ADVFN Morning London Market Report: Tuesday 16 November 2021

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London open: Stocks flat as investors mull jobs data


London stocks were flat in early trade on Tuesday as investors digested the latest UK jobs data.

At 0845 GMT, the FTSE 100 was steady at 7,351.27.

Data out earlier from the Office for National Statistics showed the unemployment rate fell again in September, while the number of workers on payrolls rose despite the end of the furlough scheme, reinforcing expectations of a rate hike by the Bank of England.

The number of workers on payrolls rose 0.6%, or by 160,000 between September and October to 29.3m.

Sam Beckett, ONS head of economic statistics, said: “It might take a few months to see the full impact of furlough coming to an end, as people who lost their jobs at the end of September could still be receiving redundancy pay.

“However, October’s early estimate shows the number of people on the payroll rose strongly on the month and stands well above its pre-pandemic level.”

Meanwhile, the unemployment rate fell to 4.3% in the three months to September from 4.5% in August, coming in slightly below consensus expectations of 4.4%.

In equity marketsVodafone was the standout gainer on the FTSE 100 as it lifted earnings and cash-flow guidance after reporting a rise in first-half adjusted core profits.

Intermediate Capital advanced after well-received first-half results, while drinks group Diageo ticked higher after raising its medium-term sales growth guidance, driven by market share across its operating regions.

Restaurant Group surged to the top of the FTSE 250 as it upped its full-year earnings expectations following like-for-like sales outperformance versus the market across its Wagamama, pubs and leisure businesses.

Homeserve traded up as it lifted its dividend and posted a jump in interim profit and revenue thanks to a strong performance in North America and Continental Europe and from its Home Experts business.

On the downside, Premier Foods slumped as the Mr Kipling and Oxo owner reported a decline in first-half profit and revenue as the benefit of lockdowns faded, with people eating out more as restrictions were lifted.


Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Vodafone Group Plc +5.16% +5.80 118.30
2 British Land Company Plc +3.05% +15.80 533.20
3 Diageo Plc +2.63% +100.50 3,917.50
4 Land Securities Group Plc +2.37% +16.80 727.00
5 Johnson Matthey Plc +1.59% +37.00 2,365.00
6 Intertek Group Plc +1.25% +64.00 5,190.00
7 Bt Group Plc +0.94% +1.55 166.50
8 Bp Plc +0.69% +2.35 343.90
9 Micro Focus International Plc +0.54% +2.20 411.00
10 Wpp Plc +0.50% +5.50 1,102.00


Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Severn Trent Plc -2.27% -64.00 2,758.00
2 Associated British Foods Plc -1.71% -34.50 1,987.50
3 Smurfit Kappa Group Plc -1.54% -61.00 3,897.00
4 Imperial Brands Plc -1.53% -24.50 1,573.50
5 Smith (ds) Plc -1.53% -6.00 385.40
6 United Utilities Group Plc -1.40% -15.00 1,055.50
7 Unilever Plc -1.29% -50.50 3,857.00
8 Tesco Plc -1.22% -3.50 282.40
9 Sainsbury (j) Plc -1.19% -3.50 291.20
10 Spirax-sarco Engineering Plc -1.11% -190.00 16,945.00


Europe open: Shares hit new highs on US-China talks

European shares continued to hit record highs at the open on Tuesday after positive mood music from the US-China leaders meeting and strong corporate earnings.

The pan-European STOXX 600 rose 0.35% in early deals, taking it within touching distance of 489 points. Investors were cheered by the three-hour meeting between US President Joe Biden and his China counterpart Xi Jinping.

Germany’s DAX and France’s CAC 40 also pushed into new high territory.

Sentiment was also helped by ECB President Christine Lagarde reiterated her pushback against expectations for tighter monetary policy. Investors will now turn their attention to euro area GDP figures, and a speech by Lagarde due later in the day.

In equity news, telecom giant Vodafone gained after strong quarterly results.

Shares in Dutch tech investor Prosus rose after the company forecast higher profit for the first half of 2022 as it gained proceeds to the tune of $12.3bn from selling part of its stake in Tencent.

Intermediate Capital Group shares rose as the company reported third-party assets under management of $65.35bn at the end of its first half on Tuesday, up 28% year-on-year as “strong momentum” continued across its three strategic objectives of fundraising, deployment and realisation.

Shares in Portugal’s Jerónimo Martins plunged after the Pingo Doce supermarket chain’s second largest shareholder Asteck sold its entire 5% stake in the company.

Asteck, which belongs to oil sector group Heerema, offered institutional investors 31.5m shares at €19.75 each, equivalent to €621.42m.


US close: Stocks flat as investors await retail sales data, earnings

Stocks ended the session much the same as they started them on Monday as Wall Street failed to bounce back from a losing week.

At the close, the Dow Jones Industrial Average was down 0.04% at 36,087.45, while the S&P 500 was flat at 4,682.80 and the Nasdaq Composite saw out the session 0.04% softer at 15,853.85.

The Dow Jones closed 12.86 points higher on Monday, building on gains recorded in the final session of last week.

Monday was a fairly uneventful day on the Street, with investors holding out for retail sales data tomorrow and new construction starts and building permits reports on Wednesday.

The only data point released on Monday was the latest Empire State manufacturing survey, which revealed the business activity grew strongly across New York, with the headline index climbing 11.1 points to 30.9, up from the previous month’s print of 19.8 and ahead of forecasts for a reading of 21.6.

Looking ahead, while firms that responded to the survey said they remained optimistic that conditions will improve over the next six months, they were less so than a month earlier as the index for future business conditions fell 15 points to 36.9.

Elsewhere, investors cheered President Joe Biden’s bill signing ceremony for the bipartisan Infrastructure Investment and Jobs Act, unlocking funds for transportation, broadband and utilities in the process, and also kept a close eye on the yield on the benchmark 10-year Treasury note, which crossed over 1.6% during the session.

No major corporate earnings were released on Monday but investors were looking out for results from several major retailers later in the week, with Walmart, Home DepotTarget and Lowe’s all reporting throughout the course of the week.

Elsewhere, Tesla stock closed 1.94% weaker after Elon Musk suggested he may sell more shares in the electric carmaker.


Tuesday newspaper round-up: Tax abuse, Amazon, Tesla

Countries are losing almost half a trillion dollars through tax abuse by multinationals and the super-rich, enough to fully vaccinate the global population against Covid-19 three times over, a report has said. Research by tax campaigners found that estimated losses had risen from $427bn last year to $483bn (£359bn) in 2021, with the UK alone responsible for almost 40% of the total. – Guardian

Amazon has agreed to pay a $500,000 fine and be monitored by California officials after the state’s attorney general said the company failed to “adequately notify” workers and health authorities about new Covid-19 cases. Amazon employs about 150,000 people in California, most of them at 100 “fulfillment centers” – sprawling warehouses where orders are packed and shipped. The agreement, which must be approved by a judge, requires the Seattle-based retailer to notify its workers within a day of new coronavirus cases in their workplaces. – Guardian

Tesla is making cars with missing USB ports and phone charging stations as manufacturers struggle to obtain even simple parts amid a global chip shortage. Multiple Tesla purchasers have discovered that their new vehicles, which start from £42,000, have been delivered without the connector ports used to plug in phones and the wireless charging pads in the car’s centre console. – Telegraph

Britain risks falling short of a new target to export £1 trillion of goods and services a year by 2034 as the Covid crisis continues to batter global trade, experts have warned. Analysts said that supply chain chaos and rising inflation mean the country faces an uphill struggle to hit the deadline, which is expected to be formally announced later this week as part of an effort to underline the Government’s “Global Britain” agenda. – Telegraph

Regional commercial law firms are boosting salaries for newly qualified solicitors by more than 20 per cent as they battle to keep pace with the City pay war. Researchers found that Osborne Clarke’s Reading office had increased salaries by £11,000 to £65,000 in just a year amid fears that heavyweight London legal practices will hire the cream of junior lawyers. Burges Salmon, a Bristol law firm, also increased pay for its newly qualified solicitors by 20 per cent to £60,000. – The Times


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