ADVFN Morning London Market Report: Friday 5 February 2021

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London open: Stocks tread water ahead of payrolls report

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London stocks were little changed in early trade on Friday, with investors reluctant to make any big bets either way ahead of the latest US non-farm payrolls report.

At 0900 GMT, the FTSE 100 was flat at 6,505.95.

Spreadex analyst Connor Campbell said: “Europe was largely quiet this Friday morning, hesitant to do too much until this afternoon’s US non-farm payroll numbers have been revealed.”

The payrolls report is due at 1330 GMT, along with the unemployment rate and average earnings.

“Analysts are expecting a recovery from December’s 2020-ending contraction in the jobs market, with the addition of 85,000 jobs pencilled in following a strong ADP figure mid-week,” said Campbell. “The unemployment rate, meanwhile, is set to hold steady at 6.7% for the 3rd consecutive month, but with average hourly earnings growth dropping from 0.8% to 0.3% month-on-month.”

In equity marketsBurberry among the top gainers on the FTSE 100 after an upgrade to ‘neutral’ at Goldman Sachs, while Anglo American was boosted by an initiation at buy’ at Berenberg.

Beazley surged after it posted an annual pre-tax loss that was smaller than expected. The Lloyd’s of London insurer swung to a loss of $50.4m in the year to the end of December from a profit of $267.7m a year earlier as it was hit by $340m of losses from the pandemic, but this was better than consensus expectations for a $106.4m loss.

On the downside, Signature Aviation fell after Global Infrastructure Partners teamed up with rival bidders Blackstone and Microsoft founder Bill Gates to make a $4.73bn (£3.43bn) bid the company.

Specialty chemicals company Johnson Matthey was weaker after being cut to ‘underweight’ at Barclays.

Outside the FTSE 350, French Connection shares jumped more than 30% after the clothing retailer said it was in talks with two potential suitors.

 

Top 10 FTSE 100 Risers

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# Name Change Pct Change Cur Price
1 Micro Focus International Plc +4.30% +19.60 475.70
2 Lloyds Banking Group Plc +3.66% +1.32 37.43
3 Easyjet Plc +3.04% +24.20 821.00
4 Barratt Developments Plc +2.99% +20.60 710.00
5 Carnival Plc +2.79% +37.00 1,363.50
6 Whitbread Plc +2.72% +85.00 3,205.00
7 Burberry Group Plc +2.50% +43.00 1,761.50
8 Compass Group Plc +2.38% +33.50 1,443.00
9 Intercontinental Hotels Group Plc +2.35% +117.00 5,102.00
10 Centrica Plc +2.18% +1.12 52.56

 

Top 10 FTSE 100 Fallers

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# Name Change Pct Change Cur Price
1 Johnson Matthey Plc -3.86% -116.00 2,893.00
2 Pearson Plc -3.01% -22.20 714.80
3 Aviva Plc -1.86% -6.50 343.30
4 United Utilities Group Plc -1.53% -14.00 899.00
5 Kingfisher Plc -1.46% -4.20 282.60
6 Vodafone Group Plc -1.46% -1.98 133.84
7 Unilever Plc -1.16% -47.00 4,020.00
8 Smith (ds) Plc -1.13% -4.30 376.00
9 Bae Systems Plc -1.07% -5.10 472.40
10 Relx Plc -0.91% -17.00 1,841.00

 

Europe open: Shares open higher in muted trade

European stocks opened higher on Friday following gains on Wall Street overnight, although shares in Britain and Germany were off the pace on Covid concerns and weak economic data respectively.

The STOXX 600 gained 0.4%% and was on track for a 3.8% rise over the last five days.

Germany’s DAX index was flat after data showed orders for German-made goods fell more than expected in December, as restrictions to contain the Covid-19 pandemic dragged down demand from other euro zone countries.

London’s FTSE 100 was in similar territory as investors digested reports the government was once again behind the curve on Covid policy and scrambling to secure hotel rooms ahead of a delayed announcement on quarantines.

France’s CAC 40 gained as President Emmanuel Macron stated that a lockdown in France would be the ‘last resort’, despite the spread of new variants of covid-19 in the country.

Investors were also awaiting the US payrolls report later on Froday, along with the unemployment rate and average earnings.

“Analysts are expecting a recovery from December’s 2020-ending contraction in the jobs market, with the addition of 85,000 jobs pencilled in following a strong ADP figure mid-week,” said Campbell. “The unemployment rate, meanwhile, is set to hold steady at 6.7% for the 3rd consecutive month, but with average hourly earnings growth dropping from 0.8% to 0.3% month-on-month,” said Spreadex analyst Connor Campbell.

In equity news, shares in Beazley surged after it posted an annual pre-tax loss that was smaller than expected. The Lloyd’s of London insurer swung to a loss of $50.4m in the year to the end of December from a profit of $267.7m a year earlier as it was hit by $340m of losses from the pandemic, but this was better than consensus expectations for a $106.4m loss.

On the downside, Signature Aviation fell after Global Infrastructure Partners teamed up with rival bidders Blackstone and Microsoft founder Bill Gates to make a $4.73bn (£3.43bn) bid the company.

Sanofi gained 2.6% as the French drugmaker said it aimed to grow earnings per share this year after posting stronger-than-expected quarterly results.

BNP Paribas fell as charges linked to the pandemic ate into the lender’s net profit in the fourth quarter.

(Michele Maatouk also contributed to this story)

 

US close: Stocks finish firmer as investors digest more earnings reports

Wall Street stocks closed in positive territory on Thursday, following another round of corporate earnings and a slightly better-than-expected jobless claims report.

At the close, the Dow Jones Industrial Average was up 1.08% at 31.055.86 and the S&P 500 was ahead 1.09% at 3,871.74, while the Nasdaq Composite rose 1.23% to 13,777.74.

The Dow closed 332.26 points higher on Thursday, extending the modest gains recorded in the previous session.

In focus was news that the Democrats would move ahead with president Joe Biden’s $1.9trn Covid-19 relief proposal, rebuffing a Republican counter-offer for a more modest $618bn package, which would include new stimulus checks of $1,000 per person.

On the macro front, planned job cuts by US companies increased 3.3% month-on-month to 79,552 in January, according to Challenger, Gray & Christmas.

The outplacement and business and executive coaching firm did note, however, a levelling off of announcements, which it said could bode well for recovery over the coming months.

Elsewhere, US jobless claims continued to drop over the week ended 30 January, hitting a nine-week low, albeit while remaining at exceedingly elevated levels.

The Department of Labor reported a 33,000 drop for initial unemployment claims during the week ending on 30 January to reach 779,000.

Economists had pencilled-in a print of 825,000.

Lastly, new orders for US factory goods rose 1.1% to $493.5bn in December, according to the Census Bureau.

In equities, eBay shares were 5.31% higher after the ecommerce giant posted earnings that beat on both the top and bottom lines overnight.

Its former subsidiary PayPal was also in the green, rising 7.36% on the back of some better-than-expected quarterly figures.

Bristol-Myers Squibb was down 0.76% after it posted a fourth-quarter loss of $4.45 per share despite a 39% boost to revenues.

Sector peer Merck & Co was down 1.76% after it posted a quarterly loss of $2.09bn.

Cigarette peddler Phillip Morris was 4.14% firmer after it beat on both earnings and revenues, while Hershey’s was boosted by strong organic growth in its fourth quarter.

 

Friday newspaper round-up: Johnson & Johnson, home workers, London population

Johnson & Johnson has asked US regulators to approve the world’s first single-dose Covid-19 vaccine, an easier-to-use option that could boost scarce supplies. The drugmaker’s application to the US Food and Drug Administration (FDA) follows its 29 January report in which it said the vaccine had a 66% rate of preventing infections in its large global trial. – Guardian

Employees who work from home are spending longer at their desks and facing a bigger workload than before the Covid pandemic hit, two sets of research have suggested. The average length of time an employee working from home in the UK, Austria, Canada and the US is logged on at their computer has increased by more than two hours a day since the coronavirus crisis, according to data from the business support company NordVPN Teams. – Guardian

Directors could be hit with bans or big fines for errors in their companies’ accounts under government proposals to shake up the UK’s audit industry. The proposals to make directors personally liable for the accuracy of financial statements are expected to be included in a government consultation to be published in the coming weeks. It follows three independent reviews and growing calls for an overhaul after a string of financial scandals at the likes of Patisserie Valerie and Carillion. – Telegraph

Even when the last Covid restrictions are lifted from London, there may be a little less bustle on its streets and elbow-jostling at its drinking dens. One startling estimate that has caught the eye of economists warned the capital’s population may have plunged by 700,000 during the pandemic. That would equate to an 8pc drop and be the first slump in London’s population in more than 30 years. – Telegraph

A shopping centre in Coventry that eight years ago was valued at £37 million was sold this week for only £4.9 million, setting alarm bells ringing among lenders, landlords and local authorities nationwide. West Orchards’ importance as the city’s primary shopping destination cannot be underestimated – “It’s almost our Galeries Lafayette,” Trish Willetts, director of Coventry’s business improvement district, said, comparing it with the landmark Paris department store – but now interest in the centre is spreading far beyond the West Midlands and what, from May 1, will be the UK’s “City of Culture”. – The Times

 

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