Last checked at 
(Alliance News) - Stocks in London are expected to open lower on Monday, as investors weigh up mixed economic data from the US before the weekend.
Friday's strong-looking US nonfarm payrolls data showed that the US economy added more jobs than expected in December. This led some to dial back expectations of interest rate cuts from the Federal Reserve in 2024, though a 25 basis point cut in March is still widely anticipated.
"Some saw a bit of weakness in the US job metrics pointing at the falling job openings and the falling participation rate, but rationally speaking, a nonfarm payrolls figure above 200,000 is not pointing at a severe slowdown which would urge the Fed to start cutting the rates in two-and-something months and cut by 150 basis points to the end of the year," considered Ipek Ozkardeskaya, senior analyst at Swissquote Bank.
However, the near-stagnant reading of the US service sector from the Institute of Supply Management is "very concerning for those looking for a canary", according to SPI Asset Managements' Stephen Innes.
"It serves as a potential warning signal that requires confirmation from other economic indicators," he added.
Here is what you need to know at the London market open:
----------
MARKETS
----------
FTSE 100: called down 28.0 points, 0.4%, at 7,661.61
----------
Hang Seng: down 2.2% at 16,174.69
Nikkei 225: financial markets in Japan closed for Coming of Age Day
S&P/ASX 200: closed down 0.5% at 7,451.50
----------
DJIA: closed up 0.1% at 37,466.11
S&P 500: closed up 0.2% at 4,697.24
Nasdaq Composite: closed up 0.1% at 14,524.07
----------
EUR: down at USD1.0944 (USD1.0966)
GBP: down at USD1.2713 (USD1.2738)
USD: up at JPY144.31 (JPY144.29)
Gold: down at USD2,033.02 per ounce (USD2,051.00)
Oil (Brent): down at USD77.66 a barrel (USD78.82)
(changes since previous London equities close)
----------
ECONOMICS
----------
Monday's key economic events still to come:
11:00 CET EU consumer confidence
11:00 CET EU retail sales
----------
UK Prime Minister Rishi Sunak has hinted that pre-election tax cut giveaways will be made on the back of "difficult decisions to control welfare". The PM said it was his "priority" to "keep cutting people's taxes" after a 2p cut in national insurance was introduced on Saturday, having been announced at the autumn statement. But he told The Sunday Telegraph: "There is no way we can do that unless we restrain the growth in the public sector and government spending." It raises the prospect that the Conservative Party leader could look to find headroom to offer tax cuts ahead of a general election by reducing public spending or reforming how welfare support is funded.
----------
UK Chancellor Jeremy Hunt has said he does not know if he can afford to cut taxes for British households as a national insurance reduction came into force. Hunt said he wanted to further ease a tax burden which is expected to rise to the highest since the Second World War before the end of this decade. But speaking to reporters, the chancellor said he was not sure if he could afford to reduce taxes. "It was right to support families through Covid and through the cost-of-living crisis, and yes taxes had to go up in that period," he said.
----------
The UK is the only one of the G7 group of countries where household budgets have not recovered to pre-pandemic levels, new research suggests. The Trades Union Congress said its study indicated that families would be GBP750 a year better off if real disposable income had grown in line with other leading economies. Real household disposable incomes in the UK were 1.2% lower in the second quarter of 2023 than at the end of 2019, said the union organisation. Over the same period they grew by 3.5%, on average, across the G7, which includes France, Germany and the US.
----------
Manufacturers believe the UK is a more competitive place to locate their activities compared with a year ago, research suggests. An increasing number of firms say they are moving ahead of their European rivals, although they remain wary of the huge threat to their competitiveness posed by the US, India and China, said a report. A survey of more than 200 senior manufacturing executives by Make UK and PwC found that after a difficult few years through the pandemic and rising energy prices, there are optimistic signs. Firms were said to be more bullish about the prospects for manufacturing in 2024.
----------
BROKER RATING CHANGES
----------
Barclays raises Crest Nicholson to 'overweight' (equal weight) - price target 258 (200) pence
----------
Barclays cuts Barratt Developments to 'equal weight' (overweight) - price target 560 (464) pence
----------
Berenberg raises Legal & General to 'buy' (hold) - price target 289 (258) pence
----------
COMPANIES - FTSE 100
----------
Oil major Shell gave an update on the outlook for the fourth quarter of 2023, ahead of its final results next month. For Integrated Gas, it expects production of 880,000 to 920,000 barrels of oil per day. Trading and optimisation in the division is expected to be "significantly higher" than the prior quarter, due to "seasonality and increased optimisation opportunities. For Upstream, it expects production between 1.83 and 1.93 million boepd.
----------
COMPANIES - FTSE 250
----------
Plus500 said 2023 was a year of "excellent operational and strategic progress", expecting its annual results to be "significantly ahead" of market expectations. The financial technology company providing online trading services said it expects revenue of around USD725 million and earnings before interest, tax, depreciation and amortisation of about USD340 million. This compares with company-compiled analyst forecasts of revenue of USD645 million and Ebitda of USD300 million back in October. Among the year's achievements, Plus500 cites "the expansion of the Group's US futures businesses, the launch of a localised retail trading platform in Japan and further progress in the significant UAE market following the grant of a regulatory licence earlier in the year". It looks ahead to 2024 with confidence, with cash at December 31 of about USD900 million.
----------
OTHER COMPANIES
----------
CMC Markets said it saw a strong performance in the third quarter of its financial year. "This was driven by an improvement in market conditions led by an increased contribution from the B2B and institutional business with the Group benefiting from the long-term investments in this area," the online trading platform company said. It now expects annual net operating income between GBP290 to GBP310 million compared to its previous guidance range GBP250 to GBP280 million.
----------
Novartis said that its cancer medicine Scemblix showed superior results compared to standard-of-care tyrosine kinase inhibitors for patients with a form of leukaemia. The Basel, Switzerland-based pharmaceuticals company said Scemblix showed superior major molecular response rates compared to standard-of-care tyrosine kinase inhibitors in a phase 3 trial for newly diagnosed patients with chronic myeloid leukaemia, a rare type of cancer that affects the bone marrow and white blood cells. Novartis said that "Scemblix demonstrated a favorable safety and tolerability profile with fewer adverse events and treatment discontinuations vs. standard-of-care tyrosine kinase inhibitors."
----------
By Elizabeth Winter, Alliance News deputy news editor
Comments and questions to newsroom@alliancenews.com
Copyright 2024 Alliance News Ltd. All Rights Reserved.
