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London open: Stocks rise after UK jobs data, ahead of US inflation
London stocks edged higher in early trade on Tuesday as investors mulled the latest UK jobs data – which showed that wage growth eased – and looked ahead to a key US inflation reading and a string of central bank policy announcements this week.
At 0830 GMT, the FTSE 100 was up 0.3% at 7,570.88, following positive sessions in the US and Asia.
Richard Hunter, head of markets at Interactive Investor, said: “Wall Street finished higher once more, continuing the momentum which is fuelling hopes of a Santa rally until the year end.
“Hurdles still remain which could derail sentiment, and many of those are due to be revealed this week. The consumer price index reading is due later today, where it is expected that inflation will have continued to cool, while critically remaining in excess of the Federal Reserve’s target of 2%. At the headline level, the figure is expected to reduce to 3.1% from 3.2% in October, with core inflation steadying at 4%.
“The producer price index reading will follow tomorrow, revealing the path of inflation at the wholesale level, which is also expected to show a further easing. Either of these inflation readings have the potential to upset the investment applecart, with any unexpected strength in the numbers likely to add to the debate of when the Fed will begin to consider lowering rates next year. The current consensus points towards the first cut coming in May, but this is likely to fluctuate depending on the economic data.”
The latest policy announcement from the Fed is due on Wednesday, followed by the Bank of England and the European Central Bank on Thursday.
On home shores, figures released earlier by the Office for National Statistics showed that the amount of people out of work remained unchanged in October, while wage growth cooled.
The unemployment rate was largely unchanged in the three months to October, at 4.2%. Also largely unchanged was the economic inactivity rate, at 20.9%.
Annual growth in total pay was 7.2%, or 7.3% once bonuses were stripped out. That compares to last month’s growth of 7.7% and was a smaller increase than analysts had been expecting, with consensus for 7.5% growth in regular pay.
Once adjusted for inflation, annual total pay rose by 1.3% and regular pay by 1.4%.
The number of vacancies, meanwhile, fell by 45,000 in September to 949,000 in the September to November period.
It is the seventeenth consecutive period that vacancies have fallen, making it the longest unbroken run of quarterly falls ever recorded.
A total of 30.2m people were payrolled employees in November, down 13,000 on October’s revised figure.
In equity markets, AstraZeneca gained as it agreed to buy US vaccine maker Icosavax for up to $1.1bn.
Miners were in the black following heavy losses in the previous session, with Rio, Antofagasta and Glencore all sharply higher.
On the downside, Hargreaves Lansdown and AJ Bell tumbled after the Financial Conduct Authority said it had written to investment platforms and SIPP operators setting out its concerns about how they deal with any interest earned on customers’ cash balances.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Ocado Group Plc | +2.25% | +14.20 | 646.60 |
| 2 |  |
Rio Tinto Plc | +2.17% | +119.00 | 5,603.00 |
| 3 |  |
Antofagasta Plc | +1.66% | +25.50 | 1,561.50 |
| 4 |  |
Rightmove Plc | +1.62% | +9.40 | 591.00 |
| 5 |  |
Bhp Group Limited | +1.56% | +38.50 | 2,503.50 |
| 6 |  |
Astrazeneca Plc | +1.51% | +152.00 | 10,248.00 |
| 7 |  |
Legal & General Group Plc | +1.50% | +3.60 | 243.90 |
| 8 |  |
Centrica Plc | +1.50% | +2.15 | 145.90 |
| 9 |  |
Scottish Mortgage Investment Trust Plc | +1.47% | +11.00 | 758.00 |
| 10 |  |
Glencore Plc | +1.31% | +5.75 | 445.05 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Hargreaves Lansdown Plc | -7.79% | -59.60 | 705.60 |
| 2 |  |
Bt Group Plc | -3.35% | -4.40 | 126.95 |
| 3 |  |
St. James’s Place Plc | -1.56% | -10.80 | 681.80 |
| 4 |  |
United Utilities Group Plc | -1.08% | -12.00 | 1,095.50 |
| 5 |  |
Vodafone Group Plc | -1.04% | -0.71 | 67.84 |
| 6 |  |
Lloyds Banking Group Plc | -1.02% | -0.47 | 45.65 |
| 7 |  |
Smith (ds) Plc | -0.96% | -2.90 | 300.10 |
| 8 |  |
Admiral Group Plc | -0.79% | -22.00 | 2,776.00 |
| 9 |  |
Imperial Brands Plc | -0.44% | -8.00 | 1,809.00 |
| 10 |  |
Severn Trent Plc | -0.41% | -11.00 | 2,700.00 |
US close: Stocks extend December rally
Wall Street stocks closed higher on Monday as investors looked ahead to the Federal Reserve‘s final meeting of the year.
At the close, the Dow Jones Industrial Average was up 0.43% at 36,404.93, while the S&P 500 advanced 0.39% to 4,622.44 and the Nasdaq-100 saw out the session 0.20% firmer at 14,432.49.
The Dow closed 157.06 points higher on Monday, extending gains recorded in the previous session on the back of news that the US economy had added more jobs than expected in November.
No major data points were released on Monday, with traders instead patiently awaiting the outcome of the central bank’s last policy meeting of 2023 on Wednesday, as well as key inflation data in the form of November’s consumer and producer price indices, due out on Tuesday and Wednesday, respectively.
The Federal Reserve was widely expected to maintain its fed funds rate in the 5.25-5.5% range, with chairman Jerome Powell also expected to reiterate his commitment to lowering inflation.
In the corporate space, Macy’s surged after news broke that the retailer had received a $5.8bn buyout offer from an investor group consisting of Arkhouse Management and Brigade Capital.
Elsewhere, Oracle shares headed south in extended trading after the tech firm posted revenues that fell short of estimates, even as cloud services demand continued to grow.
Still to come, tech giant Adobe and retailer Costco will deliver their latest quarterly reports on Wednesday and Thursday, respectively.
Tuesday newspaper round-up: Epic Games, Adobe, BAT
Bank of England concerns over the high level of pay awards are likely to be eased in the coming months as wage settlements fall in response to a tumbling annual inflation rate, a thinktank has said. The Resolution Foundation said recent strong growth in earnings was primarily caused by a sharp increase in the cost of living, with workers trying to prevent their living standards being eroded. – Guardian
Epic Games, maker of Fortnite, has prevailed in an antitrust trial over Alphabet’s Google Play app marketplace, Epic’s chief executive said on Monday, hours after the federal jury took up the case. “Victory over Google! After 4 weeks of detailed court testimony, the California jury found against the Google Play monopoly on all counts. The Court’s work on remedies will start in January,” Tim Sweeney wrote in a post on X, formerly known as Twitter. – Guardian
The world is edging towards a “new Cold War” that risks “annihilating” free trade as we know it, the deputy managing director of the International Monetary Fund (IMF) has warned. Gita Gopinath said “growing fault lines” in the global economy, such as tensions between the US and China and Russia’s invasion of Ukraine, had created permanent shifts in the way countries do business. – Telegraph
With a population of around 3,000, Fordham, Cambridgeshire, is not known to be a hotbed of organised crime. But for Jonathan James, who opened a new Fresh & Proper shop in the village with his son Joshua in June, it has become the site of an ongoing battle with shoplifting gangs. – Telegraph
The UK competition regulator is stifling innovation and entrepreneurship by taking too long to make decisions, according to a senior Adobe executive who is overseeing its $20 billion takeover of Figma. In an interview with The Times, David Wadhwani, president of Adobe’s Digital Media business, said: “The process should not take 15 months to get to the stage. I think we can all agree that expediting these kinds of decisions is important for innovation and for doing the right thing by consumers and customers to make these decisions faster and move more quickly.” – The Times
A secretive Cayman Islands-based tycoon, one of the largest shareholders in British American Tobacco, has raised his stake in the maker of Dunhill and Lucky Strike following a share sell-off in the cigarette company last week. Spring Mountain Investments, the vehicle of Kenneth Dart, a billionaire heir to an American foam cups fortune, has increased his position to 10 per cent from 9 per cent, new stock market filings show. – The Times
