London pre-open: Stock to rise ahead of non-farm payrolls report

Fri 10 Jan 2020

LONDON (SHARECAST) - (Sharecast News) - London stocks were set to rise at the open on Friday following a positive session on Wall Street, as investors eyed the release of the latest non-farm payrolls report.
The FTSE 100 was called to open 27 points higher at 7,625.

CMC Markets analyst Michael Hewson said: "With this week's geopolitical risk subsiding as we head towards the weekend, investors now have the opportunity to focus on the signing of the signing of the new US, China phase one trade deal next week, as well as the health of the US economy today, and in particular the labour market which has continued to look resilient.

"Wednesday's ADP employment report for December showed a decent rebound after an initially weak November reading, and while that was subsequently revised up to 124k it was still significantly weaker than the more closely monitored non-farm payrolls report, which showed a big jump to 266k in November.

"This shouldn't have been a surprise given that November tends to be a strong month due to seasonal factors in the lead up to Thanksgiving, as stores hire more part time and temporary staff for the holiday season.

"In today's December US employment report, we can expect to see a softening to 162k, 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."

Hewson said wage growth will also be closely scrutinised for any signs of weakness. It is expected to come in at 3.1%, while the unemployment rate is expected to remain steady at 3.5%.

In UK corporate news, JD Sports Fashion said it expected full year profits to be in the upper quartile of expectations after positive like for like Christmas sales, especially from its overseas operations.

The company said that the figures would be influenced by trading throughout January due to a differentiated timing of the post-Christmas sale period in a number of its key overseas markets.

"We remain confident that the full year group headline profit before tax will be in the upper quartile of current market expectations which, after adjusting for the impact of the transition to IFRS 16, range from 403m - 433m," the company said.

Paper and packaging firm Mondi said chief executive Peter Oswald would step down and leave the group on March 31.

Chief financial officer Andrew King had agreed to take on the role on an interim basis until a successor was appointed, Mondi said.

Great Portland Estates has exchanged contracts to sell 24/25 Britton Street, EC1 to an overseas investor for a headline sale price of 64.5m, equating to 64.06m after the deduction of vendor top ups.

The company said the headline price reflected a net initial yield of 4.07% and a capital value of 1,255 per square foot.

It said the premium to the September valuation was 6.2%, with completion scheduled for 22 January.
Archived Stories

01 Apr London pre-open: Stocks to slide again after downbeat US, Asian sessions
31 Mar London pre-open: Stocks to edge lower; China manufacturing data encouraging
30 Mar London pre-open: Stocks seen muted despite downbeat Asian session
27 Mar London pre-open: Stocks seen lower as caution sets in ahead of weekend
26 Mar London pre-open: Stocks seen lower ahead of jobless claims, BoE