LONDON (Alliance News) - The FTSE 100 moved into the red by the close on Friday despite posting early gains, while US jobs data came in well ahead of consensus. The FTSE 100 index closed 0.3% lower, or 20.54 points, at 7,094.12 - though it has ended the week 2.2% higher. The FTSE 250 ended up 0.8%, or 153.80 points, at 19,325.73, and the AIM All-Share finished 0.8% higher, or 7.70 points, at 995.88.The Cboe UK 100 closed flat at 12,038.96, while the Cboe UK 250 finished 1.0% up at 17,495.84. The Cboe UK Small Companies ended the day 0.6% higher at 11,671.43.In European equities, the CAC 40 in Paris ended up 0.4%, while the DAX 30 in Frankfurt also finished up 0.6%."Its deja vu for the FTSE 100 and DAX 30 as both markets had a positive run during the morning, but have edged lower since lunchtime, and are now showing tiny gains," said CMC Markets UK's David Madden."Since the markets have run out of steam in the afternoon, dealers are a little concerned the market bounce back from late October might be showing signs of weakness."A closely watched report released by the Labor Department on Friday showed employment in the US jumped by much more than anticipated in the month of October.The Labor Department said non-farm payroll employment surged up by 250,000 jobs in October after rising by a downwardly revised 118,000 jobs in September.Economists had expected an increase of about 190,000 jobs compared to the addition of 134,000 jobs originally reported for the previous month.Meanwhile, the report said the unemployment rate in October was unchanged from the previous month at 3.7%, its lowest level since hitting 3.5% in December of 1969.Average hourly employee earnings rose by USD0.05 to USD27.30 in October, reflecting a 3.1% increase compared to the same month a year ago."The October employment report was strong all around, showing no significant disruption from Hurricanes Florence and Michael," said analysts at Oxford Economics."The key development in the October jobs report is the marked acceleration in wage growth," they continued. "Average hourly earnings rose 0.2% month-on-month lifting the annual pace to a ten-year high of 3.1% year-on-year. We had expected the gain and warned our clients 3% wage growth would become the norm.""While we do not believe this is a game-changer for the inflation outlook," Oxford Economics said, "the upside breakout in average hourly earnings above the 3% mark could exacerbate current inflation concerns. We think it is too early to sound the alarm as wage growth is expected to hover around 3% in the next few months."With the value of imports rising by more than the value of exports, the Commerce Department released a report showing the US trade deficit widened more than expected in the month of September.The report said the trade deficit widened to USD54.0 billion in September from a revised USD53.3 billion in August. Economists had expected the trade deficit to widen to USD53.6 billion.The wider than expected trade deficit came as the value of imports jumped by USD3.8 billion or 1.5% to USD266.6 billion in September from USD262.8 billion in August. Notable increases in imports of capital goods and consumer goods more than offset a drop in imports of trucks, buses, and special purpose vehicles.Meanwhile, the value of exports also surged up by USD3.1 billion or 1.5% to USD212.6 billion in September from USD209.4 billion in August.New orders for US manufactured goods increased by more than expected in the month of September, according to a report released by the Commerce Department.The Commerce Department said factory orders climbed by 0.7% in September after spiking by an upwardly revised 2.6% in August.Economists had expected factory orders to rise by 0.5% compared to the 2.3% jump originally reported for the previous month.This economic data came after US President Donald Trump on Thursday said he had a "long and very good" conversation with Chinese President Xi Jinping on trade and North Korea, and that the two planned to meet at the upcoming G-20 summit.In response, Xi said on CCTV state television he hoped China and the US would be able to promote a steady and healthy relationship, and that he was willing to meet with Trump in Argentina on the trade issue.Notably, Trump's softening rhetoric in regards to China comes ahead of US midterm elections which are due to start on Tuesday. The midterms come alongside a meeting of the US Federal Reserve's Open Market Committee which starts on Wednesday. "The results of the US midterm elections in the coming days are likely to be crucial in respect of how the Trump administration conducts fiscal policy over the next two years," said CMC Markets UK's David Madden."Republican successes could well see further expansionary fiscal policy, while setbacks are likely to see policy making much more difficult, and probably see the US dollar fall further.""With respect to the Fed," Madden continued, "one of the reasons cited for last month's stock market sell off has been the rising prospect the Fed is set to continue its aggressive rate hiking sale into 2019.""This week's meeting is unlikely to temper that expectation, given the jump in wages to a nine year high in the October payrolls report, with a December rate rise still pretty much a done deal, with the Fed statement unlikely to be much different to the September meeting."In addition, the Trump administration has announced the reimposition of all US sanctions on Iran that had been lifted under the 2015 nuclear deal.The sanctions, covering Iran's shipping, financial and energy sectors, are the second batch of penalties reimposed since President Donald Trump withdrew from the deal in May.The sanctions that will come into force on Monday penalise countries that do not stop importing Iranian oil and foreign companies that do business with blacklisted Iranian entities, including the central bank, a number of private financial institutions and state-run port and shipping companies. Stocks in New York were lower at the London equities close, with the DJIA down 0.7%, the S&P 500 index 0.9% lower, and the Nasdaq Composite down 1.2%. Oil majors Exxon Mobil and Chevron reported sharp increase in third-quarter profits from last year on strong revenue growth that reflected higher crude oil prices.Exxon Mobil's revenue and adjusted earnings as well as Chevron's earnings beat analysts' expectations, while Chevron's revenues missed their estimates. Exxon Mobil's third-quarter net income was USD6.24 billion, up 57% from USD3.97 billion in the prior-year quarter. Earnings per share rose to USD1.46 from USD0.93 last year. On average, analysts expected earnings of USD1.23 per share. Analysts' estimates typically exclude one-time items.Total revenue and other income rose 25% to USD76.61 billion from USD61.10 billion last year. Analysts were looking for revenue of USD73.55 billion.Exxon Mobil's oil-equivalent production for the quarter declined 2% from last year to 3.79 million oil-equivalent barrels per day.Chevron's third-quarter net income more than doubled to USD4.05 billion, or USD2.11 per share, from USD1.95 billion, or USD1.03 per share, in the prior-year quarter. The Street expected earnings of USD2.06 per share.Total revenue and other income for the quarter rose 21% to USD43.99 billion from USD36.21 billion a year ago, but missed analysts' consensus estimate of USD46.67 billion.On the London Stock Exchange,
Sage Group ended up 3.2% after the accounting software provider promoted Chief Financial Officer Steve Hare to chief executive.Hare - CFO since 2014 - will replace former CEO Stephen Kelly who stood down at the end of August. On the resignation of Kelly, Hare was also handed the additional role of interim chief operating officer.
BAE Systems closed 2.9% higher, as Credit Suisse gave it a ratings boost to Outperform from Neutral.
BT Group ended up 1.3%, returning to the green having been down at midday, after UK communications regulator Ofcom announced plans to provide rival companies with unrestricted access to cable ducts and poles for internet and telephone lines held by the telecommunications giant's subsidiary Openreach.Ofcom's proposals are welcomed by BT as long as it continues to "encourage investment", the company said.Tobacco producers - which often rise during times of market turmoil - were sat at the bottom of the FTSE 100 as positive sentiment creeps back.
Imperial Brands closed down 2.3% and
British American Tobacco also ended down 2.3%.In the FTSE 250,
Millennium & Copthorne Hotels ended down 3.9% as it reported a sharp fall in third quarter profit on "mixed trading", as the hotel manager warned of the sector's "challenging" conditions.For the three months to September 30, Millennium & Copthorne Hotels' pretax profit decreased 38% to GBP34 million from GBP55 million the year before, or by 36% at constant currency.The company's total revenue decreased 3.8% to GBP253 million from GBP263 million, with revenue per available room decreasing 2.8% in the quarter to GBP87.23 from GBP89.75 for the same period a year prior."The hospitality sector is facing challenging trading conditions, including significant supply growth, technological 'disruption', industry consolidation and rising minimum wage requirements and labour costs in key jurisdictions," said Chairman Kwek Leng Beng.
Moneysupermarket.com got a ratings boost, with Liberum raising it to Buy from Hold. The stock closed up 3.8%.
TP ICAP ended up 2.5% as its revenue growth in the four months to the end of October reflected "mixed market conditions", as the intermediary broker acquired American energy & commodities brokerage firm Axiom Commodity Group for USD15 million.TP ICAP's revenue in the period was up 1.1% to GBP568 million from GBP562 million in the same period a year prior. For the year-to-date - January to October - the firm's revenue was marginally lower at GBP1.48 billion.In the four month period to October, TP ICAP said its revenue growth reflects "mixed market conditions".On Monday in the UK corporate calendar are October's traffic statistics from budget airline Ryanair. Later in the week highlights include annual results from Associated British Foods and Imperial Brands on Tuesday, interims from Sophos and Dairy Crest on Wednesday, as well as half-year results from J Sainsbury, Burberry, and National Grid on Thursday.The pound was marginally down against the dollar quoted at USD1.2964 at the London close, compared to USD1.2969 at the London equities close Thursday.Growth in the UK construction sector unexpectedly improved in October on a strong rebound in civil engineering, survey data from IHS Markit showed.The IHS Markit/CIPS UK construction purchasing managers' index, or PMI, rose to 53.2 from 52.1 in September. Economists had expected a score of 52.A PMI reading above 50 suggests growth in activity. The construction sector has grown every month since April, yet the PMI reading remains below its long-term average of 54.3.The euro was lower versus the greenback at USD1.1383, against USD1.1393 late Thursday.The manufacturing Purchasing Managers' Index for the eurozone fell to a 26-month low of 52.0 from 53.2 in September, final data from IHS Markit showed. The flash reading released on October 24 was 52.1. Any reading above 50 indicates expansion in the manufacturing sector.Slower manufacturing growth was recorded across much of the single currency area in October. In Germany, the final PMI reading was 52.2, down from the flash reading 52.3 and from 53.7 in September.In France, the final reading was steady from the flash reading of 51.2 but down from 52.5 in September.Brent oil was lower quoted at USD72.60 a barrel at the London close from USD72.77 late Thursday.Meanwhile, gold was quoted at USD1,231.90 an ounce at the London equities close Friday against USD1,231.81 at the close on Thursday.The data calendar next week has services purchasing managers' indices from China and Japan on Monday, the eurozone and global services PMI on Tuesday, as well as Chinese trade data on Thursday and UK gross domestic product on Friday.
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