The global sell-off continued on Tuesday as US government bonds hit a three year high and negative sentiment around President Donald Trump weighed on the market. Surging yields imply a long feared reversal in the stock markets, particularly in the US, as equities become less appealing relative to lower risk government bonds. Banks, miners and housebuilders were among the casualties in the sell-off, dragging the FTSE 1.1% lower to 7,587. The Financial Conduct Authority urged lenders to increase checks on interest-only mortgages due to concerns that people will be unable to pay them back. Brent crude oil declined 1.3% to $68.55 per barrel. Gold was flat at $1,339 per ounce and copper climbed 0.2% to $3.19 per pound. MAJOR SHAKE-UP IN US HEALTHCARE On Wall Street, the S&P 500 suffered a 0.8% drop to 2,831 around 4:45pm UK time, while the Dow Jones fell 1.1% to 26,151. Some of the weakness on Wall Street came after Amazon, Berkshire and JPMorgan announced a major shake-up to the healthcare industry. It will provide healthcare services to US employees at a lower cost, prompting a sell-off in the shares of existing operators. With an upcoming State of the Union address from Trump and the first Federal Reserve meeting of this year looming, there was plenty to hold investors' attention. Overnight, Asia was in a sea of red with Japan's Nikkei 225 down 1.4% at 23,291. Europe was also weaker with the DAX declining 0.8% to 13,211. MID AND LARGE CAP RISERS AND FALLERS Domino's (DOM) said it expects to beat pre-tax profit expectations as more people order in and watch TV. The pizza delivery company said the X Factor final on 2 December was its biggest day for sales in 2017. Investors were relieved that sluggish UK growth could be over as the shares rose 1.6% to 356.2p. Zoopla owner ZPG (ZPG) was comfortable with slowing UK house price growth, leaving its financial year 2017 market expectations unchanged. The stock was stable at 346.4p. Informa (IMF) confirmed the £3.8bn takeover of events specialist UBM (UBM), creating an enlarged business information and events company. Components distributor Diploma (DPLM) appointed Richard Ingram to replace chief executive Bruce Thompson who decided to retire in September. Investors took the news in their stride as the shares nudged 0.2% higher to £11.71. Imperial Leather and Carex owner PZ Cussons (PZC) reported tough trading conditions in Europe and Africa in its six months to 30 November hit adjusted operating profit by 10.3%. Shares in the midcap slid 5.6% to 311.6p. After the markets closed on Monday, Melrose (MRO) said it was 'surprised' that takeover target GKN (GKN) did not reveal the company plans to make a £150m voluntary cash contribution for GKN's pension fund. Both stocks were flat on the latest development. A strong first quarter and US tax reform bode well for UDG Healthcare (UDG) with adjusted earnings per share expected to increase by between 18% and 21% in 2018. The market expected this as the stock retreated 2.2% to 794p. Activist investor Elliot Capital increased its stake in broadcaster Sky (SKY) to 1.29%, but this did not affect the shares. SMALL CAP RISERS AND FALLERS Luxury handbags brand Mulberry (MUL) said it would continue manufacturing in Britain despite higher leather import costs since the Brexit vote. Shares in the company advanced 1% to £10. The government of Gibraltar awarded an advanced works contract to wastewater treatment specialist Modern Water (MWG), which is in a joint venture with NWG Commercial Services. Shares in Modern Water surged 83.6% to 15.8p. Antennas manufacturer Filtronic (FTC) warned its second half performance is anticipated to be similar to its first half trading where operating profit fell from £1.8m to £0.9m. The company said further growth was expected to be delivered in 2019, triggering a 20.5% drop to 9.1p.
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