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London open: Stocks edge higher with U.S. jobs data in focus
London stocks were trading on a slightly mixed note, even as investors waited on the release of the latest monthly non-farm payrolls report in the States.
Ahead of that, as of 0848 BST, FTSE 100 was edging up 0.02% to 7,531.61, while the second-tier index was ahead by 0.28% to 18,887.79.
“The most important day of the month is here: the US NFP. This particular data set has the ability to not only dictate the trading tone for the day but also set the momentum for the rest of the month. Given the strong US ADP number, the bar is set high for today’s number to print a strong reading,” said Naeem Aslam, chief investment officer at Zaye Capital Markets.
“And the question for traders and investors is whether a strong number is going to be perceived as good news for the market players or if this number will make traders fear further rate hikes by the Fed, which is in the process of taming inflation.”
At 1330 BST, the U.S. Department of Labor was scheduled to publish the non-farm payrolls report for the month of July.
Consensus was for a 175,000 increase in payrolls, although some economists were anticipating a much larger increase.
Leading indicators for the U.S. jobs market had been mixed of later, with some data pointing to near-term strength even as other economic reports appeared to point to further weakness in the pipeline come autumn.
Worth noting, overnight Chinese officials pledged to support economic growth in the back half of 2023.
Significantly, Amazon shares ran up by 9% in after hours trading in New York following the release of its latest quarterly numbers, but those of Apple traded 2% lower on the back of its own figures.
Capita in the red during 1H
Government contractor Capita posted a loss for the half-year, including taking a hit of up to £25m from a cyber attack on its computer systems earlier this year. The company made a loss before tax of £67.9m, compared with a profit of £0.1m due to business exits, non-core portfolio goodwill impairment and costs associated with the cyber incident. On an adjusted basis, Capita’s pre-tax profit increased by £8.4m to £33.1m. Turnover rose 3% to £1.47bn.
Advertising giant WPP on Friday cut its like-for-like growth forecast for the full year due as North America revenues fell in the second quarter. The company said it now expected growth of 1.5-3%, downgraded from a previous estimate of 3-5%, driven by lower spending from technology clients. Interim profit before tax fell more than halved to £204m from £419m a year ago. “Our performance in the first half has been resilient with Q2 growth accelerating in all regions except the USA, which was impacted in the second quarter by lower spending from technology clients and some delays in technology-related projects,” said chief executive Mark Read.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Flutter Entertainment Plc | +3.31% | +485.00 | 15,125.00 |
| 2 |  |
Rolls-royce Holdings Plc | +2.47% | +4.75 | 196.95 |
| 3 |  |
Mondi Plc | +2.29% | +28.50 | 1,274.00 |
| 4 |  |
St. James’s Place Plc | +2.05% | +17.80 | 887.40 |
| 5 |  |
Easyjet Plc | +2.01% | +8.90 | 451.00 |
| 6 |  |
Tui Ag | +1.99% | +11.50 | 589.50 |
| 7 |  |
Hikma Pharmaceuticals Plc | +1.65% | +34.00 | 2,094.00 |
| 8 |  |
Bp Plc | +1.40% | +6.70 | 484.55 |
| 9 |  |
Melrose Industries Plc | +1.31% | +6.80 | 524.00 |
| 10 |  |
Bae Systems Plc | +1.30% | +13.00 | 1,013.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Wpp Plc | -6.66% | -56.40 | 790.80 |
| 2 |  |
Fresnillo Plc | -1.47% | -8.20 | 550.00 |
| 3 |  |
Croda International Plc | -1.36% | -78.00 | 5,646.00 |
| 4 |  |
Antofagasta Plc | -1.26% | -20.50 | 1,604.50 |
| 5 |  |
British Land Company Plc | -1.08% | -3.60 | 330.20 |
| 6 |  |
Admiral Group Plc | -1.08% | -23.00 | 2,111.00 |
| 7 |  |
Rio Tinto Plc | -1.06% | -53.00 | 4,946.50 |
| 8 |  |
Anglo American Plc | -1.00% | -22.50 | 2,227.50 |
| 9 |  |
Ocado Group Plc | -0.95% | -8.20 | 853.60 |
| 10 |  |
Direct Line Insurance Group Plc | -0.86% | -1.30 | 149.35 |
US close: Stocks dip as Treasury yields grind higher
Wall Street finished slightly lower, despite the release of mostly positive economic data, as investors continued to try and make heads or tails of the downgrade of the country’s sovereign debt rating the day before.
“US stocks are getting hit with a one-two punch as Fitch’s US sovereign downgrade overnight and on expectations the US Treasury will continue to boost the size of their debt sales,” said Edward Moya, senior market analyst at Oanda.
“Earnings have been still coming mostly better than expected but the major indexes don’t seem to have anything left in the tank to take Wall Street back to record highs.”
The Dow Jones Industrials dipped 0.19% to 35,215.89, the S&P 500 by 0.25% to 4,501.89 and the Nasdaq Composite by 0.1% to 13,959.72.
The VIX volatility index on the other hand was up by 5.59% to 16.99.
In parallel, the yield on the benchmark 10-year US Treasury note was seven basis higher to 4.16% and fast approaching its 52-week highs at 4.325%.
According to the Department of Labor, initial jobless claims increased by 6,000 over the week ending on 29 Julyo to reach 227,000, as expected by economists.
Those figures came alongside others showing a sharp drop in layoff announcements by companies and a slower-than-expècted increase in unit labour costs.
Consensus for the July non-farm payrolls report due out the next day was for a gain of 175,000, but some economists saw scope for a much larger rise.
The Institute for Supply Management’s services sector Purchasing Managers’ Index on the other hand did slip from a reading of 53.9 for June to 52.7 in July (consensus: 53.0).
Friday newspaper round-up: Wilko, Bank of England, Oil prices
Budget homeware chain Wilko was yesterday teetering on the brink of collapse, putting around 12,000 jobs at risk. The retailer, which has around 400 stores, said that it was primed to appoint administrators after struggling to find a financial lifeline. In recent years the High Street has been struggling with painful cost increases, while shoppers’ budgets have been restricted by historically high inflation levels. – Daily Mail
Five savings providers have announced they are upping easy-access deals following the Bank of England‘s base rate hike. Skipton Building Society and Nationwide Building Society are among those upping their variable rates in response to the Bank of England adding 0.25 percentage points on to base rate to take it to 5.25 per cent earlier today. HSBC has boosted rates on its easy-access accounts, Isas and children’s accounts, while First Direct bank has also upped rates across its easy access accounts and Isa. – Daily Mail
Oil prices rose by more than 2 per cent yesterday after Saudi Arabia warned that it would extend cuts to production in conjunction with Russia into September and possibly beyond. Saudi Arabia said it would extend a voluntary oil output cut of one million barrels per day for another month to include September, adding it could be extended beyond that or deepened. Its daily production is expected to be about 9 million barrels in September. – The Times
Transparency campaigners have called for thinktanks to be more open about their funding sources, after it emerged that some of Britain’s most influential ones received more than $1m (£787,000) from from donations in the US in 2021. They include the Institute of Economic Affairs (IEA), regarded as an inspiration for policies adopted by the Liz Truss government, and Policy Exchange – a conservative thinktank used as a platform by ministers to trail new measures and which recently incubated hardline immigration plans. – Guardian
