Major indices on Wall Street have fallen across the board.

The Nasdaq fell by 0.3%, the S&P 500 lost 0.2% and the Dow Jones industrial average fell by 0.2% at the opening bell.

*An earlier post has been updated to include Janus Henderson’s statement. Refresh your browser to see it.

A quick look at futures shortly before the US markets open:

The S&P 500 and the Dow Jones industrial average are expected to fall by 0.25%, while the Nasdaq could fall by about 0.3%.

And a quick chaser from the politics live blog: Boris Johnson’s big policy announcement appears to have been mistakenly revealed too early.

“Some journalists think Boris Johnson may not have been planning to announce a huge proposed Conservative manifesto tax cut in a Q&A with workers at an engineering company in Stockton-on-Tees.”

The Guardian’s deputy political editor on Twitter:

After three years of constant political turmoil, one of the stranger aspects of the general election campaign has been the relative lack of market-moving announcements: even Labour’s pledge to nationalise broadband infrastructure provider Openreach caused barely a flutter on the share price of current owner BT.

However, there are some business and economics stories popping up.

Today Boris Johnson pledged to raise the threshold at which workers pay national insurance on earnings to £12,000 a year, up from £8,632 currently.

The Guardian’s politics live blog has the details – including the Institute for Fiscal Studies’ verdict on the tax cuts (TL;DR: they help low-paid workers, but they are not the most effective way of doing so).

And the Liberal Democrat party has pledged to raise duties on frequent international flyers by £5bn a year. Read more here:

Investment manager Janus Henderson has been fined £1.9m by the City regulator for not telling customers that their money was tracking investment indices, rather than being actively allocated by human managers.

The Financial Conduct Authority said Janus Henderson had failed to treat fairly more than 4,500 retail investors in two of its funds, the Henderson Japan Enhanced Equity Fund and the Henderson North American Enhanced Equity Fund, by reducing the level of active management without telling customers.

Retail customers were charged the same fees, despite the changes to the management.

Major institutional customers, on the other hand, were informed, and Henderson offered to manage the funds for them for free.

Fund managers charge significantly higher fees to actively manage money than those charged to users whose money tracks the performance of stock markets indices. However, more and more investors are using passive indices – as many studies have found that they rival active investment for value for money once fees are taken into account.

Mark Steward, executive director of enforcement and market oversight at the FCA, said:

The FCA requires firms to treat all its customers fairly, not just some customers. In this case, retail investors paid fees for active investment management they did not receive.

For retail clients, the Japan and North American Funds were in effect operating as “closet trackers” as the fees charged to them were inappropriate given the diminished level of active management. The matter is aggravated by the length of time HIFL took to identify the harm being caused to the retail investors and to fix it.

A spokesperson for Janus Henderson said:

The FCA’s notice relates to events in the period 2011 to 2016 prior to the merger between Henderson Global Investors and Janus Capital Group in 2017. Janus Henderson Investors accepts the FCA’s findings and the financial penalty and has co-operated fully throughout the process. Affected clients had already been separately contacted and fully compensated. Since the incident Janus Henderson Group has improved its systems and controls.

More detail on the “female advisory board” that Aston Martin set up in 2015.

“We’re not talking about making cars only for women, but rather to make our cars more practical for women and families, as well as men,” an Aston Martin spokesman said.

In an interview with Yahoo Finance this year, Carlee Hardaker, Aston Martin’s senior manager of global customer and market intelligence, said: “It might be that their husband, boyfriend, or son, comes home and says, ‘I’m going to buy myself a supercar’ or’ ‘I’m going to buy a Ferrari or a Lamborghini.’ And the woman says, ‘No, you’re not, it looks like you’re having a mid-life crisis, but you can have an Aston’.”

You can read the full report here:

German car components maker Continental plans to cut about 5,500 jobs worldwide, in the latest sign of the struggles affecting the global automotive industry as it prepares to transition away from fossil fuels.

The job cuts from 2024 onwards will fall at five plants in Germany, Italy and the USA, with the brunt of the cuts focused on factories producing parts used in petrol and diesel engines.

Electric vehicle sales are expected to grow exponentially in the next decade, amid tighter emissions regulations.

Continental said it planned to discontinue the business in hydraulic components for gasoline and diesel engines completely. In its statement, Continental said:

This is against the backdrop of the automotive industry’s disruptive transition to electric mobility, which has been accelerated by stricter emissions laws, resulting in a drastic decline in demand for hydraulic components.

The union representing Royal Mail workers has appealed against a high court judgment that their ballot in favour of strike action was not invalid.

The Communication Workers Union tweeted that it has lodged its appeal with the high court, sending shares in Royal Mail to their lowest point of the day, down by 2.1%.

Royal Mail successfully argued that the ballot was not carried out in accordance with legal rules as some workers had opened their ballots in sorting offices before they arrived at their home addresses.

Royal Mail is keen to avoid strike action over the Christmas period, when parcel deliveries are commercially crucial. The privatised company also cited concerns over running postal votes during the general election on 12 December.

Today is an important day for Aston Martin, with the launch of its make-or-break DBX, the company’s first sports utility vehicle.

Chief executive Andy Palmer launched the car in Beijing, a clear indication of the company’s priority to sell to wealthy Chinese buyers.

The company is particularly keen to increase its sales to women, diversifying a masculine-dominated image most associated with James Bond. It even hired a “Female Advisory Board” to help with design.

Palmer has staked the future of the business on the SUV bet paying off. Carmakers have responded to surge in demand for the bulkier vehicles – despite the terrible toll for the planet of manufacturing less efficient modes of transport. Growing demand for SUVs was the second largest contributor to the increase in global CO₂ emissions from 2010 to 2018, according to the International Energy Agency.

Aston Martin Lagonda is following the well worn path trodden already by Lamborghini’s Urus and Bentley’s Bentayga, and the car is priced similarly at £158,000, before extras.

Those extras include a bumper protector and in-built hose to prevent dogs marking the car or boot warmers for cold weather. Aston Martin did not give details of how much the extra features will cost.

Just after midday, shares on the FTSE 100 have lost 1.2%.

Kingfisher remains the biggest faller, down 6.4%, while educational materials provider Pearson las lost 3.7% and insurer Aviva has lost 3.6%.

Only four stocks were in positive territory at the time of writing on the blue-chip index. Mid-cap stocks on the FTSE 250 – less exposed to global trade tensions – were down by 0.5%.

Back on the ECB, here’s a bit more detail on those building financial stability risks.

Low interest rates – designed by central bankers to stimulate spending – have had the knock-on effect of making it more difficult for investors to make returns on their money. That has pushed investors outside the heavily regulated banking sector to look for returns, or yield, elsewhere.

The ECB said:

The ongoing search for yield across non-banks may exacerbate the build-up of vulnerabilities, not least by lowering financing costs for riskier borrowers.

If markets do fall significantly investment funds, including hedge funds, could exacerbate any instability if they rush to sell assets that are difficult to sell, the ECB said.

Funds invested in illiquid assets can face severe difficulties in dealing with large-scale outflows. Higher leverage, for example in hedge funds, can add to procyclical investor behaviour and accelerate outflows.

The following chart shows the build-up in riskier bets. In the left-hand chart the two rings represent the credit ratings of companies in 2007 and 2018. The growth in high-yield debt (the yellow portion) is particularly striking; “high yield” is another way of saying riskier, in comparison to debt given safer A or B ratings.

The right-hand side of the chart shows the growth in house prices across the euro area – another tell-tale sign of a growing bubble.

There’s a lot to digest in the European Central Bank’s financial stability review – the first under the leadership of newly appointed president Christine Lagarde.

Some of the headline points from the ECB:

• The financial stability environment remains challenging, with “prominent downside risks to growth”.
• Signs of excessive leverage and risk-taking in some sectors – such as non-bank lenders, debt-burdened companies and property – “require targeted action”.
• Excessive risk and leverage in non-banks amplifies cycles in capital markets and contagion of stress to the wider financial system.
• Consolidation between European banks could help aid financial stability.
  

An interesting story from the Financial Times (£) this morning for watchers of the UK’s most systemically important bank: HSBC is reportedly set to replace its investment banking head.

Interim head Noel Quinn took over in August with a remit to cut thousands of staff, after his predecessor John Flint was ejected after barely 18 months in the job – reportedly for moving too slowly on improving returns. Now the shake-up could extend to the top of the bank.

The FT said that Samir Assaf, head of global banking and markets, is expected to be moved to a non-executive role to allow a successor in who could shrink the unit serving the fundraising needs of large companies, citing people briefed on the matter.

The top riser anywhere on the FTSE 350 is Mitchells and Butlers, the restaurant owners bucking the struggles of many other consumer-facing companies (cf. Kingfisher today).

The owner of brands such as Harvester, Toby Carvery and Nicholson’s pubs reported like-for-like sales growth of 3.5% for the year ending 28 September. It increased adjusted operating profits by £14m, or 4%, and revenues and profits before tax also rose.

It even managed to cut net debt (although it is still 3.6 times earnings before interest, tax, depreciation and amortisation).

Phil Urban, the company’s chief executive, said:

These strong results reflect the work we have done over the last few years, first to build sustained sales growth and then to convert that into profit growth. It has been extremely encouraging to see an improvement in like-for-like sales growth across the portfolio during the year, fuelled by our Ignite programme of work.

This puts us in a stronger position as we move forward into the next financial year, in what we expect to remain challenging market conditions.

An hour into trading, and blue-chip shares in London are down by 0.9%, accelerating losses from initial exchanges.

The mid-cap FTSE 250 has lost 0.6%.

Kingfisher is the biggest faller, down by 6.9%, while accounting tech company Sage Group and insurer Aviva have lost 3.6% and 3.3% respectively.

On the latter two, from Reuters:

• Sage reported a 13% drop in full-year organic operating profit to £432m on Wednesday as its margin was squeezed by increased investment in its cloud and subscription products.
  
• Shares in Aviva slid on Wednesday after the British insurer announced it would reorganise into five divisions and sell its stake in its Hong Kong business, falling short of investor expectations for a broader change in strategy.

But in a show of support for the beleaguered American manufacturer, Emirates revealed an $8.8bn (£6.8bn) order for 30 of Boeing’s 787-9 Dreamliners.

However, Reuters reported the deal could allow Emirates – negotiating on its home turf in the Dubai air show – to reduce orders for Boeing’s other twin-aisle jet, the 777X, which has been delayed after engine issues.

Air shows in recent months have been dominated by one thing: the crisis at Boeing over the grounding of the 737 Max. At the Dubai air show the top US regulator has indicated that it will have knock-on effects on the rest of Boeing’s business.

The head of the US Federal Aviation Administration (FAA) said the regulator will be tougher on the certification of the Boeing 777x, its twin-aisle jet.

FAA administrator Steve Dickson also repeated the message that the FAA was not following any timeline for the return to service of the grounded 737 MAX model, its lead single-aisle offering, and said time pressure cannot influence the FAA’s regulatory process.

Here’s the full story on Twitter’s rebuke of the Conservative party over its misleading “factcheckUK” account.

While Twitter has come out strongly against the tactic of renaming the account, the matter could reignite concerns over political misinformation on its platform.

Speaking on BBC Radio 4’s Today programme, Will Moy, the chief executive of indepedent checkers Full Fact, said Twitter should have acted sooner and could have forcibly renamed the account.

Read more here:

B&Q owner Kingfisher is the biggest faller on the FTSE 100 this morning – with shares off by 7%.

A quick glance at Kingfisher’s statement will give some clues why: there is a palpable sense of a new boss clearing the decks.

The first five words of Thierry Garnier’s statement to the stock market might – to an uncharitable reader – be seen as diverting the blame for the DIY retailer’s problems towards former management: “In my first eight weeks” ...

A 3.7% like-for-like sales fall in its third quarter and talk of too much complexity signal that there could be some more tough times ahead.

Garnier said:

As a team, our priority is to fix our operational issues – particularly in IT and supply chain in France – and refocus our efforts. This includes stopping or pausing a number of initiatives to concentrate on stabilising performance and trading. The effect of these changes will not be immediate.

Analysts at MUFG Bank note that the response to the Hong Kong protests is a key diplomatic factor that could be affecting the trade talks.

Lee Hardman and Fritz Louw, currency analysts at MUFG, highlighted a US Senate bill yesterday aimed at supportingprotesters in Hong Kong that warned China against a violent suppression of the demonstrators. China responded with a threat to retaliate if it becomes law. They wrote:

The developments have put at least a temporary dampeneron building optimism over a US-China trade deal including the possibility of larger roll back of tariff hikes.

Bloomberg reported yesterday that the two sides are locked in tough negotiations on a phase-one pact linking the size of tariff roll backs to the preliminary terms set in the failed deal from May. The White House is still reportedly debating the precise percentage of tariffs to roll back in response to China’s demand to remove all tariffs imposed after May immediately and then tariffs imposed before that to be lifted gradually. [...]

A larger tariff roll back would be an encouraging development for financial markets and help further ease downside risks for the global growth outlook.

Let’s have some more reaction to the big story driving markets around the world in the early morning (as so often in the last two years): the trade rhetoric rollercoaster.

The back and forth can be contradictory and confusing but overall the US and China are making progress towards an interim deal, bets Mark Haefele, chief investment officer at UBS Global Wealth Management. He said:

In our base case we now see the US and China agreeing a Phase 1 deal that, at a minimum, averts additional tariffs. The initial agreement would likely include a resolution of less critical issues such as China’s purchases of US agricultural products and opening up of its financial services sector, as well as improving the transparency of its currency regime.

We expect the more difficult structural issues, such as cybertheft and industrial subsidies, to be left for later phases. Our expected range for global equities in this scenario is for 0–5% upside from current levels.

Just Eat has published the offer documents from Takeaway.com, meaning that the British tech firm will be acquired by the Dutch firm by 31 January if 75% of shareholders back the bid.

The Takeaway.com offer, worth £4.7bn, is up against an unsolicited bid by Prosus, an arm of South African firm Naspers.

Jitse Groen, chief executive of Takeaway.com, said:

Today we are taking an important step towards the creation of what we believe will be the world’s leading online food delivery company.

However, Just Eat’s shares are trading at a premium to the offer, indicating that investors are hoping for a better bid.

European stock markets have caught a cold from Asia: the FTSE 100 is down by 0.5% at the opening bell.

France’s Cac 40 has lost 0.5% and Spain’s Ibex is down 0.4%.

Europe’s Stoxx 600 (which includes many of the above stocks) fell by 0.4%.