- FTSE 100 down 35 points
- House prices near record
- US unemployment ticks down
4.02pm: Royal Mail hikes first-class stamp price
International Distributions Services PLC (LSE:IDS)-owned Royal Mail has said it will hike first class stamp prices in a bid to ward off “very real and urgent” financial challenges.
The stamps will cost 30p more at £1.65 from October 7 as a result, with second-class post set to remain unaffected.
"We always consider price increases very carefully,” chief commercial officer Nick Landon commented.
“However, when letter volumes have declined by two-thirds since their peak, the cost of delivering each letter inevitably increases”... Read more
3.52pm: FTSE 100 heads for sixth successive daily fall
London’s blue chips temporarily climbed above the mark on Friday afternoon but failed to hold gains, leaving the FTSE 100 on course to fall for a sixth successive session.
Come late trading, the index was down 46 points at 8,195, led lower by housing companies and miners.
Vistry Group PLC (LSE:VTY) topped the day’s losers with a 5% decline after UBS analysts stuck to a ‘sell’ rating on the housebuilder despite positive results on Thursday.
Miners Anglo American PLC (LSE:AAL), Antofagasta PLC (LSE:ANTO) and Glencore PLC (LSE:GLEN) followed among the day’s fallers as the likes of copper and iron ore prices dropped throughout the day.
Primark owner Associated British Foods PLC (LSE:ABF) also dipped as markets grappled with Thursday’s news sugar profits and clothing sales had faced a blow over the first half of the year.
Rolls-Royce Holdings PLC (LSE:RR.) joined the losers too, after European regulators ordered A350 engine checks following Cathay Pacific’s incident earlier in the week.
3.31pm: Rolls-Royce hit from engine inspections to be 'limited'
Rolls-Royce Holdings PLC (LSE:RR.) should not face a “material” blow after European regulators ordered A350 engine inspections following Cathay Pacific’s incident earlier this week.
Citi analysts moved to reassure that any compensation required from the engine maker would likely be “limited,” reiterating a ‘buy’ rating a 550p share price target.
Europe’s aviation safety agency (EASA) said Thursday that “one-time inspections” of some A350s across Europe would be required after an engine issue saw a Zurich-bound Cathay flight forced to return to Hong Kong on Monday.
Some 48 A350 planes were subsequently grounded by Cathay, following reports of an engine fire, with inspections finding defective engine fuel lines in 15.
Citi noted no other airlines had reported similar issues as of yet, adding the inspections by Cathay had been fast with unaffected jets able to return to service immediately.
“External fuel pipes are easily accessible and can be replaced on the apron,” analysts added, with any replacements not set to face long lead times and fixes able to be completed without removing engines.
Rolls-Royce shares fell 2.6% on Friday.
2.50pm: Wall Street mixed but calm on jobs data, 0.5% base rate cut expectations climb
Wall Street faced a mixed but calm start on Friday after non-farm payroll figures missed expectations again but unemployment ticked down slightly.
The Dow Jones climbed 0.4% as the market opened, while the Nasdaq fell 0.7% and S&P 500 dipped 0.1%.
Though the non-farm payroll figures were again worse than expected, at 142,000 against an anticipated 160,000, a 0.1% drop in unemployment in August appeared to ease fears over a US recession.
This comes after last month’s global market turmoil, which had been sparked by July’s poorer-than-expected job market data.
Wall Street appeared to hike expectations for a 50 basis point cut to base interest this month on the back of the figures.
According to CME Group’s FedWatch Tool, expectations for the steeper cut climbed to 51% after the figures, against 41% beforehand.
2.37pm: Qualcomm reportedly eyeing Intel’s chip design business
Qualcomm Inc (NASDAQ:QCOM, ETR:QCI) is reportedly eyeing up parts of Intel Corp (NASDAQ:INTC, ETR:INL)’s chip design business, according to Reuters.
Sources cited by Reuters said the semiconductor and software firm was looking at parts of Intel in order to boost its own product portfolio.
This includes Intel’s PC business, which is of significant interest, according to the sources, but could stretch to any of the firm’s design units.
No firm approach is said to have yet been made, with the report coming as Intel struggles to generate cash and reportedly looks to sell off assets as a result... Read more
1.45pm: Unemployment figure eases concerns over jobs miss
A repeat of last month’s global sell-off looks to have been averted despite Friday’s non-farm payroll figures missing expectations once again.
This is as unemployment ticked down 0.1% to 4.2% over the course of August, appearing to calm nerves that the US economy was on course for recession.
Non-farm payroll figures from the US Bureau for Labour Statistics had shown the addition of 142,000 jobs in August, against expectations for 160,000.
Though this marked another miss following July’s below-expected figure, the aftermath appeared to be far less dramatic, with the FTSE 100 little changed by the news and US market futures remaining just below the mark, as seen before the data’s release.
Omnis Investment chief executive Andrew Summers noted the latest miss was “not a total surprise given the summer months tend to be more volatile and changeable”.
“Our base case remains a 25 basis point cut from the Federal Open Market Committee at the next meeting,” he added.
1.33pm: US economy adds fewer jobs than expected again
Bureau for Labour Statistics data on Friday showed the US economy added fewer jobs than expected once again in August.
Some 142,000 jobs were added to the economy over the month, the non-farm payroll figures showed, against 114,000 in July and below expectations for 160,000.
Unemployment remained little changed at 4.2% over the month, but climbed against the 3.8% recorded a year earlier.
1.28pm: Stocks remain downtrodden ahead of US non-farm payrolls
The FTSE 100 remained on the back foot ahead of US non-farm payroll data, due at 1.30pm UK time.
London’s blue-chips were down 13 points at 8,228 come Friday afternoon, with Vistry Group PLC (LSE:VTY) leading fallers after being hit with a ‘sell’ rating by UBS analysts.
Burberry Group PLC (LSE:BRBY) and Barratt Developments PLC (LSE:BDEV) also sat among the day’s losers, with the FTSE 100’s decline leaving it on course for a sixth day of successive falls.
Stocks across Europe also largely stayed in the red into the afternoon too, with Brussel’s Bel20 the only index managing to chalk up a gain.
US markets also appeared to be stuck in a cautious mood, with futures showing the Nasdaq, S&P 500 and Dow Jones all lower ahead of the jobs data.
Last month’s non-farm payroll figures had sent global markets into freefall, with Friday’s figures expected to show the addition of 160,000 jobs in the US economy throughout August.
12.25pm: Nasdaq seen lower as Wall Street braces for jobs data
Wall Street looked to be headed for a negative start on Friday as investors braced for non-farm payroll data, due later in the day.
Futures had the Nasdaq down 1.1% ahead of the bell, with the S&P 500 and Dow Jones also looking to drop 0.6% and 0.4% respectively.
Last month’s non-farm payroll figures had sent global markets into freefall, leaving eyes firmly fixed on Friday’s latest data and any signs the US could in fact be heading for recession.
“Labour data, and primarily US Non-Farm Payrolls, offer up some of the clearest guidance over the underlying strength [of the] economy,” Trade Nation analyst David Morrison commented.
Fears are of another sell-off after Friday’s figures, he added, with last month’s coming on concerns the Federal Reserve had choked the economy by failing to bring interest rates down in time.
Expectations are for the US economy to have added 160,000 jobs over the course of August, against 114,000 in July.
12.14pm: Ivy restaurants set to be sold for £1bn
Richard Caring is reportedly closing in on the £1 billion sales of his collection of Ivy restaurants.
According to Sky News, the billionaire businessman is nearing a deal with London-based Si Advisers to offload most of his stake in the celebrity-favourite restaurant brand.
This is expected to see The Ivy business valued at around £1 billion, with other shareholders set to sell their stakes as part of the deal.
11.28am: German recession fears reignited as car production slumps
Fears Europe’s largest economy is headed for recession were stoked on Friday morning as data showed German car production slumped last month.
According to federal statistics agency Destatis, output from Germany’s automotive industry fell by 8.1% between June and July.
This weighed on overall industrial output, which declined by 2.4% in the meantime.
“The big drop [...] adds to the sense that the sector is facing a deep crisis,” Capital Economics economist Franziska Palmas commented.
“Having contracted in the second quarter, the German economy may fall back into a technical recession in the third quarter.”
Separate data from Eurostat on Friday also showed estimated Eurozone gross domestic product for the second quarter had been scaled back, in part driven by a decline from the German economy.
Eurozone growth between April and June was said to have sat at 0.2% against the first quarter, compared to a previous estimate of 0.3%.
11.04am: Endeavour tops risers as gold gains ahead of US job figures
Endeavour Mining PLC (LSE:EDV, TSX:EDV, OTCQX:EDVMF) gained on Friday morning as traders bet a poor read in US job figures later in the day would quicken the pace of US rate cuts and buoy gold prices.
Shares in the gold-focussed miner ticked up 1.9% early on to top the FTSE 100’s risers.
This was as gold prices remained elevated at US$2,520 per ounce on Friday morning ahead of the US non-farm payroll figures, having risen 0.2%.
Expectations are for 160,000 jobs to have been added to the US economy in August, with a miss in last month’s reading sending global markets into freefall.
This was as the weaker data prompted fears over recession in the world’s largest economy, on concerns the Federal Reserve had held interest rates high for too long.
Pointing to futures showing a negative start for Wall Street on Friday, alongside the uptick in gold prices, AJ Bell analyst Russ Mould noted investors were “extremely nervous”.
“The Federal Reserve looks hard at employment trends when it decides on interest rates,” he added, with any surprises in Friday’s data threatening to change the course of cuts, which are expected from this month.
10.39am: Shell, BP dragged lower as oil set for worst week in a year
Shell PLC (LSE:SHEL, NYSE:SHEL) and BP PLC (LSE:BP.) shares fell on Friday as oil prices appeared to head towards their largest weekly decline in almost a year.
At US$72.65 a barrel on Friday morning, Brent crude had fallen more than 8% over the course of the week, white West Texas Intermediate was down 9% at US$69.17.
This was in spite of news the OPEC+ cartel would delay a planned increase in production from October to December.
Fears over a supply surplus into next year have emerged recently, with the fall also coming despite data from the US showing crude inventories had dropped to their lowest level in roughly a year last week.
Easing political tensions in Libya, which had seen exports slashed, prompted prices to fall heavily earlier in the week.
Shell fell 1.4% on Friday, while BP dipped 0.9%.
9.44am: Primark owner falls further as DB cuts targets
Primark owner Associated British Foods PLC (LSE:ABF) fell further on Friday morning after Deutsche Bank analysts wound down expectations for the firm.
ABF’s update on Thursday showed Primark sales had fallen on a like-for-like basis over the first half of the year and profits from its sugar business were lower than expected.
“Investors were already cautious on the weak Primark [...] performance but this remains the main ongoing cause for investor uncertainty on the stock,” Deutsche said in a note.
A ‘sell’ rating was reiterated as a result, with Deutsche also winding down pre-tax earnings forecasts for the coming three years.
The bank’s share price target for ABF was cut too, from 2,190p to 2,130p.
“We need to see more evidence of a recovery in Primark like-for-like, otherwise we believe they will need to invest more into the brand to deliver a sales uplift,” Deutsche added.
Shares fell 1.9% to 2,245p on Friday, following a drop on Thursday.
9.28am: European stocks in red as markets brace for US job figures
Markets across Europe were in the red on Friday morning ahead of US non-farm payroll figures.
Poor data this time last month had sent global markets into freefall, with a recovery only fully coming towards the end of August.
This was as lower-than-expected figures prompted fears that the Federal Reserve had held high interest rates for too long and threatened the US economy with recession as a result.
Some better data since has appeared to ease such concerns, with expectations now widely for a rate cut by the central bank this month.
Private payroll data most recently on Thursday showed the weakest growth in three years though, while separate figures saw unemployment claims fall, painting a mixed picture.
“There is extra emphasis [...] on today’s employment report” as a result, interactive investor analyst Richard Hunter noted.
“[This] will walk the fine line between whether the fabled soft landing is on track, or whether the Federal Reserve has missed the boat with a potential recession in sight.”
Expectations are for 160,000 jobs to have been added to the US economy in August, with the report due at 1.30pm UK time.
9.09am: ‘Far too soon’ to hail housing market recovery - analysts
Britain’s housing market is still some way off a full recovery, analysts have said, despite Halifax figures on Friday showing prices had hit a two-year high last month.
Garrington Property Finders chief executive Jonathan Hopper warned prices may well dip once again in the coming months as builders ramp up work to bring new properties onto the market.
“Even with interest rates likely to come down further in coming months, it’s far too soon to call this a full recovery,” he said
“In recent weeks we’ve seen a surge of homes come onto the market, and this jump in supply has yet to be fully absorbed.”
Ingenious Real Estate managing director Tom Brown added it was also important to note disparity between pricing changes across different areas of the UK.
Halifax had reported overall prices jumped by 4.3% over the year to August to £292,505, marking their highest since the same month in 2022 and seeing the figure just £1,000 off the record.
However, figures from the lender also showed prices climbing by as much as 9.8% in Northern Ireland and as little as 0.3% in the East of England.
“There's clearly a significant and notable shortage of housing inventory across various price brackets and locations,” Brown said.
“Consequently, any decline in homeowner sales is likely counterbalanced by increased demand from renters and investors. This is a trend that is not going away.”
8.47am: Vistry, Rolls-Royce lead fallers
Vistry Group PLC (LSE:VTY) reversed on gains seen after Thursday’s update on Friday morning, sending shares down 2.2% early on.
The housing group led the FTSE 100’s fallers as a result, followed by Rolls-Royce Holdings PLC (LSE:RR.), which was sent 2.1% lower on news EU regulators had ordered checks of A350 jets after Monday’s Cathay Pacific engine issue.
Banks also sat lower, with Barclays PLC (LSE:BARC), NatWest Group PLC (LSE:NWG) and HSBC Holdings PLC (LSE:HSBA) all among the day’s fallers.
This follows pressure recently on the back of speculation lenders could be in line for a tax raid come October’s Autumn Budget.
Elsewhere, Berkeley Group Holdings PLC (LSE:BKG) also moved lower following its update on Friday morning... Read more
Overall, the FTSE 100 dropped 33 points to 8,208, threatening to take the index to its sixth consecutive daily decline.
8.29am: Rolls-Royce hit as EU orders A350 inspections
Rolls-Royce Holdings PLC (LSE:RR.) shares faced a blow on Friday after European regulators ordered checks on A350s following Monday's Cathay Pacific incident.
This had seen an engine fire force a Cathay Zurich-bound flight to return to Hong Kong, the regulator noted, with this having been powered by Rolls-Royce.
“EASA is taking precautionary measures to prevent any further similar occurrence,” the European regulator said Thursday.
“We will require a one-time fleet inspection, which may be applicable only to a portion of the A350 fleet.”
The European regulator also signalled an engine fire had been behind the Cathay incident, which it said was “promptly detected and extinguished”.
Rolls-Royce fell 2.1% to 468p on Friday... Read more
8.09am: 7-Eleven $38bn takeover rejected
7-Eleven’s parent has rejected a US$38 billion (£29 billion) takeover offer from by Canadian convenience store giant Alimentation Couche-Tard Inc (TSX:ATD.B).
ACT, which owns the Circle K chain, announced the surprise bid in August, in what would have been the largest takeover of a Japanese corporate in history… Read more
8.03: Gear4Music sees growth plan feeding through this year
Gear4music Holdings PLC (AIM:G4M) said Friday that results of its growth strategy should start feeding through this year after progress on debt and cost-cutting.
Having cut debt from £14.5 million to £7.3 million throughout the course of last year, the music equipment retailer said it had now been able to focus on its growth strategy.
This included plans to integrate artificial intelligence into Gear4Muisic’s platform, increase product offerings, diversify channels to market and set up new operations in Europe, according to a previous update in June.
“[We] expect this to start delivering results in the second half of this year,” Gear4Music added on Friday... Read more
7.43am: Nationwide's takeover of Virgin Money gets regulatory go-ahead
Regulators have given the green light for Nationwide Building Society's £2.9 billion acquisition of Virgin Money UK PLC (LSE:VMUK)... Read more
7.29am: House prices near record at two-year high
House prices continued to tick up in August, bouncing back from weakness seen last year.
According to Halifax, average prices climbed 4.3% on an annual basis in August to £292,505.
This meant house prices were at their highest level since the same month in 2022 and sat just £1,000 off the record seen in June of that year.
Prices increased by 0.3% on a monthly basis, following a 0.9% uptick in July.
“Recent price rises build on a largely positive summer for the UK housing market,” Halifax mortgages head Amanda Bryden commented.
“Prospective homebuyers are feeling more confident thanks to easing interest rates.”
7.16am: Stocks seen lower
A further decline is expected for the FTSE 100 on Friday morning, as futures see the blue-chip index off three points at 8,249 ahead of the open.
This would add to a poor run of form for London’s blue chips this week, which have so far dropped 1.6% since Monday morning.
Leading headlines on Friday was news house prices had hit their highest in two years last month after climbing to £292,505, according to Halifax.
A largely quiet day was due on the reporting front, with attention set to be on updates from Berkeley Group Holdings PLC (LSE:BKG) and Gear4Music PLC.
Key US jobs market data is due from the Labour Department later in the day though, as speculation grows over interest rate cuts and the health of the world’s largest economy.