LONDON MARKET MIDDAY: Stocks higher; Wall Street set for more earnings

(Alliance News) - Stock prices in London were higher at midday on Monday, despite a US jobs report last week that ramped up expectations of an interest rate hike.

The US non-farm payrolls report on Friday saw the Labor Department sharply revise up the previous three months' readings, while also revealing a surge in wage growth.

The FTSE 100 index was up 21.84 points, or 0.2%, at 7,538.24. The mid-cap FTSE 250 index was up 75.77 points, or 0.4%, at 21,787.81. The AIM All-Share index was down 0.48 of a point at 1,085.53.

The Cboe UK 100 index was up 0.4% at 748.41. The Cboe 250 also was up 0.1% at 19,449.76, and the Cboe Small Companies was 0.2% higher at 15,352.12.

The London market was slightly outperforming. The CAC 40 stock index in Paris was down 0.3% and the DAX 40 in Frankfurt was 0.2% lower.

"European equity markets kicked off the new week with a mixed performance," said AJ Bell's Russ Mould. "There are plenty of reasons for investors to be cautious. Strong US jobs data last week might suggest the Fed pushes up rates faster and harder than currently expected. Ongoing tensions between Ukraine and Moscow also hang over markets like clouds waiting to unleash a fury of rain."

In the FTSE 100, Rightmove was the best performer, up 2.3% after UBS raised the property portal to 'buy from 'neutral'. The Swiss bank said Rightmove has the ability to exceed market growth expectations and also the quality of its earnings is better than that of peers in the online classified ad sector.

Prudential was up 1.7% after JPMorgan restarted coverage on the insurer at 'overweight'.

Phoenix Group was up 1.5% after Berenberg upgraded the insurer to 'buy' from 'hold'.

Scottish Mortgage Investment Trust was up 1.3%, tracking a rebound in US tech stocks that it holds, such as Amazon.

The e-commerce company closed up 14% on Friday after it reported strong fourth-quarter earnings. Amazon was up 0.2% in pre-market trade in New York on Monday. The trust holds a 2.4% stake in Amazon.

Elsewhere, Lamprell was down 9.5% after the oil field services predicted a reduction in full-year profit, as its operational productivity slowed and supply chain issues increased costs.

Preliminary figures showed that revenue rose 15% to USD389 million in 2021 from USD260.4 million a year ago, but the company noted that profitability took a hit due to Covid-related costs.

"Lamprell has been successful in managing pandemic-related disruption effectively, although incremental costs due to reduced productivity and rephasing of work have impacted the group's profitability in 2021," it said.

Brent oil was retreating from seven-year highs, quoted at USD92.56 a barrel on Monday at midday in London, down from USD93.35 late Friday.

The pound was quoted at USD1.3507, down from USD1.3535 at the London equities close Friday.

UK Prime Minister Boris Johnson is expected to make further changes to his Downing Street operation as he tries to maintain his grip on power.

Johnson made new appointments over the weekend, with Chancellor of the Duchy of Lancaster Steve Barclay becoming his chief of staff and journalist and former aide Guto Harri returning as his head of communications.

The Times reported No 10 was hoping to announce the return of Emily Lawson as the new permanent secretary this week. Lawson, who currently runs NHS England's vaccination programme, was seconded to Downing Street's delivery unit - a team in charge of ensuring the government delivers on its policies - in April last year before returning to the health service in October.

Senior backbencher Tom Tugendhat, a potential leadership candidate if Johnson is forced out, said the prime minister's future depends on how the "reset" goes.

The euro was priced at USD1.1433, down from USD1.1443 late Friday. Against the Japanese yen, the dollar was trading at JPY114.95, lower against JPY115.25.

Gold stood at USD1,812.53 an ounce, higher against USD1,804.75 late Friday.

New York was pointed mostly lower as earnings season continues. The Dow Jones Industrial Average was called down 0.2% and the S&P 500 down 0.1%, but the Nasdaq Composite was pointed up 1.3%, based on futures trading. The indices had closed down 0.1%, up 0.5% and up 1.6% respectively on Friday.

Shares in at-home fitness equipment company Peloton Interactive were up 26% in pre-market trade Monday, amid reports of takeover interest from Amazon and sports apparel firm Nike.

Several US media reported on Amazon's interest in Peloton, which has struggled to maintain growth amid easing Covid-19 restrictions.

"Amazon has been speaking to advisers about a potential deal," the Wall Street Journal reported Friday, citing sources. The newspaper added, however that "there's no guarantee the e-commerce giant will follow through with an offer or that Peloton, which is working with its own advisers, would be receptive."

Separately, the Financial Times reported that Nike also is evaluating a bid for Peloton, citing people briefed on the matter. Neither Amazon nor Nike have held talks with Peloton, the FT sources said. Nike was up 0.5% early Monday.

In the US earnings calendar, Dow member Amgen will report fourth-quarter earnings after the market close in New York on Monday.

Ahead this week, drugmaker Pfizer issues fourth-quarter earnings on Tuesday and entertainment company Walt Disney posts first-quarter numbers on Wednesday. Social media platform Twitter delivers fourth-quarter results on Thursday.

By Arvind Bhunjun; arvindbhunjun@alliancenews.com

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