- FTSE 100 up 83 points
- US jobs numbers undershoot
- Reckitt surges on baby formula ruling
4.02pm: FTSE 100 in damage control mode
London’s blue chips looked to be on course to recoup some of the declines seen over the week on Friday as the FTSE 100 headed into late trading up 83 points at 8,193.
This took the index’s fall for the week to 55 points, following declines around the Budget on Wednesday.
Reckitt Benckiser Group PLC and Schroders PLC led risers on the FTSE 100 on Friday, climbing by 7.4% and 4.3% respectively.
The former had been boosted by a court ruling rejecting claims that baby formula made by its Mead Johnson division caused inflammation of the bowel, or necrotizing enterocolitis… Read more
Schroders gained after penning a deal to add a range of its investment funds to Singapore-based ANEXT Bank’s product suite.
Lloyds Banking Group PLC, Beazley PLC, Melrose Industries PLC and Rolls-Royce Holdings PLC were also among Friday’s gainers.
3.32pm: Ryanair to slash 10% of UK flights on higher tax
Ryanair to slash thousands of flights UK as O’Leary slams ‘tax grab’ Budget
Ryanair Holdings PLC will flight capacity to and from UK airports by 10% next year due to an increase in air passenger duty announced in this week’s Budget.
Chief executive Michael O’Leary on Friday slammed chancellor Rachel Reeves’ Budget, dubbing last Wednesday’s statement a “short-sighted tax grab”.
Reeves had announced air passenger duty would increase from 2026, equating to an additional £2 per economy ticket on short-haul flights.
O’Leary argued the government had “damaged tourism and damaged air travel to and from the UK,” through the move, warning higher air tax would “deliver cuts, not growth”.
“This [...] will make the UK a less competitive destination compared to Ireland, Sweden, Hungary and Italy where these governments are abolishing travel taxes to stimulate traffic, tourism, and jobs growth in their economies,” O’Leary said... Read more
2.32pm: Jobs miss ‘non-event’ but ‘makes life easier for Fed’ - analyst
Shock US non-farm payroll figures for October will likely be all but ignored, according to XTB analyst Kathleen Brooks, but should made “life easier for the Federal Reserve”.
Dubbing the report, which showed the addition of 12,000 jobs in October against expectations for 100,000, a “non-event”, Brooks highlighted the figures were “heavily distorted by weather and strikes”.
“The bureau for Labor Statistics in the US said that the survey collection rate for October was well below average, thus expect big revisions down the line,” she said.
“It is likely that the Fed will look through these employment numbers, and instead November numbers will be worth watching to see the trend in the US labour market and any revisions to the October data.”
Markets have priced in more extensive rate cuts following the figures though, Brooks added, noting the implied Fed interest rate for December slipped by two basis points to 4.37% on Friday.
2.22pm: Bond yields tumble on US job miss
UK bond yields have reversed on a jump in the wake of Wednesday’s Budget as US rates also dropped on far weaker than expected job figures across the Atlantic.
UK 10-year gilt yields fell to 4.44% in the aftermath of the figures, which showed 12,000 jobs were added to the US economy last month, against expectations for 100,000.
Rates on the benchmark bonds had surged as high as 4.51%, indicating a sell-off, following news of a string of tax hikes and borrowing commitments in this week’s Budget, with the drop on Friday largely wiping off Thursday’s rise.
US ten-year treasury yields retreated a whole 10 basis points in the meantime following the jobs figures.
“It does highlight how the US is the centre of the financial world, and the Fed is the central banker to the world,” XTB analyst Kathleen Brooks noted.
“If the Fed talks dovish next week, then this could help UK yields to recover further.”
2.09pm: Hefty US jobs miss opens door for further rate cuts
Figures showing the US economy added just 12,000 jobs last month have opened the door for further interest rate cuts by the Federal Reserve, analysts say.
Though markets had been expecting the addition of 100,000 jobs, hurricanes Milton and Helen, strikes at the likes of Boeing and pre-election uncertainty were said to have all weighed.
ING Economics analysts highlighted the lower figure reflected this wide range of factors, but noted the Federal Reserve had now been left with more room to cut rates.
“The trend in hiring is obviously slowing and with the inflation backdrop looking less threatening,” ING said.
“The Federal Reserve clearly has scope to move policy closer to neutral.”
Unemployment remained at 4.1% month on month, the figures from the Bureau of Labor Statistics also showed.
The Dow Jones gained 0.7% as a result early on Friday, while the Nasdaq and S&P 500 climbed by 0.9% and 0.7%.
1.50pm: FTSE 100 up 77 as US markets open higher
FTSE 100 has pushed on after lunch after a good opening on US markets despite a shock US monthly jobs number.
Dow Jones, Nasdaq and the S&P all opened in the green after the US economy added only 12,000 jobs in October compared to expectations of more than 110,000.
Nervousness ahead of Tuesday's US Presidential election was being cited for the undershoot.
Here in the UK, Friday is turning into a good day with the FTSE 100 up 77 points at 8,178.
1.04pm: Reckitt got 'best-case' outcome in latest infant formula trial, says Barclays
Reckitt Benckiser was top of the Footsie risers following a favourable ruling in a case about its infant formula NEC.
Analysts at Barclays said the outcome in the Whitfield trial in Missouri was the 'best-case scenario' result as all the liability claims were dismissed.
Plaintiffs were seeking $6 billion of damages, with Barclays stating that ahead of the verdict investors were building in a substantial damages award against the company and its subsidiary AMV.
The bank noted that this is the first legal victory for the defendants, having previously lost the Watson and Gill trials and strengthened their position in any settlement negotiation.
Reckitt shares rose 8.75% to 5,094p helping Footsie notch up a gain of 68 at 8,178.
12.30pm: Wall Street seen in positive mood ahead of jobs figures
Wall Street appeared on course for a positive start on Friday as traders awaited the latest labour department non-farm payroll and unemployment figures.
Futures had the Nasdaq climbing 0.5% ahead of the opening bell, while the S&P 500 and Dow Jones were seen 0.4% and 0.3% higher respectively.
Friday is set to see the final release of jobs data, and insight into the health of the US economy, before next week’s presidential election.
Markets are expecting around 100,000 jobs to have been added across the economy in October, against 254,000 a month earlier, while unemployment is estimated to remain at 4.1%.
“Hurricanes and the Boeing strike are likely to sway these numbers, so traders may look through them,” XTB analyst Kathleen Brooks noted.
“They also might not meaningfully impact next week’s Federal Reserve decision.”
Oil giants Chevron Corporation and Exxon Mobil Corp closed off a busy week of reporting on Friday meanwhile, with shares in each climbing over 1.8% after both beat estimates.
Profit for Exxon Mobil sat at US$8.6 billion over the third quarter, with the figure sitting at US$4.5 billion for Chevron.
11.50am: Lower manufacturing costs support case for rate cut - analysts
Though S&P Global’s manufacturing PMI showed activity across the sector contracted in October, news of subsiding inflation represented a positive, EY ITEM Club analysts say.
“There were nonetheless some positive signs on the costs front, with a substantial decline in the balance for input costs,” analysts noted following the report from S&P.
This had shown its manufacturing index falling into contraction territory for the first time since April, as a reduction in new orders caused output to slow ahead of the Budget.
EY highlighted falling costs across the industry’s three major sub-sectors though, noting signs of easing price pressures continued to support its view that the Bank of England would cut base interest by 0.25% from 5.00% in next week’s meeting.
11.26am: Gold falls further after biggest slip since July
Gold receded further from its latest record on Friday, falling by 1% to US$2,752 an ounce over the course of the morning.
The yellow metal had faced its largest daily decline since July on Thursday after Wednesday saw a new all-time high of US$2,792.
Saxo Strategy Team analysts noted the drop had reflected “profit taking” on the back of less dovish commentary coming from the Federal Reserve.
“This shift, following a string of strong US economic data, temporarily removed focus from political concerns - including Trump's policies and their potential effects on debt and inflation,” analysts said.
10.39am: Airline shares dampened as oil recovers
Airlines shares faced a blow on Friday as growing oil prices dampened the prospect of cheaper fuel costs ahead.
Ryanair Holdings PLC (LSE:RYA) and Wizz Air Holdings PLC (AIM:WIZZ) fell almost 2.0% respectively early on, while British Airways owner International Consolidated Airlines Group SA (LSE:IAG) dipped 1.1% and easyJet PLC dropped by just over 1.0%.
Carriers had climbed earlier in the week as oil prices slumped, raising hopes for cheaper fuel costs ahead.
This had been driven by speculation tensions in the Middle East hit a climax following Israel’s weekend strike against Iranian military targets.
News of a drop in US crude inventories and reports the OPEC+ cartel could delay planned output increases have seen oil partially recover in recent days, alongside rumours Iran was preparing a response to Israel’s attack.
Benchmark Brent crude was trading at US$74.26 a barrel on Friday, after stooping as low as US$70.74 earlier in the week.
9.45am: Manufacturing activity falls into contraction territory
Activity across Britain's manufacturing sector fell into contraction territory for the first time in six months in October as uncertainty around the Budget struck.
S&P Global reported on Friday that its manufacturing purchasing managers index (PMI) fell to 49.9 this month, from 51.5 in September.
This marked the first time the index had sat below the neutral 50-point mark since April, as a reduction in new orders caused output to slow.
“UK manufacturing started the final quarter of the year on an uncertain footing amid speculation on government policies ahead of the Budget,” S&P director Rob Dobson said.
“This domestic headwind, combined with an ongoing loss of export business, led to the first outright contraction in new work intakes since April.”
Output ticked up in the consumer and investment goods sector, S&P added, but fell in the intermediate goods category.
Confidence among businesses recovered “slightly” from a nine-month low in September in the meantime, while inflation across the sector subsided to a ten-month low.
“This may provide some headroom for policymakers to support growth if demand weakens,” Dobson added.
“The November PMI will be especially keenly anticipated to see the near-term impact of the Budget on business conditions and in particular the effect on confidence.”
9.21am: Schroders climbs on Singapore partnership
Schroders PLC (LSE:SDR) sat among the FTSE 100’s risers on Friday after unveiling a partnership with Singapore-based ANEXT Bank.
ANEXT Bank will add a range of Schroders-managed investment funds to its product suite under the deal, aimed at offering micro, small and medium enterprises access to investment, the duo said.
“We are excited to partner with ANEXT Bank to better serve this dynamic client segment,” Schroders Singapore chief executive Lily Choh commented.
Shares climbed 3.2% on Friday.
9.05am: BP, Shell lifted as oil regains
FTSE 100 heavyweights BP PLC (LSE:BP.) and Shell PLC (LSE:SHEL, NYSE:SHEL) ticked up on Friday as oil prices continued to regain ground.
Benchmark Brent crude was trading at US$74.67 a barrel on Friday morning, having recovered from a low point of US$70.74 earlier in the week.
This followed news US crude inventories fell more than expected last week on strengthening demand, alongside reports the OPEC+ cartel could delay planned increases to output due later this year.
Rumours also circulated that Iran was preparing a response to Israel’s strike on military targets last weekend, according to Swissquote analyst Ipek Ozkardeskaya.
Oil had slumped earlier in the week in the wake of the attack, which prompted speculation that tensions in the region had reached a climax.
Shell climbed by 1.4% and BP ticked up 1.3% on Friday, aiding a 36-point climb for the FTSE 100 to 8,146.
8.53am: Government borrowing costs remain inflated after Budget
Bond yields fell slightly on Friday morning from a high point for the year but remained inflated in the wake of the Budget earlier this week.
UK 10-year gilt yields sat a 4.46% on Friday morning, having hit their highest point of the year above the 4.52% mark on Thursday.
This follows large borrowing commitments laid out by chancellor Rachel Reeves in the Budget on Wednesday, with speculation over such a move before the statement having driven yields from as low as 3.76% in September.
“Unfunded borrowing to invest is seemingly treated the same way as unfunded tax cuts,” XTB analyst Kathleen Brooks noted.
“Higher public spending is not what investors want to see. They do not want the public sector to crowd out the private sector, and they also don’t like tax burdens that are so high they threaten future growth rates.”
8.30am: Reckitt Benckiser surges after being cleared in latest baby formula trial
Reckitt Benckiser Group PLC (LSE:RKT, ETR:3RB) jumped over 10% on Friday morning following news the consumer group had been cleared in a trial on disease risks related to baby formula.
A court in Missouri on Thursday rejected claims that formula made by Reckitts’ Mead Johnson division, alongside Abbott, caused inflammation of the bowel, or necrotizing enterocolitis, which can require invasive surgery.
Plaintiffs had argued Reckitt and Abbott knew of the risks but withheld information.
The case had related to the one infant, with over 1,000 similar suits still pending against the companies.
Reckitt shares climbed 10.7% to 5,186p on Friday.
8.16am: Boohoo surges as Debenhams boss promoted to chief executive
Boohoo Group PLC (AIM:BOO) gained over 3% on Friday morning after announcing Dan Finley, the current head of its Debenhams, had been appointed as chief executive.
Finley succeeds John Lyttle, who announced his retirement in October.
The news will be given a cold reception from minority shareholder Frasers Group PLC (LSE:FRAS), which has petitioned for its founder Mike Ashley to be given the role… Read more
Shares climbed by 3.2% to 30.56p.
8.10am: Boeing workers to vote on new union-endorsed offer
Striking Boeing Co (NYSE:BA, ETR:BCO) workers have been offered a new deal from the aircraft manufacturer for a 38% pay rise over the next four years after their union backed the deal.
The International Association of Machinists and Aerospace Workers (IAM) said the roughly 33,000 striking workers will be balloted on Monday, after walking out in mid-September.
“It is time for our members to lock in these gains and confidently declare victory,” IAM said on social media.
“We believe asking members to stay on strike longer wouldn't be right as we have achieved so much success.”
The strike, by workers in the Seattle region, has brought production of Boeing's bestselling 737s to a standstill, adding to mounting issues for the plane maker this year... Read more
7.40am: House price growth slows in October
House prices climbed by less than expected last month and barely grew against September, Nationwide has reported.
Nationwide’s house price index ticked up just 0.1% in October on a seasonally adjusted basis, missing expectations for a 0.3% increase.
Growth slowed on an annual basis, with prices increasing by 2.4% in the year to October and slowing against the 3.2% climb recorded in September.
This took the average price of a house in the UK to £265,738.
Nationwide economist Robert Gardner noted the housing market “remained relatively resilient” as solid labour market conditions have helped “underpin a steady rise in activity” this year.
“Providing the economy continues to recover steadily, as we expect, housing market activity is likely to continue to strengthen gradually as affordability constraints ease through a combination of modestly lower interest rates and earnings outpacing house price growth,” he added.
An end to increased stamp duty nil-rate thresholds next March is set to lead to a jump in housing transactions early next year, Gardner said, before prompting weakness later on.
7.18am: Stocks seen lower
Futures had the FTSE 100 falling by another 5 points to 8,133 ahead of Friday’s trading, adding to steady declines seen since Wednesday’s Budget.
London’s blue chips had shed 49 points over the course of Thursday’s trading, taking the index’s fall over the course of October to 166 points.
Bond had faced a sell-off in the meantime, with the yield on 10-year UK gilts surpassing the 4.50% mark on Thursday evening before receding back slightly to 4.46% come the morning.
Overnight, Asian markets were largely in the red, with Japan’s Nikkei down 2.6% and leading the fall.
In the US, Apple shares were down 1.9% in pre-market trading, while Microsoft ticked up 0.6% after both reported on their third quarters on Thursday night.
Back in London, attention early on Friday is on house price data from Nationwide, which showed little change between September and October.