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London open: Stocks little changed; miners under the cosh
London stocks were steady in early trade on Monday, with little in the way of corporate or macro news to provide direction, as investors looked ahead to a speech by US Federal Reserve chair Jerome Powell and the all-important non-farm payrolls this week.
At 0825 GMT, the FTSE 100 was down just 0.1% at 7,940.59.
Richard Hunter, head of markets at Interactive Investor, said: “Investors remain temperamental amid conflicting economic signals, with this week providing yet another test of the general mettle.
“Apart from Chair Powell’s comments this week in a two-day testimony to Congress, Friday looms large as the latest non-farm payrolls report falls due. Last month’s report rattled investors with a breath-taking addition of 517,000 jobs, and a further reduction to the unemployment rate, suggesting that the labour market is starting to show signs of immunity from the hiking cycle.
“However, expectations for February are more modest, with a consensus for 225000 jobs to have been added, while investors will also have an eye on any revisions to the previous bumper reading.”
In equity markets, miners were under the cosh after China set a modest economic growth target of around 5% for this year, below forecasts of about 5.5%. Anglo American, Antofagasta, Rio Tinto and Glencore were among the worst performers on the FTSE 100.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “It’s clear that a return to stability is Beijing’s main aim, rather than big expansionary plans, after the painful past few years. The 5% target for growth announced at the National People’s Congress was not as high as had been hoped, particularly given the recent resurgence in factory activity and business confidence, indicating there is reticence towards signing off any blockbuster stimulus plans any time soon.
“This will nudge down hopes that China could provide the extra steam to offset declines in other major economies, prompted by efforts to rein in rampant inflation. The exception appears to be for defence which will see budgets increased by more than 7%, but rather than being encouraging this development will be tinged with worries about heightened geopolitical risk.”
On the upside, B&Q owner Kingfisher and Tesco rallied after upgrade to ‘buy’ from ‘hold’ at Jefferies, while B&M European Value Retail was higher after an upgrade to ‘outperform’ from ‘sector perform’ at RBC Capital Markets.
Elsewhere, shipping services company Clarkson gained after it reported a sharp rise in annual earnings, driven by a strong performance in its broking division. Pre-tax profit for the 2022 calendar year came in at £100.1m, compared with £69.1m a year earlier. The total dividend was lifted to 93p a share from 84p.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Rolls-royce Holdings Plc | +2.89% | +4.32 | 153.96 |
| 2 |  |
Flutter Entertainment Plc | +2.13% | +285.00 | 13,645.00 |
| 3 |  |
Hikma Pharmaceuticals Plc | +1.48% | +26.00 | 1,784.00 |
| 4 |  |
Kingfisher Plc | +1.33% | +3.80 | 288.90 |
| 5 |  |
United Utilities Group Plc | +1.28% | +13.00 | 1,029.50 |
| 6 |  |
Bt Group Plc | +1.28% | +1.85 | 146.70 |
| 7 |  |
Easyjet Plc | +1.27% | +6.40 | 511.40 |
| 8 |  |
Tesco Plc | +1.05% | +2.70 | 259.00 |
| 9 |  |
Bae Systems Plc | +0.99% | +9.00 | 917.00 |
| 10 |  |
Carnival Plc | +0.93% | +7.60 | 828.80 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | -3.89% | -21.40 | 528.80 |
| 2 |  |
Anglo American Plc | -2.97% | -90.50 | 2,952.00 |
| 3 |  |
Rio Tinto Plc | -2.56% | -157.00 | 5,987.00 |
| 4 |  |
Antofagasta Plc | -2.13% | -35.50 | 1,628.50 |
| 5 |  |
Bhp Group Limited | -1.98% | -54.00 | 2,679.00 |
| 6 |  |
Hiscox Ltd | -1.87% | -20.50 | 1,076.50 |
| 7 |  |
Glencore Plc | -1.85% | -9.70 | 513.30 |
| 8 |  |
Smith (ds) Plc | -1.05% | -3.60 | 338.30 |
| 9 |  |
Mondi Plc | -0.95% | -13.50 | 1,407.00 |
| 10 |  |
Pearson Plc | -0.92% | -8.20 | 879.80 |
US close: Stocks higher following comments from Fed’s Bostic
Wall Street stocks closed higher on Thursday following comments from the Atlanta Federal Reserve’s Raphael Bostic, even as Treasury yields remained elevated.
At the close, Dow Jones Industrial Average was up 1.05% at 33,003.57, while the S&P 500 advanced 0.76% to 3,981.35 and the Nasdaq Composite saw out the session 0.73% firmer at 11,462.98.
The Dow closed 341.73 points higher on Thursday, extending yesterday’s very modest gains.
Market participants were zeroed in on rates at the open, with the benchmark 10-year note trading at 4.062% and the 2-year note reaching 4.904%. Both the rise in bond yields and fears of a potentially larger-than-expected interest rate hike from the Federal Reserve had weighed on the early 2023 rally over the last few days.
Sentiment got a boost after Atlanta Fed president Raphael Bostic stated he believes policymaker’s can keep interest rate hikes to 25 basis points rather than the half-point increase preferred by other officials.
However, Federal Reserve Bank of St Louis president Christopher Waller struck a cautious tone in comments to the Mid-Size Bank Coalition of America, stating that the central bank may very well look to institute a higher terminal rate if inflation numbers don’t cool off.
On the macro front, unemployment claims in the US were little changed during the week ended 25 February, according to the Department of Labor, which revealed that ,in seasonally adjusted terms, initial jobless claims drifted lower by 2,000 to reach 190,000. Economists had pencilled-in a small rise to 195,000.
In the corporate space, retailer Macy’s smashed expectations with its holiday-quarter earnings but warned of a choppier year ahead, Hewlett Packard posted a solid earnings beat and lifted guidance, while Dell topped estimates but guidance fell short of expectations, and Victoria’s Secret beat earnings estimates by $0.11 on revenues that topped expectations.
Monday newspaper round-up: Train fares, Morrisons, Arrival
Campaigners are calling for an end to the “peak fare rip off”, where commuters in some parts of the country face far higher mark-ups to travel at busy times. The call came after regulated rail fares in England and Wales jumped by 5.9% on Sunday – the biggest hike in a decade – adding hundreds of pounds to the cost of many annual season tickets despite record levels of poor service. – Guardian
Morrisons is planning to ditch at least 83 property maintenance suppliers, many based in its home city of Bradford, putting more than 1,000 jobs at risk as it shifts to a single provider for repairs. The debt-laden supermarket chain, which is battling to save costs after a takeover in October 2021 by the American private equity group Clayton Dubilier & Rice, is also likely to lay off up to 50 staff dealing with property maintenance at its Bradford head office and around the country. – Guardian
Troubled British electric van maker Arrival has been hit by a second winding up petition in less than a month. The business was last week hit with a fresh legal challenge from a creditor, a week after Arrival said it had secured $50m (£41.5m) in new funding. The latest petition comes from Rugby-based Lenoch Engineering, a machinery and robotics specialist. The legal threat, where a creditor demands a court shut down a company for missed payments, was issued on March 1, according to court records. Lenoch Engineering did not respond to requests for comment. – Telegraph
America is significantly more attractive than Britain for energy investment, Shell’s new chief executive has said. Wael Sawan said the government should “take a page from some of the things that the US have done recently, through the Inflation Reduction Act”, a $369 billion package of subsidies to spur green investment in America. – The Times
Increased flexible working would tackle staff shortages that threaten economic growth, experts have said. More of the working-age population would take up work or stay in jobs if they were offered greater flexibility on where and how they worked, analysts said. Central bankers have said a labour supply problem risks cutting the UK’s potential for growth. – The Times
