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London open: FTSE edges higher ahead of payrolls
London stocks rose in early trade on Friday following a solid session on Wall Street, but gains were muted as investors eyed the release of the all-important non-farm payrolls report.
At 0820 GMT, the FTSE 100 was up 0.2% at 7,460.92.
The payrolls report, unemployment rate and average earnings are all due at 1230 GMT.
CMC Markets analyst Michael Hewson said: “Expectations are for today’s October payrolls to come in at 185k, which has been the estimate of choice over the last three months.
“Most of the new jobs being added have been in services over the last few months and today’s ISM services data could well offer further insights into that after the payroll’s numbers have been released.”
Before that, the S&P Global CIPS UK services PMI for October is scheduled for release at 0930 GMT.
Investors were also mulling industry data showing that retail footfall fell sharply in October as heavy rainfall across the UK kept shoppers at home.
According to the latest BRC-Sensormatic IQ Footfall Monitor, total UK footfall fell 5.7% year-on-year in October, compounding September’s 2.9% decline.
Within that, high street footfall was down 4.6%, while retail parks and shopping centres saw declines of 4.3% and 7.3%, respectively.
Helen Dickinson, chief executive of the British Retail Consortium, said: “Umbrellas were up as heavy rainfall descended across the UK in October, leading many shoppers to stay at home.
“As inflationary pressures on households begin to ease, some people are shopping around slightly less, braving the rain only to make their final purchases.”
However, she added: “While consumer confidence may be higher than 2022, it is still very weak. The economic landscape remains tough, with input prices and cost pressures above normal levels.”
Chinese services figures were also in focus, as the latest Caixin purchasing managers’ index rose to 50.4 in October from 50.2 in September, coming in below consensus expectations for a reading of 51.0.
A reading above 50.0 signals expansion, while a reading below indicates contraction.
An official survey released earlier in the week showed the services PMI fell to 50.1 in October from 50.9 in September.
Duncan Wrigley, chief China+ economist at Pantheon Macroeconomics, said: “China’s services sector recovery is likely to continue to ebb, after a marked reopening rebound this year. People have been more willing to spend on services than goods and are worried about the murky income outlook, amid the subdued labour market.
“China’s consumption-support policies have focused on the supply-side, such as putting on more concerts, car shows and domestic tourism facilities, which probably had more traction during the warm summer months. We see few short-term catalysts for consumption to lead growth, given that policymakers oppose cash handouts to households, which they see as encouraging laziness.”
In equity markets, corporate news was scarce but consumer electronics retailer Currys rallied after agreeing to sell its entire Greek and Cypriot division for €200m (£175m), as it looks to simplify its business model and free up cash.
The company is selling Dixons South East Europe, trading as Kotsovolos, to Public Power Corporation.
DIY and building supplies retailer Wickes gained after saying it remains on track to meet full-year targets despite a slump in sales in the third quarter, as it warned some installation sales would be pushed into next year.
In broker note action, Smith & Nephew jumped to the top of the FTSE 100 after an upgrade to ‘overweight’ at JPMorgan, while Anglo American traded up after an upgrade to ‘outperform’ at Oddo.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | +4.36% | +22.20 | 531.40 |
| 2 |  |
Smith & Nephew Plc | +3.72% | +35.80 | 997.80 |
| 3 |  |
Sainsbury (j) Plc | +3.72% | +10.10 | 281.90 |
| 4 |  |
Tui Ag | +3.61% | +15.60 | 447.20 |
| 5 |  |
Flutter Entertainment Plc | +2.96% | +395.00 | 13,740.00 |
| 6 |  |
Hargreaves Lansdown Plc | +2.28% | +16.60 | 743.60 |
| 7 |  |
Persimmon Plc | +2.19% | +23.50 | 1,095.50 |
| 8 |  |
Prudential Plc | +2.11% | +18.40 | 890.00 |
| 9 |  |
Rentokil Initial Plc | +2.11% | +9.00 | 435.60 |
| 10 |  |
Easyjet Plc | +1.96% | +7.40 | 385.30 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Centrica Plc | -2.92% | -4.60 | 153.00 |
| 2 |  |
Sage Group Plc | -1.53% | -15.20 | 976.20 |
| 3 |  |
Shell Plc | -1.50% | -41.50 | 2,726.50 |
| 4 |  |
Whitbread Plc | -0.82% | -27.00 | 3,285.00 |
| 5 |  |
Rightmove Plc | -0.72% | -3.40 | 469.80 |
| 6 |  |
Bhp Group Limited | -0.71% | -17.00 | 2,392.00 |
| 7 |  |
Intercontinental Hotels Group Plc | -0.65% | -38.00 | 5,832.00 |
| 8 |  |
Relx Plc | -0.59% | -17.00 | 2,872.00 |
| 9 |  |
Mondi Plc | -0.52% | -7.00 | 1,342.00 |
| 10 |  |
Rolls-royce Holdings Plc | -0.49% | -1.10 | 222.50 |
US close: Stocks buoyant as central banks pause rates
Wall Street trading saw a surge in US stock values on Thursday, driven by investor optimism surrounding the Federal Reserve’s monetary policies.
The Dow Jones Industrial Average recorded a notable increase of 1.7%, closing at 33,839.08 points.
Similarly, the S&P 500 index saw a robust gain of 1.89%, reaching 4,317.78 points, while the Nasdaq Composite climbed by 1.78% to settle at 13,294.19 points.
In the foreign exchange market, the dollar was last up 0.06% on sterling, trading at 82p.
It also inched up by 0.04% against the euro to 92.19 euro cents, while it managed a minimal rise of 0.02% against the yen to change hands at JPY 150.48.
“Stock markets have a definite groundhog feel to them today, as once again hopes of a peak in interest rates have seen stocks rally,” said IG chief market analyst Chris Beauchamp earlier.
“This rally comes almost on cue in seasonality terms but is doubtless based on expectations that rates will pause here and, in due course, come down.
“Investors have been disappointed before on this front, however, so they need to resist the temptation to charge back into stocks too quickly.”
US jobless claims rise, BoE Keeps Rates Steady
In economic news, the Labor Department reported an increase in the number of Americans filing for unemployment benefits last week.
Initial jobless claims rose by 5,000 from the previous week’s revised figure, reaching 217,000.
That exceeded analysts’ expectations, who had anticipated a level of 210,000.
Additionally, the four-week moving average, considered a more reliable indicator, climbed to 210,000, up 2,000 from the prior week’s level, which itself was revised up by 500 to 208,000.
Meanwhile, the Bank of England (BoE) announced its decision to maintain interest rates, in line with widely anticipated expectations.
It marked the second consecutive meeting where rates remained unchanged, following 14 consecutive rate hikes starting from December 2021 when rates stood at 0.1%.
The BoE retained its GDP growth projection of 0.5% for the current year but downgraded its outlook for the next year to zero growth from the previously forecasted 0.5%.
It also revised its estimate for consumer price inflation in the fourth quarter, now expecting it to be around 4.6%, down from the earlier projection of 4.9%.
In the eurozone, manufacturing faced another challenging month in October, with the HCOB eurozone manufacturing purchasing managers’ index (PMI) witnessing a notable decline.
The PMI for October registered at 43.1, down from September’s 43.4, marking a three-month low.
Simultaneously, the output index remained unchanged at 43.1.
HCOB reported a significant contraction in new orders during October, one of the most severe on record, contributing to a substantial drop in factory production.
Starbucks and Disney shares in focus
In equity markets, Starbucks saw a remarkable uptick in its stock price today, surging by 9.48%.
That came in response to Starbucks’ quarterly earnings report, which exceeded expectations. The company reported an 8% increase in same-store sales, driven by improvements in average customer order sizes and increased foot traffic.
Elsewhere, Walt Disney Co witnessed a 2.74% increase in its stock price.
The rise was attributed to Disney’s announcement that it would acquire Comcast’s minority stake in the streaming service Hulu for $8.6 billion.
That would grants Disney full control over Hulu.
Friday newspaper round-up: Food retailers, Apple, Microsoft chief
The ride-share companies Uber and Lyft have agreed to a historic settlement totaling $328m after being accused of withholding wages and benefits, such as mandatory paid sick leave, from drivers. – Guardian
Food retailers have recruited an army of celebrities with internet clout for their festive advertising campaigns as they battle for digital influence this Christmas and try to tap into a burgeoning market for partying at home. Marks & Spencer has signed up Ryan Reynolds and Rob McElhenney, the US actors whose purchase of Wrexham AFC and accompanying Disney+ documentary have increased their fame in the UK, for its food Christmas ad. – Guardian
Hybrid Ferraris have outsold purely petrol-powered models for the first time in a boost for the Italian marque as it prepares to launch its first electric vehicle. 51pc of Ferraris sold between July and September were fitted with battery packs, the company said, in a milestone moment for the industry. – Telegraph
Elon Musk is giving Ukraine discounts on a major purchase of Tesla Powerwall batteries designed to protect the country against blackouts. George Dubynskyi, Ukraine’s deputy minister of digital transformation, told The Telegraph that Ukraine was working with international funders to buy the battery systems. – Telegraph
Apple took investors by surprise last night by giving a sales forecast for the holiday quarter that missed Wall Street expectations as the company was hurt by weak demand for iPads and wearables, which sent its shares lower. The warning on sales in the critical period came in a call with analysts shortly after it released its results, which showed quarterly sales and profits that beat expectations, with iPhone sales up 2.8 per cent, helping to offset large drops in Mac and iPad sales. – The Times
The head of Microsoft has praised the UK competition watchdog’s “clarity and decisiveness” in initially blocking his company’s mega-takeover of Activision — in a sharp reversal from his original claim that the veto was “bad for Britain”. Brad Smith, president of the US tech company, said that it should take responsibility for the Competitions and Markets Authority’s original decision, which was overturned last month after six months of negotiation and a restructuring of the $69 billion deal. – The Times
