- FTSE 100 down 29 points at 7,418
- UK service sector contracts for third month in a row
- US non-farm payrolls weaker-than-expected
4.45pm: FTSE closes below par
At the close, the FTSE100 had lost 29 points, or 0.4%, to finish at 7,418.
3:35pm: Jim Ratcliffe to overhaul Old Trafford as part of Man Ured plans
Manchester United will receive an additional US$300 million (£245 million) to upgrade its infrastructure from prospective investor Jim Ratcliife, according to reports today.
The Ineos owner and billionaire is set to acquire a 25% stake in the Premier League club with details set to be revealed ‘shortly’ according to Sky News, but the infrastructure investment will be in addition to this, said the report.
According to Sky, Ratcliffe will pay around £1.25bn for his 25% stake, taking his total investment to around £1.5bn.
2:57pm: Weak oil price drags Shell and BP lower
The oil price has fallen back, pulling Shell and BP lower, adding to the more negative slant to the FTSE 100.
The weaker dollar isn't helping either with companies with US operations such as Compass, Relx, Pearson all moving lower.
On the risers, Ocado leads the way, up 8.8%, followed by retailer Kingfisher, up 4.5%.
BT, up 3.9%, continues to bask in the after-glow of yesterday's well-received results, while Segro is up 3.9% with JPMorgan upbeat, calling the stock its favoured UK property play.
2:32pm: A tale of two markets as mid-caps power ahead
While the FTSE 100 languishes, the mid-cap FTSE 250 has power ahead, now up 273 points at 18,040.
Wizz Air is flying higher, up 11.8%, with apparently no new news today.
On Thursday, Budapest-based Wizz said it carried 5.4 million passengers in October, up 19% from 4.5 million in the corresponding month a year ago, at a load factor of 93%, which is an improvement from 89% in October 2022.
EasyJet is also higher, up a slightly less lofty 4.3%
Otherwise, OSB has risen a further 7.2% after results on Thursday with housebuilder Persimmon, up 4.3%, on hopes interest rates have peaked.
2:10pm: US stocks push higher after weak payrolls
US stocks made strong early progress after weak non-farm payrolls figures backed expectations that interest rates have peaked.
Shortly after the opening bell, the Dow Jones Industrial Average was up 182.51 points, 0.5%, at 34,021.59, the S&P 500 was up 37.50 points, 0.9%, at 4,355.28 and the Nasdaq Composite was up 126.83 points, 0.9%, at 13,419.10.
Fawad Razaqzada at FOREX.com said: "Today’s publication of US jobs report has further cemented expectations that the Fed has reach peaked interest rates."
"Bond yields and the dollar have sold off as a result, with indices and gold moving higher."
James Knightley at ING agreed, noting: "Labour market numbers are always the last thing to turn in an economic cycle so the softening in employment and wage growth and the rise in the unemployment rate makes it all the more likely that the Federal Reserve won’t hike interest rates again."
But it hasn't boosted the London market with the FTSE 100 down 22 points at 7,424, the rising pound has hit some dollar earners in the index.
1:06pm: Pound jumps after weak payrolls report
Sterling has jumped after the weak payrolls report in the US.
Against the dollar, the pound is up 0.9% at $1.2309 - as the market perceives more rate increases are unlikely following the figures.
A more muted reaction for UK equities with the FTSE back hovering around opening levels.
12:52pm: FTSE perks up after weak US payrolls data
The FTSE is back to opening levels after weaker-than-expected payrolls data in the US.
The US economy added 150,000 jobs in October, fewer than expected, and previous months were revised lower, suggesting interest rate rises may be starting to slow economic growth.
US October non-farm payrolls +150K vs +180K expectedhttps://t.co/JkoNJmCw8w
— ForexLive (@ForexLive) November 3, 2023
Economists had expected 180,000 new jobs. In September, employers hired 297,00 more people, less than the 336,000 previously reported, and in August, there were 165,000 new private sector jobs, revised down from 227,000.
The unemployment rate ticked up to 3.9% while average hourly earnings rose by or 0.2% month-on-month and by 4.1% on an annual basis.
Job gains occurred in health care, government, and social assistance while employment declined in manufacturing due to strike activity.
Stocks futures have jumped sharply with the softer data supporting the narrative that interest rates have peaked.
12:17pm: Flutter lfted by strong DraftKings results
Shares in betting operator Flutter Entertainment are up 2.5%, following strong results in the US from DraftKings.
Shares in the sports and betting company soared after hours in the US after it reported much higher third-quarter revenues than expected and raised its full-year guidance.
For the third quarter, DraftKings reported revenue of $790 million, an increase of 57% over the $502 million reported in the year-ago quarter.
The US became Flutter's - which owns FanDuel - biggest market by revenue last year and it is pursuing a secondary listing in New York.
11:44am: Weak PMI likely to have influenced BoE rate call
The EY Item Club said although October's final services PMI came in slightly higher than September's reading, it still signalled a modest contraction in private sector activity.
But the economic forecaster still thinks GDP should still grow in the fourth quarter, helped by a fading drag from strike action in the public sector, but the pace of growth is likely to be marginal.
It pointed out the Monetary Policy Committee will have had sight of October’s survey in arriving at its November interest rate decision.
"The picture of weak activity, easing cost pressures and falling employment painted by the latest survey will likely have contributed to the committee’s decision to keep Bank Rate unchanged again," it reckons.
11:05am: Apple expected to weigh on Nasdaq
US stocks are expected to make subdued early progress although direction will likely be heavily influenced by non-farm payrolls figures before the opening bell.
In pre-market trading, futures for the Dow Jones Industrial Average were flat, while those for the S&P 500 were 0.1% lower, and contracts for the Nasdaq 100 futures fell 0.4%.
Economists expect the US to have added 180,000 jobs in October, a sharp drop from the surprise 336,000 added in September, keeping the unemployment rate at 3.8%.
Richard Hunter, head of markets at interactive investor, said: “As ever, the headline number will be critical in establishing the latest state of play.”
“A reading which conforms to consensus will provide further relief both to the Fed and to investors, while a hot reading would complicate the entire narrative once more, likely leading to higher yields and reigniting interest rate hiking concerns,” he added.
Elsewhere, US services sector growth is anticipated to have slowed slightly in October, with the Institute for Supply Management’s services purchasing managers’ index projected to tick down 0.6 percentage points to a reading of 53.
Stocks to watch include Apple which fell 3% in after-hours trading after the iPhone maker issued a weak revenue outlook for the December quarter.
This followed financial fourth quarter results which beat Street expectations for revenue and earnings despite sales falling for the fourth quarter in a row.
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown said: “Apple has sounded the alarm over Christmas demand, in what could be taken as a sign of creaking consumer resilience.”
“Expectations for the crucial festive trading season were lower than analysts had hoped for, following a lacklustre performance for iPads and wearables.”
10:50am: FTSE 100 falls back ahead of US jobs report
The FTSE 100 has lost its early shine and is down 2 points at 7,445 ahead of the US non-farm payrolls which are likely to provide direction for the rest of the session.
Stocks on the move include Rightmove, down 1.5%, after Citi reiterated a sell rating with a 445p price target.
The broker has cut EOS estimates by 3% to 6% taking it 10% below consensus for the 2025 financial year.
It thinks facing the well capitalised CoStar in Commercial and Residential changes the predictability of its earnings.
CoStar is entering the UK through the acquisition of on the Market.
Elsewhere, Endeavour Mining is up 0.9% as Morgan Stanley (NYSE:MS) reiterated an overweight rating and lifted its price target to 1,950p from 1,825p.
“European gold equities have underperformed gold prices by around 20% in the last 3 months, presenting an opportunity to gain exposure to the sector,” it said.
Endeavour remains its preferred play with its low-cost position and attractive valuation while it thinks Fresnillo's (equal weight) valuation is fair and lacks near-term catalysts.
The bank has a target for Fresnillo of 600p, up from 550p.
10:13am: Smith & Nephew de-rating overdone, says JPMorgan
Back to the FTSE 100 and one of the top risers is Smith & Nephew with shares up 3.3% in the wake of yesterday’s third quarter trading update.
JPMorgan has upgraded the firm to overweight from neutral pointing out shares have de-rated to 10-year lows in recent weeks.
This reflected concerns on a margin guidance downgrade post-H1 soft margins and secondly GLP-1 impact on procedures.
But the bank thinks stronger-than-expected third quarter revenues are likely to build confidence top-line growth is sustainable.
“Operating leverage from these revenues combined with phasing/cost savings and commentary on the margin outlook means the feared near-term downgrades won’t materialize,” JPM believes.
It also thinks the GLP1 impact has been overplayed.
It reckons the downgrade cycle that started in 2018 looks finally to be coming to an end and the de-rating in is overdone.
9:46am: UK private sector contracts, optimism falls
The UK’s private sector contracted in October with optimism about growth prospects the lowest so far this year, figures showed today.
At 49.5 in October, the headline seasonally adjusted S&P Global/CIPS UK Services PMI Business Activity Index was up fractionally from 49.3 in September and above the earlier 'flash' reading of 49.2.
???????? #UK service sector activity fell for the 3rd month in a row in October, as the @SPGlobal @cipsnews #PMI registered 49.5 (Sep: 49.3). The downturn led to a drop in #employment for only the 2nd time in nearly 3 years. Read more: https://t.co/WPj8HN3nhn pic.twitter.com/TVFAfU7Qvt
— S&P Global PMI™ (@SPGlobalPMI) November 3, 2023
Firms typically cited cost of living pressures, high interest rates and weak consumer confidence as factors holding back customer demand.
Job shedding continued in October, reflecting lower new orders and uncertainty about the business outlook.
The degree of optimism among services companies regarding year ahead growth prospects was the lowest in 2023 so far.
Tim Moore, Economics Director at S&P Global Market Intelligence, which compiles the survey: "A shallow downturn in UK service sector activity persisted in October as businesses struggled to make headway against a backdrop of worsening domestic economic conditions and stretched household budgets. "Forward-looking survey indicators suggested that service providers will continue to skirt with recession.
9:10am: Poor weather keeps shoppers away from the High Street
The decline in UK retail footfall worsened In October, according to latest figures, as poor weather kept shoppers away from the high street.
According to the latest British Retail Consortium-Sensormatic IQ tracker, UK retail footfall declined 5.7% on-year in October, worse than September's 2.9% fall.
Helen Dickinson chief executive at the BRC said: “Umbrellas were up as heavy rainfall descended across the UK in October, leading many shoppers to stay at home.”
High Street footfall slipped by 4.6% in October, after a 1.1% fall in September while in retail parks, footfall decreased by 4.3% in October, worsening from September's 2.4% decline.
Footfall in shopping centres dipped 7.3%, compared to September's 4.0% fall.
Andy Sumpter retail consultant at Sensormatic Solutions commented that shopper traffic was regionally impacted by Storm Babet which delivered the most severe and widespread disruptive weather of the year to date.
“The ongoing cost-of-living pressure continues, despite inflationary easing, to impact shopper behaviour through October,” he added.
He noted consumers appear to be visiting fewer stores during each trip, suggesting a shift away from shopping around for the best deals toward more focused purchasing.
8:43am: FTSE 100 rallies on hopes hiking cycle is over
The FTSE 100 continues to extend its recent rally, now up 29 points at 7,475.62.
Richard Hunter, head of markets at interactive investor, commented “After a dismal October for markets, November has opened with a different narrative and a very different performance."
He explained while the Federal Reserve's move to hold rates was no surprise, the accompanying comments from Chair Powell "lit the fire under stocks, with a noticeable fall in Treasury yields providing further fuel."
While leaving the door slightly ajar to further rate rises should inflation unexpectedly tick higher once more, sentiment has switched to the belief that the hiking cycle is now over, he said.
Banks are prominent risers with NatWest up 2.3% and Barclays up 1.8%, while Smith & Nephew is up 3.1% after its results on Thursday.
BP has ticked 1.3% higher as analysts at Barclays play down market concerns the oil major may struggle to maintain its $1.5 billion buyback in the fourth quarter while industry peer, Shell, is down 1.2%.
8:15am: FTSE 100 extends gains, Currys jumps
The FTSE 100 made a bright start to the day as investors continue to bet interest rates have peaked after the Bank of England’s decision to leave interest rates unchanged on Thursday.
At 8:15am, London’s blue-chip index was up 23.27 points, 0.3%, at 7,469.80 while the FTSE 250 was up 106.54 points, 0.6%, at 17,873.84.
Goldman Sachs (NYSE:GS) James Moberly expects interest rates to remain on hold at 5.25% at the upcoming meetings and expects a first cut in the third quarter of 2024.
“Faced with low growth and high inflation, the uncertainty around the policy outlook, however, remains significant,” he cautioned.
On a quiet morning for company news, Currys jumped 5.8% after confirming the sale of its its Greece and Cyprus retail business, Kotsovolos, to Public Power Corp for an enterprise value of €200 million (£175 million).
Net cash proceeds of the disposal are expected to be around £156 million.
Analysts at Liberum described it as “excellent outcome.”
“It bolsters the balance sheet further and should help to deliver a c.£50 million year-end net cash position,” the broker said.
Wickes was little moved by its trading update, confirming guidance, as a slight dip in fourth quarter sales.
7:38am: Currys confirms sale of Greek outfit, Kotsovolos
Currys PLC (LSE:CURY) has confirmed the sale of its Greece and Cyprus retail business, Kotsovolos, to Public Power Corp for an enterprise value of €200 million (£175 million).
The electricals retailer said the deal would simplify its enabling it to focus on its larger markets of the UK & Ireland and Nordics, while strengthening the balance sheet.
Net cash proceeds of the disposal are expected to be around £156 million.
Currys said in the short term, the proceeds will help reduce net debt but it also intends to speak with pension trustees regarding the potential to reduce the pension fund's accounting net deficit.
In October, the firm said it was mulling offers for its Greek business from "several" potential buyers but was not certain whether a sale will go ahead.
The sale is expected to complete in the first quarter of 2024 .
7:27am: Wickes backs guidance, IT issues disrupt sales
It's a quiet morning for company news but we will start with a trading update fron building materials outfit, Wickes Group PLC (LSE:WIX).
The firm said it remained comfortable with full-year estimates after a flat third quarter and despite some delays in its Do It For Me (DIFM) operation.
In a trading update for the 13 weeks to September 30, the building materials supplier said sales fell 0.2% from the previous year, compared to growth of 3.0% in the second quarter.
Core like-for-like (LFL) sales grew 1.1%, with growth in volume for the first time since the second quarter of 2021.
TradePro sales continue to show double digit growth, with the customer base continuing to grow strongly, although DIY sales remain moderately down on the prior year.
Selling price inflation in the period was broadly flat, a position which Wickes expects to continue for the remainder of the year and into 2024.
DIFM LFL sales fell 4.4%, partially driven by a more normalised order book compared with the first half.
But Wickes also experienced some delays to delivered sales as a result of the transition to a new software solution fulfilling customer orders.
The firm said actions are being taken to enable this to be resolved, although there will be some impact on fourth quarter delivered sales which will now fall into the next financial year.
Wickes said it was "comfortable" with current market consensus for 2023 adjusted pre-tax profit of £45.3-49.0 million on a post-IAS38 basis.
7:00am: FTSE called higher ahead of non-farm payrolls
The FTSE 100 is expected to open higher on Friday, building on Thursday’s strong progress, after further strong gains in the US.
Spread betting companies are calling London’s lead index by around 26 points after closing up 104.10 points at 7,446.53.
Equities have been boosted by perceptions interest rates have peaked following decisions by the Bank of England and Federal Reserve to leave interest rates unchanged, which lifted shares as bond yields fell.
In New York on Thursday, the Dow Jones Industrial Average jumped 1.7%, the S&P 500 leapt 1.9% and the Nasdaq Composite surged 1.8%.
How far this rally extends could depend on US non-farm payrolls today.
A Bloomberg-compiled consensus said the US economy is expected to have added 180,000 new non-farm jobs, the unemployment rate is seen steady at around 3.8% and wages growth may have slowed from 4.2% to 4% on an annual basis.
Back in London, and after a hectic week of corporate news, the diary looks thin.
In economic news, a service sector PMI reading is due at 09:30 GMT.