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  • FTSE 100 closes down 10 points
  • Restaurant Group drags FTSE 250 lower after broker downgrade
  • US shares mixed

5pm: FTSE closes lower

FTSE 100 index closed in the red on the day and over the week, while US stocks were lacklustre on the final day of the trading week following the jobs report.

Britain’s blue-chip benchmark closed down around ten points at 7,587. On the week as a whole, the top share index lost around 0.45%.

The US created 145,000 jobs last month as hiring slowed and wages eased as the hourly wage growth fell below 3% in December for the first time in over a year.

“The jobs report was nothing to get excited about and that has been reflected in the movement in the equity markets,” said analyst David Madden, at CMC Markets.

“The employment update was neither great nor terrible, it was somewhere in between. There were some positive aspects and pockets of disappointment. As far the US economy is concerned, it is not a game changer.”

On wider geopolitics, the analyst noted that: “..we are a couple of days on the de-escalation of US-Iran tensions and as far as traders are concerned, the situation is under wraps. On a political note, the issue is still difficult, but while the prospect of a war seems very low, dealers are likely to remain upbeat.”

The Dow Jones fell 81 points to 28, 874, while the S&P 500 is near flat at 3,275, up around one point.

3.20pm: Quiet end to a quiet day

Somewhat sheepishly, the Footsie has crept back into positive territory; not by much but at least it is faring better than the FTSE 250.

The FTSE 100 was up 5 points (0.1%) at 7,603 while the FTSE 250 was down 36 points (0.2%) at 26,607.

Leading the mid-cap FTSE 250 lower was Restaurant Group PLC (LON:RTN), which was down 5.9% at 151.7p after RBC Capital Markets downgraded the stock to “sector perform” from “outperform”.

The trading statement from B&M European Value Retail (LON:BME) did not go down well with the market, and the shares were the second-worst mid-cap performers after Restaurant Group.

The company saw its shares shed 5.4% at 375.75p after it said sales growth was slower than anticipated in the run-up to Christmas amid a challenging market and its decision not to further discount its products before Boxing Day.

2.50pm: US and UK indices becalmed

On both sides of the pond, the major indices are little changed.

In the UK, the FTSE 100 was down 3 points at 7,595 while in the US, the Dow Jones was down 12 points at 28,946 while the S&P 500 was up 1 point at 3,276.

It seems traders on both sides of the Atlantic did not quite know what to make of the US non-farm payrolls and earnings data.

“Stocks were unperturbed as the slightly softer than expected jobs data and weaker wage data confirmed the Fed’s stance that the economy is still ‘in a good place’ and that we will likely continue to see a low interest rate environment in 2020,” said Edward Moya of Oanda.

Ulas Akincilar, the head of trading at the online trading platform, INFINOX, reckons wages are the worry.

“Few will lose sleep over the fact that the headline jobs number fell short of expectations.

“A miss is a miss, and the downward revisions to November and October’s figures are disappointing but at this stage of the economic cycle, the US is still enjoying an impressively strong pace of job growth,” he said.

“Of greater concern is the slowing pace of wage growth – which slipped to 2.9% in 2019 as a whole – and could steadily become a brake on the wider US economy.

“With inflationary pressure now ebbing fast, the Fed has no need to hike interest rates – meaning the monetary policy doves will continue to rule the roost in the first half of 2020.

“The net effect of these two factors – slowing wage growth and a status quo on interest rates – will be to simultaneously irk President Trump and throw a bucket of cold water on the Dollar. The Greenback quickly responded by sliding off its earlier highs against both the Euro and sterling,” he added.

2.35pm: US markets catch lethargy bug from the UK

The FTSE 100 has clawed its way back close to last night’s level – although the term “clawed” might imply a bit too much enthusiasm.

London’s index of leading shares, which advanced to 7,632 in early trading, has spent much of the day trading between 7,600 and 7,590 and is currently at 7,598, practically unchanged on the day.

In the US, the Dow Jones industrial average eked out a 2 point gain at 28,959 in the wake of underwhelming US jobs data for November.

“In one line: Meh,” was the response to the jobs figures of Ian Shepherdson, the chief economist at Pantheon Macroeconomics.

“December payrolls rose 145K, a bit below the consensus, 160K. The net revision was a modest -14K. Unemployment was unchanged at 3.5%, as expected, but hourly earnings rose only 0.1%, below the 0.3% consensus,” Shepherdson reported.

“Compared to November, employment growth swung down by just over 50K in both goods and services, but the goods numbers are distorted by November’s return of striking GM [General Motors] workers. Still, manufacturing lost 12K jobs in December, after a 12K increase – ex-returning GM workers – in November. The trend is running close to zero. Construction, however, did much better, with the 20K increase – the best since April – likely driven by rising housing construction; we expect strong gains to continue,” he added.

2.05pm: Traders shrug shoulders as US jobs data underwhelms

The December US jobs report was a bit of a non-event, although this always seemed likely after a particularly strong increase in jobs in November.

Analysts at FXStreet in response to the non-farm payrolls (NFP) report observed that “the release of the once market-shaking NFP report ends without a fuss”.

“The numbers missed the market’s expectations, but weren’t heartbreaking, nor a reason for the Federal Reserve to change its monetary policy, the only reason the market could move beyond political sentiment-related headlines.

“The initial moves were mostly erased, and if the dollar sheds some additional ground, it would be because of some profit-taking ahead of the weekend, rather than anything else,” the forex trading platform added.

Sterling was little changed after the release of the jobs data, trading at US$1.3070, up 0.04 cents.

The US dollar index, which is a trade-weighted measurement of the dollar’s value, was down 0.02% at 90.35. US Treasury yields ebbed a bit following the release of the economic indicators.

In the UK, it seems like the weekend has started already, with the FTSE index stubbornly sticking close to the 5,590 level, down 8 points.

NMC Health PLC (LON:NMC) was doing its bit to pump a bit of life into the benchmark index. The shares, the subject of a bear raid by hedge fund Muddy Waters, were up 5.3% at 1,407.5p.

In contrast, DIY retailer Kingfisher plc (LON:KGF) remained the worst-performing blue-chip, as it has been for most of the day, shedding 3.1% at 210.8p.

1.50pm: US stock index futures hardening a little

If investors were disappointed with the US non-farms payroll data, they are hiding it well.

According to the UK’s leading spread betting site, the Dow Jones is now expected to open at around 28,985, which is a bit higher than what the punters were expecting a few minutes earlier.

The S&P 500 is now expected to open at around 3,281, which would be up 6 points on last night’s close.

“Decelerating hiring and wage growth shouldn’t be a cause for concern in the context of the encouragingly tight US labour market. Unemployment is low, and wage growth remains healthily above inflation – this puts more money into consumers’ pockets and supports economic growth,” commented Robert Alster, the head of investment services at Close Brothers Asset Management.

“Trump will be relying on strong economic performance as his re-election campaign gets underway. Marginal US oil production has reduced global price volatility, but there remains a risk that further tension in the Middle East will disrupt supply, causing inflation. Separately, Q3 productivity delivered the biggest fall in nearly four years; if this continues, it may provide an unwelcome headwind to growth,” he added.

UK traders, having waited all day for the US jobs data to provide some information on which to trade greeted the release with supreme indifference. The FTSE 100 was down 9 points at 7,589, more or less where it has been for a couple of hours now.

1.45pm: US indices tipped to open on the front foot

US indices were expected to open modestly higher, despite a slightly disappointing non-farm payrolls figure.

Spread betting quotes suggest the Dow Jones, which surged more than 200 points yesterday, will open around 21 points higher at 28,978. The broader-based S&P 500 is seen opening at around 3,279, up 4 points.

In the UK, the FTSE 100 remained in the doldrums, down 6 points, or 0.1% at 7,591.

1.31pm: US non-farm payrolls additions come in below expectations

The US economy added 145,000 jobs in December, a bit below the consensus forecast for 164,000 additions, and down from the 256,000 additions in November.

The unemployment rate remained at 3.5%.

Annual wage growth slipped to 2.9% from 3.1% in the previous month. Average hourly pay rose 3 cents in to US$28.32.

1.00pm: Footsie softens slightly as US jobs report looms

With the release of the US jobs report just minutes away, the FTSE 100 was edging lower.

The FTSE 100 was down 9 points at 7,589.

“The consensus estimate is that 164,000 jobs were added last month, which would be a decent number, but keep in mind that 266,000 jobs were added in November. The unemployment rate is at a joint 50-year low of 3.5%, and it is tipped to hold steady. Average earnings are expected to remain at 3.1%,” said CMC’s David Madden.

“It is clear the US labour market is in rude health, so the wages component will be of extra importance as realistically, the jobless rate is unlikely to fall much more without a rise in the earnings reading. If companies are struggling to fill vacancies they might have to offer higher wages to attract potential workers. A solid earnings reading should bode well for the economy as people who earn more tend to spend more – which drives the economy along,” he added.

Wage growth is expected to have hit 0.3% in December.

11.20am: Stock market makes the world staring championship seem action packed

Volatility remains low, with traders sitting on their hands ahead of the US non-farm payrolls release this afternoon.

The FTSE 100 was just about keeping its head above 7,600 at 7,601, up 3 points.

Housebuilders are wanted this morning but Barratt Developments PLC (LON:BDEV) less so after Citi downgraded the stock to ‘neutral’ from ‘buy’. Barratt shares were up 0.2%.

Outside of the FTSE 350, Joules, which describes itself as “the premium British lifestyle brand”, lost almost a quarter of its value after a poor Christmas trading season.

“Joules’s run of luck has come to an end. Posh wellies may be a niche market after all,” was the acerbic verdict of markets.com’s Neil Wilson.

“A weak online sales performance was to blame, which management explains was ‘due to an internally generated stock availability issue through the important end of season sale event, the cause of which has now been addressed’. In other words, they mess up on stock just like Marks & Spencer did. Too many posh wellies? Too many polo shirts? Who can say, but shares seen at least -10%,” he noted.

10.15am: Footsie crawls back above 7,600

Tumble-weed continued to blow across dealing rooms in the City as traders wait for this afternoon’s US jobs data.

At 7,602, up 4 points (0.0%), the FTSE 100 has at least managed to move back above 7,600 despite being weighed down by weak banking stocks, particularly Lloyds Banking Group PLC (LON:LLOY) and Royal Bank of Scotland Group PLC (LON:RBS), the two operators expected to be hardest hits by new regulations on easy-access savings accounts. Both stocks were down 2.0%.

Packaging giant Mondi PLC (LON:MNDI) fell 2.4% to 1,671p after it parted company with its chief executive officer, Peter Oswald.

Irish airline Ryanair Holdings plc (LON:RYA) gave a lift to a sector already breathing a sigh of relief at the softer oil price, as it raised

full-year profit after tax guidance.

The shares were up 7.8% at €16.41.

“Investors’ attention will always be grabbed by a big number and Ryanair has duly delivered, raising the upper end of its full year profit guidance above the €1 billion mark,” commented AJ Bell’s Russ Mould.

“Despite the uncertainty created by Brexit and mounting concerns about the environmental impact of flying, it seems plenty of people fancied jetting away over Christmas and the New Year,” he noted.

9.20am: Back to a holding pattern as traders wait for US jobs data

After opening higher as expected, the FTSE 100 has returned to base camp as traders wait for this afternoon’s market-moving US jobs data.

The FTSE 100 was down 3 points (0.0%) at 7,595, despite strong upward movements for airline stocks as investors reacted to a slight weakening of the oil price as Middle East tensions simmer down.

“Oil prices were already in an uptrend prior to the recent events, supported by OPEC+ cuts in early December and an overall positive macro-environment with a strong performance by equities. After reports of the killing of Iranian Major General Qasem Soleimani first emerged last week, Brent Crude Oil rallied past $70/bbl before retreating just below those levels as a response from Iran was expected. $70+ levels were then tested again after reports of Iranian missile strikes in Iraq,” observed Mayank Joshi at Chatham Financial, a financial advisor.

“Both these rallies were fairly short-lived, and prices have now started retreating after a more measured response from Trump in his address yesterday. Interestingly at the time of writing, Brent is trading just over $65/bbl and is lower than where we were before the Soleimani incident,” he added.

Low-cost operator easyJet PLC (LON:EZJ), up 4.0%, just beat out British Airways owner International Consolidated Airlines (LON:IAG), up 3.9%, for the top spot on the Footsie greasy pole.

Package tour operator TUI AG (LON:TUI) was the fourth-best performer, with a 2.5% increase.

Given that a commercial airliner has recently been downed – apparently by a rogue Iranian missile – the airline sector is showing remarkable resilience.

The stream of Christmas trading updates from retailers continues, with JD Sports Fashion PLC (LON:JD.) finding the market hard to please this morning.

The shares were down 2.4% at 808p after it declined to provide hard numbers in its trading update.

“There has been no trading update from JD Sports since its interims on Sept 10th, but after impressive growth of over 10% in core UK sales in the first half, the message at the time was that “we are pleased by the continued positive trends to date in the second half in Sports Fashion”. Now,

“Today’s update talk[s] about ‘positive’ growth, but there are no figures and all JD Sports really say is that Overseas has done well enough for the group to be on track to hit full-year PBT [profit before tax] ‘in the upper quartile’ of the £403mln-433mln range. This is reassuring, but for a FTSE 100 company we would have expected a better level of information,” griped Nick Bubb, the independent retail analyst.

8.30am: Friday firmness

The FTSE 100 index pushed higher in early trade on Friday as, with traders decompressing from heightened geopolitical worries sparked by America’s assassination of Iran’s military leader earlier this week, the market looked to be headed for a mellower run into the weekend.

The index of UK blue-chips opened 24 points higher at 7,622.83 

In the US, Apple shares hit a new high after updating on its performance, while Wall Street enjoyed another record session Thursday with the Dow Jones Industrial Average closing in on nose-bleed territory at 29,000.

Whether it gets there or not on Friday will depend on the latest US jobs figures, known as non-farm payrolls.

“Remember last month a blowout jobs number sent equities higher along with the US dollar and Treasury yields, as it suggested the US economy was doing better than many corners of the market feared,” said Neil Wilson at Markets.com.

With Brent Crude Oil well below its week high of US$70, the airlines, whose major ‘swing’ costs relate fuelling their jets, were back in demand. easyJet (LON:EZJ) climbed 7% in early deals, while British Airways owner IAG (LON:IAG) wasn’t far behind with a 5% spurt.

Antibodies specialist Abcam (LON:ABC), which valued at £2bn is one of AIM’s largest companies, slid 6% after it tempered its growth expectations for the year.

Proactive news headlines:

Frontier IP Group PLC’s (LON:FIPP) portfolio company, Exscientia has signed a collaboration deal worth up to £203mln (€240mln) with German pharmaceutical giant Bayer focused on oncology and cardiovascular disease. Under the terms of the deal, Exscientia will initially work on three projects focused on accelerating the discovery of small molecule drugs using its Centaur Chemist platform, which uses artificial intelligence to identify new drugs.

Pembridge Resources Plc (LON:PERE) told investors it has received its third payment under its offtake agreement with Sumitomo. The latest payment, US$5.4mln, follows the first and second Sumitomo payments which came in November and December respectively.

MTI Wireless Edge Limited (LON:MWE) has secured an additional order to an existing contract, worth around US$0.6mln. The contract is for the manufacture of military aerials and follows on from a US$1mln order received in March 2019, worth US$1mln, that was to be delivered over 40 months; the additional order announced today is to be delivered within the next 12 months.

Tharisa PLC (LON:THS) chief executive Phoevos Pouroulis described a “solid operational performance” as the company reported on the three months ended 31 December 2019. The Cypriot firm with mining assets in South Africa, in a statement, told investors that it mined 1,143 tonnes of ore and milled 1,247 tonnes during the quarter.

Mkango Resources Ltd (LON:MKA) (CVE:MKA) confirmed it has bought a stake in a company that has developed a technology to recycle rare earth magnets. Its subsidiary Maginito has taken a 25% stake in HyProMag for £300,000 and has an option to take this up to 49% for a further £1mln. Maginito has developed a patented method for extracting and demagnetising neodymium iron boron alloy powders from magnets embedded in scrap and redundant equipment.

European Metals Holdings Limited (LON:EMH) (ASX:EMH) has raised £350,000 via a share placing at 15.25p a share. In total, 2.3mln shares were placed with new and existing UK investors. The company said the funds would be used to further the development of the Cinovec project, the lithium asset in the Czech Republic.

6.30am: Footsie called higher 

Ahead of the release of the December US jobs report this afternoon, the FTSE 100 index looks set to continue yesterday’s positive mood.

Spread betting quotes indicate that the blue-chip index, which yesterday added 23 points to close at 7,598, will open 29 points higher at 7,627.

“In today’s December US employment report, we can expect to see a softening to 162k [from November’s 266k]; however, given the strength seen in the employment component of this week’s ISM non-manufacturing report, there is a chance that this estimate may well be on the low side. We should also look for any possible downward revisions to the November number, which was surprisingly stronger than expected,” advised CMC’s Michael Hewson.

Sterling took a bit of a biffing yesterday after Bank of England governor Mark Carney suggested that the central bank might have to rummage around in the largely empty cupboard of stimuli if the hoped-for post-Brexit bounce does not occur. Today, the pound is recouping some of those losses, which is likely to put a lid on Footsie’s gains.

Over in the US, President Trump is once again claiming the credit for US indices being at or near all-time highs.

The Dow surged 212 points yesterday to 28,957 while the S&P 500 jumped 22 points to 3,275.

In Asian markets this morning, the mood was also mostly upbeat with Tokyo’s Nikkei 225 up 95 points to the good at 23,835 and Hong Kong’s Hang Seng 36 points firmer at 28,597.

Turning to the UK corporate news calendar, it would largely be a dead period were it not for the post-Christmas trading updates from retailers.

JD Sports Fashion PLC (LON:JD.), the ‘athleisure’ (ugh!) retailer is seen by analysts as one of the winners in the changing UK clothing retail market, with its September interims beating market expectations with a 10% increase in like-for-like sales in the UK and a 7% rise in pre-tax profits.

The bar is set high for Christmas, although some say profit margins could have been squeezed by pre-Boxing Day sales.

Elsewhere on the high street, B&M European Value Retail SA (LON:BME) will also issue a third-quarter update on Friday.

Analysts at Peel Hunt think it will reflect a decent quarter for B&M, albeit up against easy comparatives, with like-for-like sales growth to remain around the 3% mark seen for the second half.

Significant announcements expected on Friday:

Trading announcements: JD Sports Fashion PLC (LON:JD.), B&M European Value Retail (LON:BME)

Economic data: US non-farm payrolls

Around the markets:

  • Gold: US$1.549 an ounce, down US$5.30
  • Brent crude: US$65.31 a barrel, down 6 cents
  • Sterling: US$1.3088, up 0.22 cents
  • 10-year gilt: yielding 0.823%, up 0.04 basis points
  • Bitcoin: US$7,734, down US$55

City headlines:

  • Financial Times

  • Western intelligence officials believe a passenger aircraft that crashed in Iran killing 176 people was mistakenly downed by an Iranian anti-aircraft missile.
  • After 15 years as the boss of British Airways owner IAG, Willie Walsh is stepping downward
  • The Times

  • John Lewis boss Paula Nicklods made a shock exit after the department store reported disappointing festive trading and cautioned that profits at the department store would be substantially lower this year.
  • Mitchells & Butlers posted like-for-like sales growth of 5.6% over the three-week festive period on strong demand for pub meals and drinks on key days including Christmas Day and New Year’s Eve drove.
  • Card Factory has sounded a profit alert and warned that it does not expect to pay a special dividend next year after enduring tough Christmas trading.
  • Recruitment firm Robert Walters suffered a slump in profit due to an end-of-year bout of Brexit uncertainty and disruptions caused by last month’s general election.
  • SIG, a provider of roofing materials and building insulation, issued its second profit warning in three months, this time slashing estimates on its earnings for 2019 by more than a third.
  • Occidental Petroleum, the top oil producer in the Permian Basin, is cutting jobs amid a slump at America’s most promising oilfield.
  • The Daily Telegraph

  • Almost 3,500 investors are preparing legal action in a battle to recover losses inflicted by the collapse of Neil Woodford’s investment empire.
  • Travelex has been criticised for leaving customers in the dark over a hacking attack after the currency transfer business refused to say if it had paid a US$6 million ransom.
  • Daily Mail

  • Airbus is plotting to expand in the UK after MPs backed Boris Johnson’s EU withdrawal deal that swept away some of the uncertainty over Brexit.
  • Home furnishings retailer Dunelm has posted a 6% growth in revenue for the first six months of the financial year.
  • The Guardian

  • Marks & Spencer shares fell sharply after its Christmas sales were dented by rivals’ discounts as well as its own buying mistakes.
  • Liberty Steel and the rolling stock manufacturer Hitachi announced job cuts affecting up to 505 staff across the UK.
  • Dixons Carphone has been hit with the maximum possible fine after the tills in its shops were compromised by a cyber-attack that affected at least 14 million people.
  • More than 11,400 investors are likely to lose more than £230 million in savings due to the collapse of London Capital & Finance after it was announced that only 159 affected mini-bond customers would receive compensation.