Morning Note: Market news and an update from distributor Bunzl.

Market News

The dollar edged up and Treasuries trimmed recent gains after underwhelming US jobs data did little to strengthen the case for further Federal Reserve interest-rate cuts.

Silver climbed above $66 per ounce, reaching new all-time highs, and is currently up nearly 130% year-to-date. The rally has been supported by tightening inventories and robust retail and industrial demand, particularly from the expanding solar, electric vehicle, and data centre sectors. Gold was also firm and currently trades at $4,320 an ounce. Brent Crude rose to $59.50 a barrel, recovering slightly from near a five-year low after President Donald Trump ordered a “total and complete” blockade of sanctioned oil tankers linked to Venezuela.

US equities were little changed last night: S&P 500 (-0.2%); Nasdaq (+0.2%). OpenAI is in talks to raise at least $10bn from Amazon and use its chips, a person familiar said, while Alphabet’s Waymo is said to be in talks to raise more than $15bn at a valuation near $100bn. In Asia this morning, markets moved higher: Nikkei 225 (+0.3%); Hang Seng (+0.9%); Shanghai Composite (+1.2%). The FTSE 100 is currently 1.2% higher at 9,792.

UK inflation slowed to 3.2% in November from a year earlier, a bigger-than-expected drop (3.4% forecast) that clears the path for a Bank of England rate cut tomorrow. The pound fell ($1.3315 and €1.1370) and the 10-year gilt yields 4.52%.

The US threatened to retaliate against EU companies, including Accenture, Siemens and Spotify in response to the bloc’s digital tax efforts.

Source: Bloomberg

Company News

Bunzl has this morning updated the market prior to entering its closed period for the year ending 31 December 2025. Despite the ongoing macro-economic challenges, the company is trading in line with expectations. The company set out guidance for 2026, including a slight decline in its operating margin. In response the shares have been marked down 4% in early trading.

Bunzl is a specialist international distribution and services group. The company provides an efficient and cost effective one-stop-shop solution to enable its customers to reduce or eliminate the ‘hidden’ costs of sourcing and distributing a broad range of goods that are essential to the successful operation of their businesses but which they do not themselves resell – think disposable tableware, rubber gloves, and plastic trays. The strategy is to expand the business through organic growth, consolidating markets through focused acquisitions, and continuously improving operating efficiency. The group is also supporting customers looking to transition towards packaging better suited to the circular economy, with around half of Bunzl’s packaging sales made from alternative materials. The group now processes around three quarters of orders digitally, supporting customer retention and enhancing operational efficiency.

Back in April, the group warned of a more challenging economic backdrop. In response, the company lowered its full-year guidance and reduced its borrowing target At the time, the shares were marked down by 25%.

Today’s statement highlights that despite the ongoing macro-economic challenges in its key end markets, the company reiterates the 2025 guidance.

Group revenue is expected to grow between 2% and 3%, at constant exchange rates, and to be broadly flat at actual exchange rates. Growth is expected to be driven by acquisitions, with broadly flat underlying revenue over the year. Despite the tougher comparatives, the company expects to see good momentum over the final quarter, supported by the benefits of actions taken to improve performance, including new business wins in North America.

Group adjusted operating profit is expected to be in-line with expectations, with operating margin around 7.6%. The company expects to see a moderation of its year-on-year operating margin decline in the second half compared to the first half of the year, driven by: the benefit of actions taken in North America and Continental Europe to improve performance; easier comparatives in Continental Europe; and synergy benefits from the Nisbets acquisition.

In August 2024, Bunzl made a commitment to allocate c.£700m p.a. primarily to be invested in value-accretive acquisitions to supplement growth. Most recently, the group completed the acquisition of Damito, a distributor of cleaning & hygiene, personal protective equipment and packaging in Slovakia. Although the pace of spending slowed in 2025, the company’s pipeline remains active.

As expected, the company has completed its £200m share buyback programme and continues to expect its balance sheet leverage to be just over 2.0x adjusted net debt to EBITDA at the end of the year.

Looking ahead to 2026, uncertainties relating to the wider economic and geopolitical landscape are expected to continue. The group expects to generate moderate revenue growth, at constant exchange rates, driven by some underlying revenue growth and a small benefit from announced acquisitions. However, the operating margin is expected to be slightly down year-on-year.

Source: Bloomberg