a preview of the Fed meeting.

Political issues to the fore for Stagecoach

Otherwise, the final day of campaigning before the UK general election on Thursday should pass without too much fuss, with little to excite on the corporate front, although public transport operator Stagecoach Group PLC (LON:SGC) will try to calm pre-election nerves with its half-year results.

The operator of Megabus Stagecoach is facing looming political risks no matter who steps into Number 10 as of 13 December.

City broker Liberum Capital recently downgraded its rating for Stagecoach to ‘hold’ from ‘buy’ in a note assessing the political issues.

"A Labour-led government would be significantly more interventionist. noting Labour’s policies pointed to “extensive intervention in bus services”, its analysts said.

If Jeremy Corbyn's party wins, local authorities will be given the power to regulate bus services and create council-owned bus companies, allowing them to bring down the cost of tickets. Also, in areas where bus services are brought into public control, Labour has pledged to make bus travel free for under-25s

However, they added: "Even a Conservative government would seem intent on supporting more widespread moves towards bus re-regulation," in contrast to the current ‘free market’ system for buses.

Leaving aside the political uncertainty, The FTSE 250-listed transport firm has not had an enjoyable 2019, after losing its East Midlands rail franchise after 12 years and being barred by the Department for Transport from bidding for the East Midlands, South Eastern and West Coast lines over its failure to comply with new pension requirements.

Stagecoach, which has appealed the ban, said in an October trading statement that the court hearing is due in early 2020, so investors will have to hold their horses on this one.

At this stage it seems the buses division is all that is left the group, and although October's update showed a strong performance in the London bus division that came alongside lower growth than expected at its regional operations.

Significant announcements expected on Wednesday:

Interims: Stagecoach Group PLC (LON:SGC); Kromek Group PLC (LON:KMK), DWF Group PLC (LON:DWF)

Finals: Autins Group PLC (LON:AUTG)

AGMsFalcon Oil & Gas Ltd (LON:FOG), Minds + Machines Group Ltd (LON:MMX)

Economic data:Federal Reserve interest rate decision, US CPI inflation

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