(Alliance News) - Stocks in London are expected to head lower at Friday's market open, as the year-end optimism about US rate cuts ebbs ahead of crucial economic data.
Investors were considering Thursday's US jobs data, which have set the stage for the closely-watched non-farm payrolls print due at 1330 GMT on Friday.
On Thursday, data from payroll processing firm ADP showed the US labour market added more jobs than expected in December. Meanwhile, US new jobless claims fell by more than expected in the most recent week. Together, they suggest the labour market is in pretty decent shape, despite historically high interest rates.
Friday's non-farm payrolls print has a "fine line" to tread, noted Stephen Innes, managing partner at SPI Asset Management.
"A too strong report could be a setback for stocks, aligning with expectations of rate cuts in [the second half of] 2024. Conversely, if the report aligns with or falls slightly short of expectations, it may reinforce beliefs in an imminent rate cut, potentially sparking a rally. On the other hand, a significantly weaker reading could renew concerns about a looming recession," Innes considered.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called down 49.3 points, 0.6%, at 7,673.77
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Hang Seng: down 0.7% at 16,531.34
Nikkei 225: closed up 0.3% at 33,377.42
S&P/ASX 200: closed down 0.1% at 7,489.10
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DJIA: closed marginally higher at 37,440.34
S&P 500: closed down 0.3% at 4,688.68
Nasdaq Composite: closed down 0.6% at 14,510.30
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EUR: down at USD1.0932 (USD1.0961)
GBP: down at USD1.2681 (USD1.2696)
USD: up at JPY145.11 (JPY144.48)
Gold: flat at USD2,045.36 per ounce (USD2,045.01)
Oil (Brent): up at USD77.95 a barrel (USD76.60)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
09:30 CET EU construction PMI
11:00 CET EU CPI
11:00 CET EU PPI
09:30 CET Germany construction PMI
09:00 GMT UK monthly car registrations
09:30 GMT UK construction PMI
08:30 EST US nonfarm payrolls
10:00 EST US ISM services PMI
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UK house prices rose for the third consecutive month, according to data from Halifax. The Halifax house price index rose 1.1% on a monthly basis in December, after rising 0.6% in November. The typical UK home cost GBP287,105 in December, around GBP3,066 higher than in November. This was the highest level seen since March 2023. On an annual basis, prices rose 1.7%, having fallen 0.8% in November. "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," noted Halifax Mortgages director Kim Kinnaird.
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BROKER RATING CHANGES
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Jefferies raises Marks & Spencer price target to 310 (180) pence - 'hold'
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Jefferies cuts Mondi to 'hold' (buy) - price target 1,650 (1,600) pence
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COMPANIES - FTSE 100
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Endeavour Mining late Thursday said it sacked its President & Chief Executive Sebastien de Montessus, for "serious misconduct" with immediate effect. The gold miner with assets in nations including Senegal and Burkina Faso said the move followed an investigation into an irregular payment instruction issued by him in relation to an asset disposal undertaken by the company. The irregular payment instruction amounted to USD5.9 million and was discovered in the course of a review of acquisitions and disposals, which is ongoing. De Montessus responded to the allegations, saying in 2021 he had instructed a creditor to "offset an amount owed to the company to pay for essential security equipment to protect our partners and employees in a conflict zone". This had "no additional cost to the company" and "did not benefit [him] personally in any way", he maintained. However, de Montessus conceded that omitting to inform the board of the arrangement was "a lapse in judgement".
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COMPANIES - FTSE 250
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Ithaca Energy said its CEO, Alan Bruce, has agreed will the board that he will step down to pursue new opportunities. Ithaca will begin a formal search process for his replacement, with CFO Iain Lewis to also take on the role of interim CEO in the meantime, with immediate effect. "I am extremely proud of what Ithaca Energy has accomplished over the past several years, with the company now established as one of the largest independent operators in the UK. Having led the business through its successful IPO, I am leaving with the company in a strong financial and strategic position," outgoing Bruce said.
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In a brief note, shipping services firm Clarkson said its annual performance for 2023 is anticipated to be ahead of current market expectations. It expects underlying pretax profit of no less than GBP108 million. It credits strong trading throughout the final quarter, particularly in its Broking division. It releases annual results in early March.
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Investment management firm Man Group said one of its non-executive directors, Alberto Musalem, will leave the board next month to take on the role of President & CEO of the Federal Reserve Bank of St Louis. Musalem succeeds James Bullard, who announced his resignation last July.
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OTHER COMPANIES
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Revolution Bars Group said it will close eight of its least profitable bars, as its younger customer base suffers disproportionately from the UK's cost-of-living crisis. It also points to a challenge from the 10.8% increase to the national living wage to come in April. However, the pub and bar operator said it had seen its best festive trading season in four years. Like-for-like sales rose 9.0% in the period from December 4 to 31. However, group like-for-like sales for the first half - including New Year's Eve - remained negative at minus 2.8%. It will update on its first-half trading later this month.
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By Elizabeth Winter, Alliance News deputy news editor
Comments and questions to newsroom@alliancenews.com
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