London pre-open: Stocks set to dip after U.S. jobs data

by | Aug 7, 2023

(Sharecast News) – Stocks in London were being called to start the session lower following a negative close to trading on Wall Street the week before.
Last Friday, a mixed U.S. non-farm payrolls reported had seen stocks on the other side of the Pond finished modestly lower.

“In essence there was something for everyone in Friday’s jobs report, weaker jobs growth, the unemployment rate inching lower, and robust wage growth,” said Michael Hewson, chief market analyst at CMC Markets UK.

“Ultimately it spoke to a resilient US economy, as well as a possible Fed pause in September, ahead of this week’s CPI report, although there are some on the FOMC who are still on the ‘more rate hikes to come’ line.”

As at 0718 BST, futures on the FTSE 100 were dipping by 20.0 points to 7,532.50.

US equity futures on the other hand were moving up by with those linked to the S&P 500 17.50 points higher to 4,515.50.

Stocks in Asia Pacific traded mixed overnight.

On the previous Friday, the Department of Labor reported a 187,000 increase in hiring (consensus: 200,000), alongside a -49,000 revision to prior months’ data.

Average hourly earnings on the other hand rose by a tenth of a percentage point more than expected or 0.4% month-on-month and the rate of unemployment dipped to 3.5%.

UK house prices fell at a month-on-month pace of 0.3% in July, reaching an average level of £285,044, according to mortgage lender Halifax.

That saw the year-on-year rate of decline ease from 2.6% in June to -2.4%.

In parallel, the Recruitment and Employment Confederation said that its Permanent Staff Placements Index fell from 46.4 in June to 42.4 for July, versus an average reading of 55.3 in 2022.

Commenting on the REC’s survey, Samuel Tombs, chief UK economist at Pantheon Macroeconomics, said: “The Report on Jobs survey should leave the MPC feeling more confident that it already has put enough pressure on businesses’ finances and on underlying consumer demand to slow the jobs market and cool wage growth.”

PageGroup announces special payout for shareholders

PageGroup reported a decline in operating profit in its half-year results on Monday, to £63.9m from £115.3m year-on-year. The firm also saw a decrease in its conversion rate to 12.1%, and a reduction in total headcount by 5.0% to 8,572 employees. However, it declared a 4.5% hike in its interim dividend and a special dividend, with its full-year operating profit outlook remaining consistent with prior projections.

Shipping services specialist Clarkson reported a sharp jump in first-half profit, driving by a strong performance in its broking division. The company on Monday said pre-tax profit for the six months to June 30 came in at £52.2m, up from £42m a year earlier. “The broking teams delivered a very strong first half, with standout performances from the tanker, specialised product, gas, offshore and sale and purchase sectors,” Clarkson said in a statement.

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