Morning Note: Market news and an update from Colgate-Palmolive.

Market News

Global equities have kicked off the week on a positive note as easing US-China trade tensions boost optimism. In Asia, the Nikkei 225 was closed, while the Hang Seng (+1.0%) and Shanghai Composite (+0.6%) rose. The S&P futures market is currently predicting a 0.3% rise at the open this afternoon. The FTSE 100 is currently little changed at 9,717.

The US shutdown became painfully real for tens of millions of Americans as it reached the 1-month mark, disrupting food aid, cutting childcare support, and driving up health insurance premiums.

The dollar remain firm and gold moved back above $4,000 an ounce. Brent Crude rose to $65 a barrel after OPEC+ announced plans to pause output increases. Aluminium hit a 3-year high.

The latest Nationwide House Price Index shows annual growth increased from 2.2% in September to 2.4% last month. Monthly growth slowed from 0.5% to 0.3%, leaving average prices at £272,226. Sterling trades at $1.3130 and €1.1390. UK bond investors including Aberdeen, Fidelity, and JPMorgan AM are betting on more gains after gilts had their best month in almost two years. The 10-year gilt currently yields 4.40%.

This week is another busy one for corporate earnings with reports from BP, Marriot, Vonovia, Cameco, Diageo, National Grid, Smith & Nephew, and AstraZeneca.

Source: Bloomberg

Company News

On Friday lunchtime, Colgate-Palmolive released Q3 results which were a touch above market expectations. However, the company cut its full-year sales forecast, in a sign that rising economic uncertainty is reducing consumer spending on higher-priced items, even in essential categories such as oral and personal care. In response the shares were little changed during Friday’s trading session.

Colgate is a globally diversified consumer products company, which generates around $20bn of sales from a focused portfolio of strong brands including Colgate, Palmolive, Sanex, Ajax, and Hills Pet Nutrition. Most notable is Colgate’s leadership of the global toothpaste market (41.2%) and in manual toothbrushes (32.4%). The company generates c. 80% of its sales from outside the US, with emerging markets accounting for half of its sales, leaving the group well placed to benefit from a growing middle class. A strong mix of home-grown products and a culture of innovation contributes to a return on capital meaningfully higher than the peer group. The group’s long-term target is to deliver organic sales growth of 3% to 5%, although in recent years this has been exceeded.

During the three months to 30 September 2025, reported worldwide net sales increased by 2.0% to $5.13bn, in line with the market forecast. Excluding the impact of currency and M&A, organic growth was 0.4%. The group pushed up pricing by 2.3% to counter the impact of tariffs but this has had an impact on volume which fell by 1.9%. The group experienced slowing category growth in many markets and the negative impact from lower private label pet sales as the group exited a non-strategic business.

The Oral Care, Personal Care, and Home Care businesses are grouped together and split by geography.

-          North America (19% of annual sales) organic fell by 0.5%.

-          Latin America (23% of sales), rose by 1.7%.

-          Europe (16% of sales) was up 1.2%.

-          Asia Pacific (14% of sales) fell 1.0%.

-          Africa/Eurasia (6% of sales), rose 6.2%.

-          Hill’s Pet Nutrition (22% of sales), which is treated as a separate global division, generated growth of 1.3%.

The gross margin was down 190 basis points to 59.4% due in part to the impact of raw materials, primarily fats and oils. The group ramped up its advertising spending to 13% of net sales. The underlying operating margin fell by 60 basis points to 20.6%. The company continues to expect an impact of about $75m from tariff-related costs. On a ‘Base Business’ basis, EPS was flat at 91c, slightly above the market forecast of 89c.

Free cash flow has fallen by 4% in the year to date and net debt rose by $0.3bn in the quarter to $6.9bn. $2.1m was returned to shareholders through share repurchases and dividends.

The group reduced its sales full-year guidance – it now expects organic sales growth of 1%-2%, versus the low end of 2%-4% previously. The company now expects gross profit margin to be roughly in line with year-to-date gross profit margin of 60.1% versus roughly flat previously. EPS is expected in the low single-digits.

Source: Bloomberg