The FTSE 100 was down and US stocks were up on Friday, as US non-farm payroll data beat expectations. Photo: Reuters/Kevin Lamarque/File Photo (REUTERS / Reuters)
The FTSE 100 was down and US stocks were up on Friday, after a rocky first few days of the year, as US non-farm payroll data beat expectations.
Ahead of the data, investors had been paring their bets that central banks will look to push ahead with earlier than expected interest rate cuts.
London's flagship index (^FTSE) was down 0.4% by the end of the session, while Frankfurt's DAX (^GDAXI) was up 0.2% and the CAC (^FCHI) in Paris fell 0.2%. The Stoxx 600 (^STOXX) was down 0.1%.
US non-farm payrolls are a closely watched set of data which guides US Federal Reserve thinking on its interest rate path.
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Payroll gains were 216,000, while estimates had pointed to an increase of 171,000 in December from 199,000 in November.
Growth over the past few months has been affected by strike action to the tune of approximately 30,000.
Meanwhile, unemployment flatlined at 3.7%. The unemployment rate was expected to have ticked up a tenth to 3.8%. Wages, which were forecast to remain steady at 0.3% m/m and 3.9% y/y, were up 0.3% month-on-month.
After the opening bell, the S&P 500 (^GSPC) was up 0.6%, the Dow (^DJI) rose 0.3% and the Nasdaq (^IXIC) rose 0.7%.
Numbers released on Thursday also suggested the US's economy and labour market are resilient.
Endeavour Mining (EDV.L) was the stock to watch on Friday, dragging the FTSE down with a 12% fall as markets opened in London, following the ouster of CEO Sébastien de Montessus for serious misconduct. By the closing bell it was still down 6.4%.
The miner said this followed an investigation into an irregular payment instruction issued by De Montessus. The payment totalled $5.9m (£4.67m), and was in relation to an asset disposal undertaken by the company (more on this in the blog).
Meanwhile, new data has shown UK footfall took a beating in December, due to rainy weather deterring shoppers. The British Retail Consortium's (BRC) IQ data showed a 5% decline year-on-year in December, compounding a 0.7% fall in November.
The fall also reflects the fact that December 2022 saw pent up demand for in-person shopping following pandemic shutdowns, the BRC said.
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Lucy Harley-McKeown
Maersk and the Red Sea
Bloomberg has the latest on the Red Sea drama:
Maersk plans to continue diverting ships away from the Red Sea “for the foreseeable future” after pausing transits earlier this week https://t.co/cPIWN0FsiW
The shipping provider had been targeted in an attempt to disrupt the flow of goods to and from Israel, as the conflict between the Israeli government and Hamas rages on.
It's now saying it will divert ships from that route for the 'foreseeable future'.
“By suspending voyages through the Red Sea / Gulf of Aden, we hope to bring our customers more consistency and predictability despite the associated delays that come with the re-routing,” the company said in a statement on its website. “All available intelligence at hand confirm that the security risk continues to be at a significantly elevated level.”
Lucy Harley-McKeown
Peloton on a premarket run
Exercise equipment company Peloton stock finished almost 14% higher on Thursday and was continuing its ascent in premarket trade on Friday, after announcing a partnership with TikTok. As part of the deal, Peloton content will be featured on a dedicated fitness hub on the platform.
This marks the first time the exercise bike company will produce bespoke social content for a partner outside of its own channels. With TikTok's more than one billion active users globally, the partnership will bring fresh audiences to its content, which is usually licensed and distributed via its machines.
It's currently up 7.5% in premarket trade.
Lucy Harley-McKeown
What's going on at Endeavour?
Endeavour Mining stock went into free fall this morning as markets opened in London, settling at around 12% lower after news broke on Thursday that its CEO Sébastien de Montessus had been fired due to serious misconduct related to the sale for a company asset.
The moves were made after a board investigation into an “irregular payment instruction” of $5.9m issued by de Montessus.
In a statement, the former executive said that in 2021 he instructed an unnamed creditor of the company to offset an amount owed for essential security equipment, to protect its partners and employees in an unspecified conflict zone.
He added that the transaction did not benefit him in any way, but he had failed to inform the board about the misconduct "which I have freely accepted was a lapse in judgement.”
The company is also considering how to respond to allegations made in October about the CEO's personal conduct with colleagues.
Lucy Harley-McKeown
FTSE risers and fallers
Propping up the FTSE at 9.30am we have:
ConvaTec — up 0.5% ⬆️
Centrica — up 0.6% ⬆️
GSK — up 0.3% ⬆️
Severn Trent — up 0.2% ⬆️
(... not that many stocks are up today!)
And dragging it down:
Endeavour Mining — down 13.8% ⬇️
IMI — Down 3.8% ⬇️
RS Group — down 3.7% ⬇️
Ashtead — down 3.2% ⬇️
Diageo — down 2.8% ⬇️
Lucy Harley-McKeown
Non-farm payrolls
Here's Neil Wilson, Finalto's chief market analyst, on the NFPs:
After the FOMC minutes confirmed our view that the Fed is not quite so close to cutting rates as the market has been pricing, today’s payrolls numbers will be of some importance once more. The consensus estimate is +170k, with a range +80k to +225k. Meanwhile, the unemployment rate is seen ticking up to 3.8% from 3.7% and wages are seen down a tad at +3.9% year-over-year from 4.0%.
Yesterday’s ADP was strong yesterday. December payrolls +164k vs. +125k estimate, up from +101k prior. This was the largest increase since last August. ADP has a sketchy record when it comes to predicting the BLS nonfarm data of course. GS: “We left our nonfarm payroll forecast unchanged at +190k ahead of tomorrow’s release, above consensus of +171k.
Pedro Goncalves
UK house prices on the up for third month in a row
Average UK house prices rose for the third straight month in December to their highest level since March 2023 as lower mortgage rates fuelled a revival in the property market.
The cost of an average home rose by 1.1% to £287,105, just over £3,000 more than in November and the highest level since March, Halifax said.
It was the third monthly gain in a row after six consecutive falls before that.
Property values increased by 1.7% on average across 2023, ending the year £4,800 higher than it had been at the end of 2022.
Kim Kinnaird, director at Halifax Mortgages, said: “The growth we have seen is likely being driven by a shortage of properties on the market, rather than the strength of buyer demand.
“That said, with mortgage rates continuing to ease, we may see an increase in confidence from buyers over the coming months.”
Lucy Harley-McKeown
Overnight in the US and Asia
Stocks in the US were broadly mixed overnight, with the tech-heavy Nasdaq (^IXIC) the biggest loser, down 0.6%. Thursday marked the indexes longest losing streak since October 2022, as jittery traders pare back risky bets while they assess the possibility of rate cuts.
Meanwhile the Dow (^DJI) was almost flat and the S&P 500 (^GSPC) finished 0.3% lower.
Over in Asia, Chinese stocks continued to lag, having started the year down due to poor manufacturing data and long-running worries about growth. The Hang Seng (^HSI) finished Friday 0.7% lower as the SSE Composite (000001.SS) fell 0.9%.
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