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FTSE 100 index closes slightly ahead but Wall Street shares lower despite jobs report

Wall Street was lagging despite the jobs report as traders were fearful about the heightened tensions with China

Standard Life Aberdeen PLC -
You may now unfasten your safety belts
  • FTSE 100 index closes up five points
  • US non-farm payrolls rise by 1.76mln in July
  • US indices in the red

5.15pm: FTSE closes slighly up

FTSE 100 index closed marginally ahead on Friday, while US stocks were under pressure.

Britain's blue-chip benchmark finished the day up around five points or 0.09% at 6,032. Over the week as a whole, the index added around 2.2%.

"European stocks are fractionally higher this afternoon as the US non-farm payrolls report was well-received," noted analyst David Madden, at CMC Markets, adding that the report showed that the jobs market was recovering.

Wall Street was lagging despite the jobs report as traders were fearful about the heightened tensions with China.

Gold lost around 1.48% to US$2,038 an ounce, while the pound was down 0.72% against the US dollar.

US and Canada 4.30pm/11.30 EST

Wall Street shares were seeing red in early deals. The Dow Jones Industrial Average  shed over 43 at 27,343. The S&P 500 lost 0,14 at 3,349. The tech heavy Nasdaq was off around four points at 11,103. In Canada and Toronto, the S&P/TSX index shed around 26 at 16,553.

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CytoDyn (OTCQB:CYDY) seeks UK approval for its flagship drug leronlimab for HIV and coronavirus

Silvercorp Metals (NSYEAMERICAN:SVM) (TSX:SVM) reports increased revenue and net income in first quarter, lower production costs

Nomad Royalty Company (TSE:NSR) (OTCQX:NSRXF) posts strong revenue from a growing portfolio of global assets in its inaugural quarter

2.45pm: US indices open lower

US indices – even the NASDAQ Composite – opened lower as economist picked out the bones from the US jobs report for July.

The Dow Jones was down 129 points (0.5%) at 27,258; the S&P 500 was 11 points (0.3%) lower and the NASDAQ Composite was 38 points (0.3%) weaker at 11,072.

Jobs numbers for July were better than expected but having seen the figure come in higher than expected pundits started looking for reasons to be fearful (part III), such as the fact that the employment picture is improving at a slower pace than in recent months.

“The non-farm payroll report confirmed economic data is plateauing and that the third quarter rebound everyone expected is not happening. The labour market did not deteriorate and risky assets along with the dollar initially rallied after the upward surprise in payrolls. Many traders were expecting a possible negative print, but that pessimism will only move to next month as that report will include much of the slowdown that stemmed from the virus resurgence in the second-wave states,” opined OANDA’s Edward Moya.

Meanwhile, politicians in Washington are doing what they do best (no, not that practice involving brown paper bags) and haggling endlessly, in this case over the stimulus measures to get the US economy through the next phase of the coronavirus pandemic.

“The two sides remain far apart on what size the package should be. The summer recess is due to start today,” noted GAINCapital’s Fiona Cincotta.

Back here in Blighty, the hot weather seems to have made the market torpid. The FTSE 100 was down 11 points (0.0%) at 6,025.

2.10pm: Mixed feeling about Is jobs numbers

Better-than-expected US jobs figures for July do not look as if they will persuade investors to chase stock prices higher.

Spread betting quotes suggest the Dow Jones industrial average will open at around 27,310, down 77 points from last night’s close.

The S&P 500 is seen opening at 3,338, down 11 points.

The NASDAQ Composite is, of course, a whole different kettle of fish and it is expected to open at around 11,226, up 118 points.The US economy added 1.76mln jobs in July, which was a bit better than the 1.6mln economists had been expecting.

In London, the FTSE 100 showed a positive but modest reaction to the numbers initially but is now back in the red, down 9 points (0.2%) at 6,017.


 

1.40pm: A slight "beat" on the US jobs numbers

The US non-farm payrolls number rose by 1.76mln in July, after rising by 4.79mln in June.

The consensus forecast had been for an increase of 1.6mln.

The unemployment rate fell to 10.2% from 11.1% in June; economists had pencilled in a figure of 10.6% for the July unemployment rate.

In London, the Footsie roused itself in the wake of the US jobs figures to stagger into positive territory – just. The index was up 2 points (0.0%) at 6,029.

 

 

12.20pm: Footsie falls foul of furlough fears

At the beginning of 2020, practically the only people who had an idea what the term “furlough” meant were those who watched old black & white films about the US army.

Now, most of us have got used to the term and some of us have even got used to being on furlough but not for much longer, the way things are shaping up.

“Both Rishi Sunak and the BoE governor Andrew Bailey have put their support behind the current plan to end the furlough scheme in October, with UK stocks in the firing line as a result,” said IG’s Joshua Mahony.

“With the furlough scheme now likely to end before a vaccine can be found to fully reopen the economy, we are staring at a likely spike in unemployment and bankruptcy. With such an economic jolt due on just two-months’ time, it comes as no surprise to see the UK banks under pressure this morning,” Mahony said.

Lloyds Banking Group PLC (LON:LLOY) was down 2.3% at 27.5p and sector peer Barclays PLC (LON:BARC) was 2.2% lower at 103.65p.

Some recent analysis suggested the well-off are building up their savings during lockdown while the poor are running them down, which (at the risk of sounding callous) bodes well for wealth management outfit Hargreaves Lansdown PLC (LON:HL.), which published its full-year results today.

The unit trusts supermarket does not seem to have suffered too much from the flak it attracted for being arguably a bit too keen to promote the Woodford Equity Income fund on its site. The fund that traded on the name of former star stock-picker Neil Woodford, was wound up in October of last year.

READ: Hargreaves Lansdown may have 'case to answer' over Woodford says law firm

The FTSE 100 firm added a net 188,000 new clients over the year to take its total to 1.4mln. New business increased by 5% to £7.7bn while assets under management rose by a similar percentage to £104bn.

The shares were up 4.9% at 1,914.5p, helping limit the FTSE 100's loss to 3 points at 6,024.

11.15am: Gentle backsliding

Rather like many people’s resolution to use the lockdown to “get things done”, London’d equity market is experiencing a bit of backsliding.

The FTSE 100 was down 12 points (0.2%) at 6,015.

Rolls-Royce Holdings PLC (LON:RR.) shares shed 2.7% at 246.2p following reports that hedge fund, ValueAct, which held almost 10% of the aerospace engineer’s share, has sold down its entire stake.

Oil giants BP PLC (LON:BP.) and Royal Dutch Shell PLC (LON:RDSB) were weighing down the index as the oil price drifts lower.

BP was off 2.8% at 287p and Shell 1.9% at 1,114.8p as the price of Brent crude on futures markets fell 34 cents (0.8%) to US$44.75 a barrel.

Moving from oil to bricks and mortar, according to mortgage lender the Halifax, house prices in the UK were 1.6% higher in July than they were in June and 3.8% higher than they were in July of last year.

The average house price was £241,604 – enough for the proverbial broom cupboard in Belgravia and a mansion in [insert post-industrial wasteland town of your choice here].

“Following four months of decline, average house prices in July experienced their greatest month on month increase this year, up 1.6% from June and comfortably offsetting losses in 2020. The average house price in July is the highest it has ever been since the Halifax House Price Index began [in January 1983],” said Russell Galley, Halifax’s managing director.

“However, looking further ahead, there is still a great deal of uncertainty around the lasting impact of the pandemic. As government support measures come to an end, the resulting impact on the macroeconomic environment, and in turn, the housing market will start to become more apparent.

“In particular, a weakening in labour market conditions would lead us to expect greater downward pressure on prices in the medium-term,” Galley added.

9.35am: Traders sit on their hands

As is often the case on the day of the release of the monthly US jobs numbers, traders are sittig on their hands.

The FTSE 100 was barely changed – down a point – at 6,025.

“The European markets surprisingly kept their cool on Friday morning, despite Donald Trump effectively banning TikTok and WeChat in the United States,” said Spreadex’s Connor Campbell. “Giving companies 45 days to end all transactions with ByteDance and Tencent – the respective owners of the China-based apps – the President lobbed another tech grenade in his cold war with Beijing, almost guaranteeing some kind of retaliation from the rival superpower,” he added.

A different sort of technology - the rapid saliva-based coronavirus antigen test Avacta Group PLC (LON:AVCT) is developing with a firm called Cytiva – was occupying the thoughts of Avacta shareholders.

The company’s shares rose 3.7% to 139p after the medtech firm said it would hook-up with the Liverpool School of Tropical Medicine to clinically validate the test.

Going the other way was sector peer, Shield Therapeutics PLC (LON:STX), which was down 13% at 110p, giving back some of yesterday’s succulent gains.

The shares soared yesterday after the company revisited analysis of the AEGIS-H2H study of its Ferracru/Accrufer candidate and resolved some anomalies seen in the original analysis.

 

8.50am: Slow start to proceedings

The FTSE 100 made a slow start to proceedings on Friday with traders keeping their powder dry ahead of US job numbers.

The index of UK blue-chips receded 10 points to 6,017.01 in early trading.

The monthly US non-farm payrolls have been on something of a roller coaster since February, making the July data hard to guess.

The consensus is for 1.5mln people to have been added to America’s workforce, though the number could be half that, economists said.

Closer to home, the pressure is growing on chancellor Rishi Sunak to extend the employment furlough scheme in order to stave off mass unemployment this side of the Atlantic.

The Bank of England warned on Thursday that the jobless total is likely to rise significantly between now and the end of the year, with output falling sharply in that period.

Adding to the uncertainty for markets was Donald Trump’s move to prohibit US firms from doing business with TikTok and WeChat due to national security concerns.

“Trump’s growing attack on Chinese tech sent Asian stock indices lower on Friday, as the escalating tensions between the US and China also threatens the trade agreement that the two countries spent two years getting signed,” said Ipek Ozkardeskaya, analyst at Swissquote Bank.

Turning to the Footsie, Hikma’s (LON:HIK) stock opened 7.3% higher after the drugs firm raised its dividend (unprecedented these days) after a strong commercial showing off the back of increased coronavirus demand for its injectable products.

Rightmove (LON:RMV) jumped 4% after reporting a rebound in demand for its online estate agency services after an earlier government-enforced hiatus. Clearly, the cut to stamp duty is having the required effect.

A ‘tepid’ start to the second half saw shares in the inter-dealer broker TP ICAP (LON:TCAP) fell 7.9%, and lockdown worries haunted Cineworld (LON:CINE), which fell 5%.

Proactive news headlines:

Newmark Security PLC (LON:NWT) has announced two new customer wins for its Human Capital Management (HCM) division in the United States, branded GT Clocks. The US business has landed a deal for its GT-4 timeclock product with one new client, a healthcare management firm which provides human resources and payroll solutions that works with more than 30,000 businesses. It is a three-year contract and has a minimum value of US$1mln over that period. The other contract win is with an existing customer to provide the company's flagship device, the GT-10, to one of the largest retailers in the US. Newmark estimates it could potentially worth US$3.8mln over the next 2-3 years.

Adamas Finance Asia Limited (LON:ADAM) said portfolio company, Future Metal Holdings Limited successfully completed its Mining Licence renewal on August 6, 2020, after securing all necessary approvals from the local Ministry of Natural Resources in China. The renewed Mining Licence has a validity period of three years and permits a maximum annual dolomite production capacity of 300,000 tonnes, the group noted. FMHL is a natural resources company which operates an open-pit dolomite quarry in Shanxi Province, China.

SIMEC Atlantis Energy Limited (LON:SAE) said it has now signed a heads of terms agreement concerning the joint venture (JV) it announced yesterday. The JV, NPA Fuels Limited, is with N&P Holding 2 Ltd, a wholly-owned subsidiary of the Dutch recycling specialists, the N+P Group. The NPA JV will principally be involved in the marketing, production and delivery of waste-derived fuel pellets to converted coalfired power stations throughout the UK, and in particular the Uskmouth project.

IQ-AI Ltd (LON:IQAI), the neuroimaging specialist, has said treatment priorities are returning to something approaching normal following the disruption caused by the coronavirus (COVID-19) pandemic. “The company has entered an exciting phase in its development, and we look forward to updating shareholders as events unfold,” Trevor Brown, the company’s chief executive told investors in IQ-AI's half-year report. Despite the challenges presented by the COVID-19 pandemic, the company maintained its momentum in the first half of 2020. It said the most notable feature of the half-year was the artificial intelligence development work underway to fully automate the processing and display of its subsidiary, Imaging Biometrics’ (IB) quantitative biomarkers for brain tumour assessment.

OKYO Limited (LON:OKYO), which is developing treatments for dry eye disease and chronic pain, has appointed one of America’s leading eye surgeons to head its scientific advisory board. He is Dr A James Khodabakhsh, the medical director of the Beverly Hills Institute of Ophthalmology and chief of ophthalmology at the Cedars Sinai Medical Centre. His remit is to bring together a small group of leaders in the field to “review and inform” the company’s plans to progress its lead product candidate, Chemerin, to the investigational new drug stage for dry-eye disease.

SDX Energy PLC (LON:SDX), the MENA-focused oil and gas company, has announced that as a result of Cantor Fitzgerald Europe closing certain elements of its corporate finance function, its corporate brokers are now Stifel Nicolaus Europe Limited and Peel Hunt LLP. The company's Nominated Adviser will continue to be Stifel Nicolaus Europe Limited.

Feedback PLC (LON:FDBK), the specialist medical imaging technology company, announced that it has granted options over 13,498,748 new ordinary shares, representing 1.27% of the company's issued share capital, to its CEO, Tom Oakley. The CEO Options are exercisable at a price of 1.2p at any time up to the tenth anniversary of the date of grant.  One-third of the CEO Options vest immediately, one-third will vest one year from date of grant and the balance will vest two years from the date of the grant. Oakley now hold options over 22,820,829 Feedback ordinary shares, equivalent to 2.14 % of the company's voting rights. In total 60,330,829 options are now outstanding, representing approximately 5.65% of the company's current issued share capital.

APQ Global Limited (LON:APQ), an emerging markets growth company based in Guernsey, said it has issued a total of 26,578 ordinary shares of no par value in the capital of the company to employees as part of the 2018 management share-based compensation scheme, including to its chief executive officer, Bart Turtelboom, who has received 23,366 ordinary shares. The price used in calculating the number of shares awarded under the 2018 Scheme was the book value per share as at December 31, 2017, of 128.11 US cents. Following this issue, Turtelboom is interested in 22,238,659 ordinary shares in the company representing 28.39% of the issued share capital.

Coinsilium Group Limited (AQSE:COIN) the Blockchain, DeFi and Crypto Finance venture operator, has announced the release of a new investor presentation covering its recently announced DeFi Strategy, together with further details of the company's operational activities in the sector. A Pdf version of this presentation entitled 'The New Crypto Finance Opportunity' can be downloaded from the Coinsilium website via the following link: https://coinsilium.com/investors/presentations. To accompany the presentation, a video run-through hosted by Coinsilium's chairman Malcolm Palle and chief executive Eddy Travia is available for investors. The video is available in full on YouTube via the following link: https://youtu.be/IZkOwjZ9MU4. Palle commented: "With the forthcoming launch of our new DeFi Strategy we are now moving into a period of intense activity. Investor awareness and engagement is of critical importance in this process as we work to ensure a greater understanding of the scale of the opportunity that lies ahead for Coinsilium and where the Company is positioned with its global partner network at the forefront of this exciting new space. We will continue to build our investor engagement throughout this period with enhanced marketing & communications initiatives and we look forward to providing further updates to the market over the coming weeks and month."

Amryt Pharma PLC (LON:AMYT) (NASDAQ:AMYT), a global, commercial-stage biopharmaceutical company dedicated to developing and commercializing novel therapeutics to treat patients suffering from serious and life-threatening rare diseases, has announced that it will present at the Canaccord Genuity Virtual 40th Annual Growth Conference on August 13, 2020. The presentation will be broadcast live at 3pm (ET) / 8pm (BST). Investors can access the webcast via the following link: http://wsw.com/webcast/canaccord42/amyr/

6.50am: Dull end to the week expected

The FTSE 100 index is expected to open cautiously lower on Friday ahead of the release of US jobs numbers for July due this afternoon.

Simmering tensions between the US and China are also undercutting sentiment. According to spread betting quotes, the UK blue-chip index is set to open around 14 points lower at 6,013.

Traders have some news from China to chew on, where exports grew more than economists had expected in July.

China's exports were up 7.2% year-on-year after rising just 0.5% in June. Economists had pencilled in a 0.6% decrease for July. Meanwhile, Imports were down 1.4% from a year earlier after rising 2.7% in June; economists had expected growth of 1.0%.

“Looking at the details of exports by item, we see that there is an overall improvement in exports in July from June, not just medical supplies which had previously been the main contributor to export growth. Back in June, we already saw some monthly improvement in demand for textiles and garments. This July data shows that there have also been improvements in electronic parts, handsets, computers, clothing, and automobiles,” said Iris Pang, the chief economist covering Greater China at ING.

“But the jump in external demand in July may not last long because some Covid-19 clusters have emerged since late July, as caution was relaxed too early in some places,” Pang added.

US indices had a decent day yesterday after an iffy start, with the Dow Jones Industrials Average advancing 185 points to close at 27,387 and the S&P 500 rising 21 points to 3,349.

The official July US non-farm payrolls will be on investors’ minds today following Wednesday's ADP numbers, which showed that private payrolls increased 167,000 in July, well short of predictions of 1mln, indicating that US economic growth is slowing amid the renewed surge in coronavirus (COVID-19) cases.

After losing 22mln jobs between February and April as lockdowns forced businesses to close and lay off workers, before reopening through May and June allowed nearly 8mln of those jobs to come back, the US economy is still an almighty jobs deficit, according to the economists at ING.

“We are more cautious than the market though and look for a figure closer to 750,000 versus the current consensus of 1.5mln,” they said.

Markets in China this morning have been soft with Tokyo’s Nikkei 225 down 130 points at 22,288 and Hong Kong’s Hang Seng 468 points lower at 24,463.

On the corporate news front in London, the big hitters today are Standard Life Aberdeen PLC (LON:SLA) and house listing site Rightmove PLC (LON:RMV) as well as final results from Hargreaves Lansdown PLC (LON:HL.).

Around the markets:

  • Sterling: US$1.3114, down 0.29 cents
  • 10-year gilt: yielding 0.109%, down 2.29 basis points
  • Gold: US$2,065.70 an ounce, down US$3.70
  • Brent crude: US$44.94 a barrel, down 15 cents
  • Bitcoin: US$11,775, down US$78

6.45am: Early Markets - Asia/Australia

Stocks in the Asia Pacific region were mostly lower on Friday as investors await several economic data releases for July.

In China, the Shanghai Composite was down 0.56% while Hong Kong’s Hang Seng index dipped 0.55%. Japan's Nikkei 225 slipped 0.19% but South Korea’s Kospi advanced 0.3%.

Shares in Australia dipped, with the S&P/ASX 200 shedding 0.34% after the nation’s central bank revised up the unemployment rate to a peak of 10% in December 2020.

READ OUR ASX REPORT FOR MORE INFORMATION

Proactive Australia news:

Pantoro Ltd (ASX:PNR) is raising $55 million in capital which will place the company in a strong financial position as it accelerates activities at its 50%-owned Norseman Gold Project in Western Australia.

MGC Pharmaceuticals Ltd (ASX:MXC) (OTCMKTS:MGCLF) has surged 41% this morning after results from pre-clinical in-vitro laboratory tests which have shown effective immunological activity for the use of ArtemiC as an immune-modulatory agent for the treatment of COVID-19.

Predictive Discovery Ltd (ASX:PDI) is higher after returning results of up 26 metres at 17.5 g/t gold from 58 metres in reverse circulation (RC) drilling on the southern section of the NE Bankan gold mineralised system within its flagship Kaninko Project, in Guinea, West Africa.

Kazia Therapeutics Ltd (ASX:KZA) (NASDAQ:KZIA) has surged on being granted Rare Pediatric Disease Designation (RPDD) by the US FDA for its paxalisib for the treatment of DIPG, a rare and highly aggressive childhood brain cancer.

Horizon Minerals Ltd (ASX:HRZ) has completed the initial milling campaign from the first stage of its Boorara Gold Mine in Western Australia, generating $2.93 million in revenue.

Tempus Resources Ltd (ASX:TMR) has a new substantial shareholder in prolific global gold investor Sprott Asset Management USA which has a 5.12% interest.

Zelira Therapeutics Ltd (ASX:ZLD) (OTCQB:ZLDAF) is one of three companies set to present at Proactive's medical cannabis focussed webinar on Tuesday, August 11, along with MGC Pharmaceuticals Ltd (ASX:MXC) and Southern Cannabis Holdings.

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