LONDON BRIEFING: Stocks to open flat pre-Fed minutes, jobs data

(Alliance News) - The FTSE 100 is expected to open flat on Wednesday, as London's flagship index celebrates its 40th anniversary, after mostly downbeat trading in Asia and a tech sell-off in New York.

This is also ahead of two key data releases in the US later, particularly the latest meeting minutes from the US Federal Reserve this evening, which will provide investors insight into the central bank's thinking on the future of US interest rates.

Prior to this, the Institute of Supply Management's manufacturing PMI for the US is released in the afternoon.

"Markets turned cautious ahead of today's [Federal Open Market Committee] minutes, US JOLT's job openings number, and the ISM manufacturing index. Markets have rallied over the past few weeks, and the dollar has come under considerable pressure as markets price in six rate cuts by the Fed this year," said TreasuryOne analyst Andre Cilliers.

"The Fed is only forecasting three cuts at this stage, and we saw some short dollar covering yesterday while bonds and equities were sold off."

In UK corporate news, both Wizz Air and Ryanair reported increased passenger numbers in December and across 2023.

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 1.0 point at 7,720.52

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Hang Seng: down 1.4% at 7,523.20

Nikkei 225: financial markets in Japan closed for New Year holiday

S&P/ASX 200: closed down 1.4% at 7,523.20

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DJIA: closed up 25.50 points, or 0.1%, at 37,715.04

S&P 500: closed down 27.00 points, or 0.6%, at 4,742.83

Nasdaq Composite: closed down 245.41 points, or 1.6%, to 14,765.94

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EUR: up at USD1.0959 (USD1.0955)

GBP: up at USD1.2635 (USD1.2620)

USD: up at JPY142.34 (JPY141.74)

Gold: down at USD2,062.16 per ounce (USD2,064.66)

(Brent): down at USD75.81 a barrel USD77.75)

(changes since previous London equities close)

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ECONOMICS

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Wednesday's key economic events still to come:

09:55 CET Germany unemployment

10:00 EST US ISM manufacturing PMI

14:00 EST US Federal Reserve meeting minutes

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The Israeli army has said it is "prepared for any scenario" after a strike in Beirut that killed Hamas's deputy chief, stoking fears the war in the Gaza Strip could boil over into wider regional conflict. Israeli army spokesperson Daniel Hagari did not directly comment on the killing, but said afterwards that the military was in "very high state of readiness in all arenas, in defence and offence. We are highly prepared for any scenario." Israel has previously announced the deaths in Gaza of Hamas commanders and officials during the war, but Aruri is the most high-profile figure to be killed, and his death came in the first strike on the Lebanese capital since hostilities began.

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BROKER RATING CHANGES

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Jefferies cuts AstraZeneca to 'hold' (buy) - price target 11,000 (12,500) pence

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Jefferies raises GSK to 'buy' (hold) - price target 1,900 (1,550) pence

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COMPANIES - FTSE 250

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Wizz Air said it carried 5.0 million passengers in December, up 19% from a year earlier, at a load factor of 82% from 85%. Across 2023, it carried 60.3 million passengers, up 32% from 45.7 million in 2022, at a load factor of 91% from 87%. Capacity in December rose 22% to 6.0 million passengers from 5.0 million a year earlier, while across 2023, capacity rose 26% to 66.4 million from 52.7 million. The airline said it continued to grow its network and improve its customer offering in December, including Wizz Air Abu-Dhabi doubling the number of flights to 15,000 and carrying more than three million passengers.

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OTHER COMPANIES

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Budget airline Ryanair said it carried 12.5 million passengers in December, up 8.7% from 11.5 million passengers a year earlier, at a load factor of 91% from 92%. It said it operated over 72,500 flights in December, while over 900 flights were cancelled due to the Israel/Gaza conflict. Across 2023, it carried 181.8 million passengers, up 13% from 160.4 million in 2022, at a load factor of 94% from 92%.

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Drug discovery company C4X Discovery said it has received a milestone payment of USD11 million from FTSE 100-listed pharmaceutical firm AstraZeneca, triggered by pre-clinical progress of C4X Discovery's NFT2 Activator programme. AstraZeneca is developing C4X Discovery's former programme to deliver an oral therapy for the treatment of inflammatory and respiratory diseases, with a lead focus on chronic respiratory disease. As announced under the terms of the licencing agreement in November 2022, C4X Discovery received an initial USD2 million upfront payment from AstraZeneca and is potentially entitled to receive up to USD400 million in preclinical, clinical development and commercial milestones, as well as tiered mid-single digit royalties on future sales. C4X Discovery Clive Dix commented: "This significant preclinical milestone payment marks the progress AstraZeneca has made in driving the NRF2 Activator programme forward. NRF2 is a challenging target and this achievement provides further validation of our ability to generate differentiated, quality molecules in immuno-inflammation."

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Chill Brands unveiled product launch plans and regulatory initiatives for the first quarter of 2024. As previously announced, the CBD products company received a number of material purchase orders during the fourth quarter of 2023. It is now in the process of fulfilling those purchase orders and expects to have delivered all initial inventory during January 2024. Chill ZERO nicotine-free vape products will launch into initial WH Smith travel locations, Morrisons stores, and roadside retail stores operating on Shell, BP and Esso branded forecourts during January 2024 with the rollout continuing incrementally throughout the first quarter. Chill Brands said it will also take steps to address regulatory concerns on balancing the "positive impact of vaping as a harm reduction tool with the need to protect children and the environment". It plans to do this by participating in a recycling scheme, to focus on "appropriate merchandising and age verification to ensure express compliance with existing and future regulations at all points of the supply chain", and to use more "conscious" design and flavour choices that indicate its products are "solely intended for adult consumers".

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By Greg Rosenvinge, Alliance News senior reporter

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