3rd Nov 2023 07:40
(Alliance News) - London's FTSE 100 is called to open higher on Friday, following a positive handover from Asia, putting it on track for its strongest weekly gain since mid-September.
Equity markets have negotiated three interest rate decisions, from the Bank of Japan, US Federal Reserve and Bank of England, leaving the latest US jobs report as the final risk event for the week.
According to FXStreet cited consensus, US nonfarm payroll growth is expected to have eased to 180,000 in October, from 336,000 in September. That outcome would aid the notion that the Fed is done hiking. A hotter-than-expected reading may strengthen the case for the Fed to resume hiking, or at least leave rates at loftier territory for longer.
"Any strength in job additions or wages growth data could bring bond trades back to earth and remind them that if the US jobs market - and the economy - remains this strong, the Fed could turn hawkish again. But strong jobs data in a context of higher supply is not necessarily inflationary," Swiss quote analyst Ipek Ozkardeskaya commented.
In early UK corporate news, Currys said it sold its Greek and Cypriot business. DIY retailer Wickes reported a slight fall in third-quarter like-for-like sales. Overnight, results from New York-listed Apple were downbeat.
Here is what you need to know at the London market open:
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MARKETS
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FTSE 100: called up 0.4% at 7,472.23
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Hang Seng: up 2.4% at 17,643.75
S&P/ASX 200: closed up 1.1% at 6,978.20
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DJIA: closed up 564.50 points, or 1.7%, at 33,839.08
S&P 500: closed up 1.9%, at 4,317.78
Nasdaq Composite: closed up 1.8% at 13,294.19
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EUR: up at USD1.0632 (USD1.0613)
GBP: up at USD1.2210 (USD1.2176)
USD: down at JPY150.26 (JPY150.48)
GOLD: up at USD1,987.58 per ounce (USD1,981.27)
OIL (Brent): up at USD87.14 a barrel (USD86.38)
(changes since previous London equities close)
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ECONOMICS
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Friday's key economic events still to come:
10:00 GMT EU unemployment
09:30 GMT UK services PMI
12:30 GMT US employment report
13:45 GMT US S&P Global services PMI
14:00 GMT US ISM services PMI
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The decline in UK retail footfall worsened last month, with poor weather meaning fewer visits to the high street. According to the latest British Retail Consortium-Sensormatic IQ tracker, UK retail footfall declined 5.7% on-year in October. It was a worse outcome than September's 2.9% decline. High Street footfall alone decreased by 4.6% in October, after a 1.1% fall in September. In retail parks, footfall decreased by 4.3% in October, worsening from September's 2.4% decline. Footfall in shopping centres slumped 7.3%, deepening from September's 4.0% fall. "Umbrellas were up as heavy rainfall descended across the UK in October, leading many shoppers to stay at home. As inflationary pressures on households begin to ease, some people are shopping around slightly less, braving the rain only to make their final purchases. This led to a larger year on year drop in footfall in all shopping locations than we saw in September," BRC Chief Executive Helen Dickinson commented.
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Overall private sector growth in Ireland slowed in October, while output and new orders declined for the first time in 2023, survey results from S&P Global showed. The AIB services purchasing managers' index slipped to 52.6 points in October from 54.5 in September, remaining above the neutral 50-point mark and indicating expansion, albeit at a slower pace. October's figures indicated the weakest growth since January. AIB Chief Economist Oliver Mangan said: "Of particular concern in the Irish data was a marked slowing in new business in October, with an outright contraction in new export business, the first such decline since February 2021. This points to weakening demand conditions and a likely further loss of momentum in the sector in the next couple of months. Meanwhile, employment growth was at the slowest rate in 32 months, while backlogs of work rose at the weakest pace so far in 2023. Despite all this, firms remained optimistic about their expectations for business activity over the coming twelve months."
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BROKER RATING CHANGES
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Panmure reinitiates Auto Trader with 'buy' - price target 695 pence
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Jefferies raises Cordiant Digital to 'buy' (hold)
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Goldman Sachs raises AIB price target to 7.10 (6.90) EUR - 'buy'
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COMPANIES - FTSE 250
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Consumer electronics retailer Currys said it has struck a deal to sell Dixons South East Europe, the holding company of its Greece and Cyprus retail business Kotsovolos. The unit will be sold to Public Power Corp for an enterprise value of EUR200 million. "The disposal will simplify the group's structure enabling it to focus on its larger markets of the UK & Ireland and Nordics, while simultaneously strengthening Currys' balance sheet, increasing flexibility to invest and grow the business and improve shareholder returns," the company said. Currys plans to use the proceeds to trim net debt. It will also look to enter into discussions with pension trustees for the potential to reduce the pension fund's accounting net deficit and required future contributions. It expects to seal the sale in the first-quarter of 2024, subject to shareholder approval and clearance from the European Commission or the Hellenic Competition Commission.
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OTHER COMPANIES
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Wickes Group said it reported a "solid" third-quarter in the face of tricky market conditions. The home improvement retailer said like-for-like sales declined 0.2% year-on-year in the 13 weeks to September 30. Core sales rose 1.1% on a like-for-like basis, though 'do-it-for-me' sales declined 4.4%. In the DIFM business, customers pay tradespeople to do home improvement projects for them. "Once again thanks to our amazing colleagues we have delivered a solid performance in a challenging market as we continue to deliver against our strategic growth drivers. In our Core business we have gained further market share and achieved a return to volume growth. We have fulfilled strong demand from our Trade customers and been encouraged by greater stability in DIY," Chief Executive David Wood said. Wickes said it is "comfortable" with market consensus for adjusted pretax profit between GBP45.3 million and GBP49.0 million.
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Surface Transforms cut its full-year sales outlook, after a weaker October than expected. The carbon-ceramic automotive brake disc manufacturer said that while some technical problems have been overcome, it is still seeing challenges in its production line. "These challenges, which are being resolved, are hindering us from creating sufficient capacity resilience and are constraining our production ramp up," it said. "In the light of these challenges, the company is now planning its cash needs and customer commitments based on a shallower ramp and now expects to reach the required rate of production in Q1 2024, later than previously forecast." Surface Transforms is now cutting sales guidance for 2023 to GBP8.6 million. It added: "Overall, the outlook for 2024 to 2027 continues to remain very positive reflecting contracts in series production and recent new business announcements, with capacity being installed to fulfil these awards."
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Apple reported a quarterly revenue record for the iPhone, but it wasn't enough to stop group sales falling for the fourth quarter in a row. The Cupertino, California-based firm said in the financial fourth quarter revenue fell 0.7% to USD89.50 billion from USD90.15 billion the year before, although net income rose 11% to USD22.96 billion from USD20.72 billion. Basic earnings per share rose to USD1.47 from USD1.29. iPhone sales climbed to USD43.81 billion from USD42.67 billion the year before, while services sales jumped to USD22.31 billion from USD19.19 billion.
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By Eric Cunha, Alliance News news editor
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