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FTSE 100 Live: Big miss for US non-farm payrolls lifts shares as oil hits another high

·16-min read

FTSE 100 Live Friday

FTSE closes up slightly and higher for the week

17:05 , Oscar Williams-Grut

The FTSE 100 has ended up 17 points, or 0.2%, at 7095. The index is 63 points higher than where it started the week.

BP and Shell topped the bluechip index, both gaining more than 2%, thanks to continued momentum for oil prices. Brent is up 1.6% today at $83.25 a barrel.

At the other end of the index is industrial design software group Aveva, which dropped 3.2%.

Fed taper focus

07:40 , Graeme Evans

The focus is on this afternoon's US non-farm payrolls data, which most observers think will determine whether the Federal Reserve's tapering of economic stimulus is a done deal. A weak jobs number, however, has the potential to stoke stagflation fears.

Last month's figure underwhelmed expectations after payrolls grew by 235,000, whereas for this month economists at Deutsche Bank are looking for an increase of more than 400,000 and an unemployment rate down to a post-pandemic low of 5.1%.

Oanda's senior markets analyst Jeffrey Halley warned: “I do not believe that markets have priced in the Fed taper and its implications to any large degree yet. Even a weak number probably only delays the inevitable for another month.

“Still, there is very much a binary outcome to tonight’s data. A number well below 500,000 equals buy everything, sell US dollars. A number 500,000 and above equals sell everything, but US dollars.”

China investors have returned from the week-long Golden Week holiday, with the plight of debt-laden Evergrande their main focus as shares of many developers and property firms fell sharply. There was some cheer from the country's economy, however, with PMI figures pointing to a rebound in services sector activity.

The FTSE 100 index is set to open broadly unchanged at 7,080, ending another week of uncertainty for investors amid inflationary pressures caused by rising energy prices.

Natural gas futures are showing more signs of stabilising at about 255p a therm, but Brent crude is today up 1% to $83 a barrel amid signs that industry is increasingly switching fuels in order to reduce exposure to the high price of gas.

Asda rolls-out one hour delivery service to nearly 100 shops

08:01 , Joanna Bourke

Asda has named 96 of its stores where a one-hour delivery express service will be offered from, as grocers seek to offer customers more shopping choices.

Shops where this will be introduced include Asda’s Old Kent Road and Isle of Dogs stores.

The supermarket chain, which the Issa brothers, Zuber and Mohsin, and private equity firm TDR Capital have bought a majority stake in, said in June its new ‘super speedy service’ would start at three branches following a trial.

See the full list of stores the service is being expanded to HERE.

Staycation sales boost for Hollywood Bowl Group

08:41 , Joanna Bourke

Hollywood Bowl has reported strong summer trading (Hollywood Bowl press image)
Hollywood Bowl has reported strong summer trading (Hollywood Bowl press image)

Staycationers and pent-up demand following lockdowns has helped Hollywood Bowl to achieve sales well ahead of pre-Covid levels.

The UK’s biggest tenpin bowling operator was allowed to start reopening sites from the latest lockdown in May, and social distancing rules relaxed in July after ‘freedom day’.

The firm, which has 61 bowling sites and three ‘Puttstars’ mini golf venues, said comparable sales between May 17 and September 30 were 29% higher than the same period in 2019.

Read the full story HERE.

Oil giants lift FTSE 100

08:46 , Graeme Evans

The FTSE 100 index is ending a choppy week 18.75 points higher at 7,096.79, aided by a surge in the oil price after the Senate approved another extension of the US debt ceiling.

The 1% gain for Brent crude to $83 a barrel came as it also emerged that the US Energy Department has no current plans to tap into strategic oil reserves in order to control the surge in energy prices.

BP and Royal Dutch Shell both saw their shares rise more than 1%, while the former Premier Oil business Harbour Energy lifted 5% in the FTSE 250 index.

The latest relaxation of travel restrictions meant shares in British Airways owner IAG surged 3% to the top of the FTSE 100 risers board.

Richard Hunter, head of markets at Interactive Investor, said: “Some sterling weakness is also propping up the FTSE 100 given its majority exposure to overseas earnings, while the more domestically focused FTSE 250 has recouped losses following some buying on the dip from investors still keen on the UK economic recovery story.”

Electrocomponents upbeat

08:50 , Graeme Evans

Electrocomponents, the distributor of 500,000 industrial and electronics items, looks to be on top of the global supply chain crisis after it revealed better-than-expected trading and continued product availability for customers.

Its UK business suffered slightly during the period of the Covid-19 'pingdemic' but has since recovered. Global like-for-like revenues rose 31% in the first half of the financial year.

Today's update sent its FTSE 250-listed shares up 1.5%, despite higher freight charges and its warning that ongoing supply chain pressures will mean trading is more weighted towards the first half than in previous years.

Founded in 1937 as Radiospares, the company operates under nine brands including RS Components and the technology business OKdo for computing and Internet of Things equipment. The company also supplies PPE and safety products to food manufacturers through its Needlers business.

Chief executive Lindsley Ruth said: “Our trading has remained very strong across all regions as we have worked closely with suppliers to ensure our product availability.”

Travel shares jump as Covid holiday restrictions lifted

09:59 , Simon English

AROUND £500 million was added to the value of big airline stocks today as the UK eased entry rules for 47 countries that were subject to the tightest Covid-19 restrictions.

That gives fresh hope to investors and managers that airlines will survive one of those most difficult periods in the industries history.

Easyjet had to raise £1.2 billion from shareholders to shore up its balance sheet just last month. It also rejected a cheeky takeover bid from rival Wizz Air. Ryanair boss Michael O’Leary said airlines other than his would have to merge to survive.

Read more here

Brighton Pier enjoys bumper summer

10:25 , Oscar Williams-Grut

The owners of the famous Brighton Pier today say “pent up” demand, good weather, and the boom in staycations helped the popular tourist attraction surpass pre-pandemic sales. Revenue was 14% above 2019 levels over the crucial summer trading period. The final August bank holiday saw the pier take in £1 million in a single week for the first time in its history.

The company was also boosted by news of an insurance pay out. Brighton Pier Group said it had secured £5 million through its business interruption insurance cover, which reimbursed the company for business lost during the pandemic. As a result, full year earnings are set to be £2 million higher than market forecasts.

Shares rose 10p, or 18%, to 63.53p.

Read the full story here.

M&S builds momentum

10:32 , Graeme Evans

Marks & Spencer's bid to convince a sceptical City that its recent upturn in fortunes won't just be another false dawn appears to be showing signs of progress.

Chief executive Steve Rowe and his management team yesterday met retail analysts at a capital markets event held a few weeks after a shock upgrade to profit forecasts.

Having sat through their fair share of M&S turnaround presentations, Peel Hunt's retail team of Jonathan Pritchard and John Stevenson think momentum is building this time amid the “confidence and new belief” coming from the retailer.

They wrote today: “The average age of the analysts at the M&S capital markets day was in line with the average M&S shopper, and they bear the scars of wrongly believing that “this time will be different” many times in the past.

“But never have we seen such an authoritative, confident showing from M&S, where weaknesses were owned up to and strengths demonstrated.”

The upbeat message from yesterday's presentation filtered through to the share price, which climbed 2.8p to 175.4p in the FTSE 250 index. Peel Hunt now recommends adding shares after increasing its price target to 190p.

It was an otherwise lacklustre session for the wider London market, with most upward pressure coming from the energy sector after the Brent crude price rose to a fresh three-year high of $83 a barrel. The surge followed Senate approval for another extension of the US debt ceiling and as it emerged there are no current plans to tap into US strategic reserves.

BP and Royal Dutch Shell both saw their shares rise more than 1%, while the former Premier Oil business Harbour Energy lifted 6% in the FTSE 250 index.

The FTSE 100 index was 3.15 points higher at 7,081.26, led by British Airways owner IAG as the latest relaxation of Covid travel restrictions helped shares up 2.78p to 179.6p. The FTSE 250 improved 10.47 points to 22,569.85.

The session also marked the debut of Prague-based Eurowag, which has been dubbed the Uber of the trucking world. Shares were priced at the low end of expectations and immediately reversed 10% from their 150p starting point.

GrubHub founder leaves after Just Eat sale

11:08 , Oscar Williams-Grut

The boss of US food delivery startup GrubHub is leaving the business just months after completing a sale of to Just Eat

Matt Maloney will step down from the newly combined company’s management board “to pursue other opportunities”. He leaves on 1 December.

Maloney co-founded food delivery app GrubHub in Chicago in 2004. He grew into a business with over $1 billion in turnover and took the company public in New York in 2014. His exit comes shortly after Just Eat completed a $7.3 billion takeover of the business in June.

Read the full story here.

Games Workshop board member leaves after a year

11:22 , Oscar Williams-Grut

Games Workshop today announced the departure of Sally Matthews from its board after just a year. The figurine retailer said Matthews would resign as non-executive director and chair of the audit and risk committees when the company’s current reporting period comes to an end on 28 November.

Matthews, an accountant by training, joined Games Workshop’s board last October. She previously worked at meal delivery kit company Gousto and had spent time at and Unilever. Reasons for her departure weren’t given.

Games Workshop thanked Matthews for her “valuable contribution” and said a recruitment process was underway to find a replacement.

Shares slipped 95p, or 1%, to 9705p.

Tesco and Royal Mail kick off Christmas recruitment drive — but can they fill the roles?

11:45 , Oscar Williams-Grut

Tesco and Royal Mail today officially kicked off their festive recruitment campaigns. Tesco is seeking 30,000 temporary staff, with half the roles already filled by extending the contract of staff brought on during the pandemic. Royal Mail is after 20,000 seasonal workers to deal with the annual spike in Christmas cards, presents and other festive deliveries.

The jobs push follows similar announcements from other major retailers. Sainsbury’s is hunting 22,000 Christmas workers, Amazon is recruiting 20,000, John Lewis Partnership hopes to add 7,000 seasonal staff, Morrisons is on the hunt for 3,000 temps, and Aldi is after 1,500.

In total, major retailers have so far announced plans to hire around 100,000 seasonal workers across the sector. The figure is likely to be higher when other smaller retailers are factored in, with more announcements likely in the coming weeks.

There are fears that companies could struggle to fill the roles. The UK already has more than 1 million open jobs across the country. Companies are struggling to hire workers after many overseas workers left during the pandemic. Many seasonal workers who used to come from Europe have also been put off by Brexit.

Read the full story.

Helical CEO says “sentiment has moved away from wfh"

12:15 , Joanna Bourke

The boss of Helical has said “sentiment has moved away from WFH”, as the London offices landlord updated on rent collection.

Gerald Kaye said that comes as “companies appreciate the importance of the office in motivating teams, as well as working collaboratively and with far greater effectiveness”.

You can read more HERE.

Royal Mail goes west

12:25 , Simon Freeman


Royal Mail is tapping into the worldwide surge in online shopping with the £210 million acquisition of one of Canada’s biggest trucking firms.

The delivery group’s overseas freight arm GLS International is picking up family-owned freight group Rosenau Transport to expand operations in North America’s $25 billion parcel market, which is growing at 5% a year.

The Rosenau network will tie up with existing GLS routes on the US west coast, extending its cross-border capacity.

Full story here

Zapp expands in London as on-demand grocery market remains red-hot

14:00 , Oscar Williams-Grut

Zapp, the app that promises to deliver everything from nappies to bananas to your door in less than 20 minutes, is opening a major distribution centre in London as competition in the red-hot grocery delivery sector continues to heat up.

The London-headquarter company is opening its first centralised stock hub to help drive down costs and protect it from the ongoing supply chain chaos that is causing havoc for even some of the biggest supermarkets. Zapp has signed for 25,085 sq ft of space in Park Royal in West London.

The expansion comes amid red-hot competition in the on-demand grocery delivery space. Asda today announced plans to extend its one-hour grocery delivery service to more stores after a successful trial this summer. Express delivery will be rolled out to 96 more shops, including the Isle of Dogs and Old Kent Road in London.

Read more.

US jobs data falls short

14:58 , Simon Freeman

A big miss in US job data sent shares higher on both sides of the Atlantic this afternoon as investors bet on a delay to the Federal Reserve tapering of multi-trillion dollar stimulus.

The Labor Department’s closely watched nonfarm payrolls report showed hiring increased by 194,000 jobs last month, far less than the 500,000 jobs expected by Wall Street analysts.

While unemployment rate fell to 4.8% from 5.2% in August, average hourly earnings rose by a more-than-expected 0.6%.

Fed chair Jerome Powell has said it would take a reasonably good employment report" to meet the central bank’s threshold to start reducing its massive bond buying program as soon as November.

At 9am ET (2pm UK time), Dow e-minis were up 11 points, or 0.03%, S&P 500 e-minis were up 9.75 points, or 0.22%, and Nasdaq 100 e-minis were up 83.25 points, or 0.56%.

In London the FTSE 100 reversed a morning slump to rebound 30 points to 7105p.

The dollar has dipped sharply against both the Euro and the embattled pound, just as it did after August’s weak jobs data was released a month ago.

Hinesh Patel, portfolio manager at Quilter Investors, said: “Following August’s big miss, the US jobs market has suffered another big miss in September.

“Like we’ve seen at times during the pandemic, there is a big asymmetry in what’s good and bad for the economy and markets. Bad news for the economy could well be seen as good news for markets.

“The fact that job growth has fallen well behind expectations may be interpreted as meaning the Fed’s starting line for tapering could be pushed that little bit further away.”

Ryan Detrick, chief market strategist at LPL Financial, said: "This weak number doesn’t push the Fed to need to taper any sooner. It might be December now versus November but it probably doesn’t rock the boat too much and tapering likely still takes place later this year.”

The numbers follow a temporary reprieve after US Senate last night agreed to raise the federal government’s $28.4 trillion debt limit staving off concerns of a potential US default,

High-growth stocks Apple Inc, Google-parent Alphabet, Inc and Tesla edged up, boosting Nasdaq futures.

Energy firms including Chevron Corp and Exxon Mobil Corp gained about 0.3%, tracking crude prices, while major US lenders slipped as the benchmark 10-year yield eased after the jobs data.

Richard Hunter at interactive investor said: “The US economy has suffered over recent months due to a combination of factors ranging from an uptick in Delta variant cases to supply chain and job shortages. “Further colour will be given on the state of the nation next week, when the third quarter reporting season begins in earnest as the banks report.

“Investors will be focused on any elevated fee income following a surge of M&A activity, further bad debt releases, levels of loan appetite and trading profits following a volatile quarter.”

‘A swing and a miss'

15:47 , Oscar Williams-Grut

Markets are still digesting this afternoon’s miss for US jobs numbers.

Robert Alster, CIO at Close Brothers Asset Management, says: “This swing and miss for the US will come as a real disappointment to the Fed. Consumer confidence is low and the leisure, hospitality, and retail sectors continue to struggle. All hopes were pinned on a substantive recovery in hiring close to the 500k market consensus to get the economy back on track. Instead, hiring is a mere 194K.

“However, health data has improved since the middle of September, and the benefit of earnings growth of 4.6% will be felt once inflation slows from current super-high levels. Nonetheless, this data print undermines the case for the Fed had of scaling back its stimulus programme this side of Christmas.”

‘A roller coaster week'

16:42 , Oscar Williams-Grut

Danni Hewson, AJ Bell financial analyst, reflects on the week for stocks: “It’s been a bit of a roller coaster of a week for markets, bombarded with warnings about rising inflation, disappointing jobs figures from the US and that big social media blackout.

“On London’s blue chip index supermarket Tesco has come out on top after some stonking figures and a promise to save Christmas. In this case size really does seem to matter as suppliers tend to put their biggest client to the top of their to do lists. At the other end of the scale BT has taken something of a drubbing amidst circling rumours that it could face a serious challenge to its broadband infrastructure dominance. Whether or not Sky, TalkTalk and Vodafone do ultimately make the switch, investors are clearly uneasy.

“But it’s gas prices that have dominated the conversation this week and the potential impact on household budgets of the myriad of inflationary pressures coming to the fore. In the abstract, discussions about economies running a little hot whilst they recover from the shock of COVID lockdowns seems sensible, but when businesses and consumers start to feel the squeeze with every purchase it takes on a different tenor. “

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