There are only 65 shopping days to Christmas. That is, for most people, if you include Sundays, which have become shopping days over recent years. Some individuals would insist that this figure means 64 days before one need go shopping, but I am trying not to include myself in this category.

It cannot have escaped the attention that many stores seem to have suddenly shipped in wrapping paper, tinsel and other assorted Christmas tat in readiness for the regular annual buying binge. Each year, the promotions and subsequent sales seem to last longer than the previous, but it obviously works, as sales increase year on year.

One such store hoping for a golden goose in trading over Christmas is supermarket group William Morrison. For many years, this was the growth stock in the sector, offering a below-average dividend in exchange for rapid acceleration in the number of stores. The growth was, of course, massively expanded earlier this year with the acquisition of its ailing rival, Safeway. Since then, things have not gone entirely smoothly. In July, Morrisons warned that, against a tough industry backdrop, with integration a hard task, its full-year numbers would be significantly below expectations. Has the bad news been discounted? Half-year numbers on Thursday will show whether the lost credibility can be regained.

Spirits are raised over Christmas, and one such company hoping it will be is Diageo, the combined force of Grand Metropolitan and Guinness. The firm's best-known brands are Smirnoff, Johnny Walker and Baileys, in addition to its famous black stout. Diageo is fighting a battle to maintain growth in its vodka business as trends turn away from vodka-based alcopops. The group recently sold down its investments in the US and is in a position to reduce debts and continue an aggressive buy-back programme. Supporters will hope for good news in tomorrow's update.

The froth of a near ten per cent rise in the FTSE 100 since the mid-August low has been blown off as many take the chance to bank some profits. The benchmark pushed above 4,700 for the first time in more than two years in the first week of October. The market is now looking for direction. Many fund managers foresee a rosy picture for equities, with some predicting a further 15 per cent from current levels. It is difficult to see where a stimulus will come from, apart from results coming in above consensus.

Attention now shifts to Wall Street and the third-quarter reporting season. Thirty-nine of the S&P 500 reported a fortnight ago and 37 last week. Positive surprises outnumbered the negative, importantly including IT giant Intel. Over a third of the remaining companies report this week. If the news remains positive, Wall Street could help the UK and Eurozone keep up momentum.

With inflation in the UK at very low levels, it is no longer a foregone conclusion that a further interest rate rise will be made in November. Increase projections have been withdrawn in many quarters, leaving a backdrop for equities to keep pace with Christmas spending.

* For investment advice contact Anthony Platts on 01642 608855.

Published: 20/19/2004