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FTSE 100 squeaks out a positive day thanks to strong afternoon showing

Rolls-Royce Holdings plc had another bad day after announcing plans this week to raise £3 billion in funding

President Trump
  • FTSE 100 closes up 22 points
  • President Trump tests positive for COVID-19
  • US non-farm payrolls increase by 661,000

5pm: FTSE 100 rights the ship

The FTSE 100 benchmark index surged in afternoon trading, doing just enough to finish above the flatline. The index improved by 22 points, 0.4%, to 5,902.1. The FTSE 250's margin was even slimmer, ending the day 12 points up, less than 0.1%, at 17,395.8.

For most of the day, markets weren't especially rosy. 

"Dealers have been in risk-off mode today on the back of the Trump news," CMC Markets Uk analyst David Madden wrote Friday. "The jobs data from the US was mixed so that didn’t sway sentiment that much. Stocks are in the red but they are off the lows of the session."

Rolls-Royce Holdings PLC (LON:RR.) had another bad day after announcing plans this week to raise £3 billion in funding. Shares of the company slipped 2.7% to £113.60.

In the US, the Dow and other US indices were still in the red following President Trump's positive coronavirus test and a jobs report that failed to live up to expectations, but a siliver lining has emerged for traders in the form of a potential deal that would provide relief to airline workers. 

After opening 200 points in the red, the Dow was down just 37 points, 0.1% to 27,779.8. The Nasdaq was 173 points lower at 11,152.8, and the S&P 500 was 17 points below even, 0.5%, at 3,363.1.

House Speaker Nancy Pelosi called on the industry to shelve furloughs for the time being, calling a deal "imminent," according to CNBC. 

Delta AIr Lines Inc (NYSE:DAL), American Airlines Group Inc (NASDAQ:AAL), Southwest Airlines Co and JetBlue Airlines Corporation (NASDAQ:JBLU) all saw stock growth of at least 2%.

Trump becoming infected with COVID-19 could also add a greater sense of urgency to get a deal done regarding a broader coronavirus stimulus deal, Pelosi said. 

“This kind of changes the dynamic because here they see the reality of what we have been saying all along,” Pelosi said Friday on MSNBC. “I’m optimistic, I’m always optimistic. We always have to find a path, that is our responsibility to do so ... We’ll find our middle ground. We’re legislators. We’ll get the job done.”

4pm: Proactive North America headlines:

NexTech AR Solutions Corp (CSE:NTAR) (OTCQB:NEXCF) adds Ryerson University professor Dr David Cramb to its board, bringing total number of seats to five

Humanigen Inc (NASDAQ:HGEN) gets positive feedback from FDA ahead of emergency use application for coronavirus drug lenzilumab

Medallion Resources Ltd (CVE:MDL) (OTCPINK:MLLOF) gets cash boost of C$741,000 from warrant and option exercise in latest quarter

Auryn Resourcess Inc (TSE:AUG) (NYSEAMERICAN:AUG) and Eastmain Resources say shareholders back plan to form Fury Gold Mines

Co-Diagnostics Inc (NASDAQ:CODX) (FRA:C97) says its Logix Smart kit to be used with saline oral rinse COVID-19 RT-PCR test

American Manganese Inc (CVE:AMY) (OTCMKT:AMYZF) welcomes President Trump's executive order to protect domestic mining industry

HIRE Technologies Inc (CVE:HIRE) is reinventing the recruitment process using a technology-driven approach to human resources

3.30pm: Dow opens 200 points down in the US

The DJIA started the day 206 points, 0.7%, lower after the bombshell news overnight that President Trump and First Lady Melania Trump both tested positive for the coronavirus. 

The Nasdaq fell 139 points to 11,188.2, and the S&P 500 shed 33 points, 0.9%, to 3,349.5.

Adding to the selloff is a jobs report that fell short of expectations. Nonfarm payrolls rose by 661,000 in September, lower than the 800,000 Dow Jones estimate. The unemployment rate delivered better news, clocking in at 7.9% compared to the 8.2% estimate. 

Airlines and cruise companies were among the biggest laggards. Boeing Co (NYSE:BA) dropped 1.9% to $164.55 and Norwegian Cruise Line Holdings Ltd (NCLH:NYSE) declined 3.5% to $16.73.

1.50pm: Equities retreat further after underwhelming US jobs report

London’s leading equities have retreated a bit further after the release of US non-farm payrolls for September.

The FTSE 100 was down 48 points (0.8%) at 5,832.

The number of new people added to US non-farm payrolls was 661,000, which was some way behind most forecasts and way down on August’s 1.49mln increase.

“In the run-up to the election, it is the progress of the virus and the subsequent economic recovery that remain of primary concern. The economic data coming out of the US in the run-up to November 3rd will undoubtedly play a major part in the outcome,” said Robert Alster of Close Brothers Asset Management.

“As cases of COVID-19 climb again, the improvement in employment figures has decelerated and, when it comes to the pandemic, the US is falling further behind its global peers in terms of public health. However, the US economic recovery has restarted quicker than other countries as social restrictions were in place for a shorter period of time.

“Congress has still passed no additional stimulus bill, and progress looks unlikely until after the election. If left with no income support, consumption growth will be hard-won and the lack of further stimulus could endanger the recovery,” he added.

12.15pm: Somebody had to ask ... what if either candidate dies ahead of the election?

Not even the president testing positive seems able to stop the rise of the NASDAQ Composite but the other US indices are set to tumble.

Spread betting quotes indicate the tech-heavy NASDAQ will open 32 points higher ar 11,358.

Ahead of this afternoon’s release of jobs figures for September, the Dow Jones is expected to open 342 points lower at 24,475 while the S&P 500 is stipped to start 49 points lower at 3,332.

“A decent payroll number for September will say nothing about October, which is shaping up soft,” according to Pantheon Macroeconomics.

Its chief economist, Ian Shepherdson, is looking for a print of 950,000.

“If we're right, private payrolls will still be some 10.6mln short of the pre-COVID level, after recovering just over half the peak-to-trough plunge triggered by the pandemic,” Shepherdson said.

“Elsewhere in the report, we see a decent chance of a partial rebound in the unemployment rate, after August's surprisingly huge 1.8 percentage point drop, to 8.4%,” he added.

This morning it was revealed that US President Trump and the first lady tested positive for COVID-19. Trump is set to go into quarantine.

"The big question is how ill he will become and to what extent it will affect his campaigning efforts for the US presidential election,” said Nordic investment bank, Danske Bank.

“Another question is whether other members of his administration have been infected. The uncertainty is hurting risk sentiment,” the bank added.

Rupert Thompson, the chief investment officer at asset management firm, Kingswood, said the presidential infection means that the US election looks even more certain to be a source of volatility for markets over the next month or two.

“Following this week’s Presidential debate, the odds seemed to be moving further in Biden’s favour. Now, however, a new wild-card has been thrown into the pot. While the inevitable increased focus on COVID should work in Biden’s favour, Trump could benefit from a sympathy vote,” Thompson said.

“The news may also impact the economy with COVID sceptics turning more cautious in their behaviour, slowing the recovery. At the same time, it could increase the pressure on Congress to agree a new fiscal stimulus package which, until now, they have failed to do. It was already looking as if markets had entered choppy waters and the latest development just means the waves could be a little larger,” he concluded.

In corporate news, Walmart Inc (NYSE:WMT) has managed to offload its UK supermarket chain, Asda, for £6.8bn.

Meanwhile, London’s FTSE 100 is holding station around the lower level it quickly adopted this morning, shedding 38 points (0.7%) at 5,841.

Traders are doubtless waiting on the non-farm payrolls data, due out at 1.30pm (UK time).

“It’s nonfarm payrolls (NFP) day! The big excitement this afternoon. After Wednesday’s higher-than-expected ADP report, the consensus forecast for the NFP has been creeping up. Before the ADP report came out it was 850k; now it’s 875k,” said Marshall Gittler, an analyst at BDSwiss who, in his daily email, had the courage to ask the question many of us are posing: what happens if Trump dies before the election.

According to reports, the Democratic Party’s presidential candidate, Joe Biden, is set to have a COVID-19 test this morning.

That poses another question but I will wait for Mr Gittler to pose it.
 

10.10am: Risk-off, mask-on

It’s a case of risk-off, masks-on in global stock markets today.

US indices are taking a bath on futures markets following the news that President Trump has tested positive for the coronavirus (COVD-19) but UK investors are more sanguine.

Perhaps UK investors are confident that after a quick injection of Domestos into Trump’s bloodstream, all will be well, or maybe they think they have been mollified by the White House doctor’s assertion that Trump can continue to carry out his duties in his current condition.

That’s great news for golf courses in the Washington area.

Meanwhile, the FTSE 100 is down 34 points (0.6%) at 5,846.

“While yesterday turned out to be a fairly quiet first trading day of Q4, with modest gains for both European and US markets, today is already shaping up to be a more turbulent affair after President Trump tweeted that he, and the First Lady Melania Trump, had tested positive for Covid-19,” said Michael Hewson at CMC Markets.

“The health of US Presidents has always been a hot button issue for financial markets from when Reagan got shot, to when George Bush senior fell ill at a dinner in Japan. This time is no different with market reaction being immediate as US stock futures plunged sharply,” he added.

On the subject of the coronavirus, Scancell Holdings PLC (LON:SCAN), up 11% at 18.625p, was one of the top risers after it revealed Cobra Biologics would manufacture its COVID-19 vaccine ready for a phase I clinical trial.

Elsewhere, this morning has seen some mildly discouraging news from the British Chambers of Commerce (BCC).

The BCC’s Quarterly Economic Survey (QES) found that business conditions remained weak in the third quarter of 2020, despite much of the economy reopening.

READ "Eat out to help out" failed to arrest decline in hospitality sector's sales in the third quarter

 

8.45am: Political uncertainty rattles markets

As Britain braced for its first winter storm, heralding 65mph winds and lashing rain, the FTSE 100 caught a case of the sniffles.

The political uncertainty around the Trump COVID diagnosis didn’t help the mood, while US employment data could sap any nascent positivity if the new jobs number undershoots.

Non-farm payrolls are expected to show the world’s largest economy created 900,000 jobs in September, with the unemployment rate edging down 0.2 percentage points to 8.2%.

With some economists arguing that the US economy and labour market are stalling a bit, a disappointing jobs number could spark a sizeable stock market wobble (Read more here).

On the outlook for the UK market, Richard Hunter, head of markets at Interactive Investor, provided this assessment.

“The Footsie remains fettered by investor insouciance and bleak prospects for the UK economy as a whole, down 23% in the year to date and seemingly unable to break out of its current narrow band,” he said.

“Further countries being added to the UK quarantine list alongside targeted local lockdowns have done little to lighten the mood, with the moves piling further pressure on several already beleaguered sectors.

“Large fundraisings announced by the likes of British Airways owner International Consolidated Airlines and Rolls-Royce are further indications of travel industry in turmoil.”

On the market, it was a ‘bounce-back day’ for the aforementioned IAG (LON:IAG), which led the blue-chip index with a fairly anaemic 1.5% gain. It was of only seven top-flight companies to show forward momentum in the first half-hour of trade.

Rolls-Royce Holdings PLC (LON:RR.), which is in the process of raising £5bn of rescue financing, including £2bn from the market in the form of a hugely discounted, highly diluted rights issue, led the losers with a 5.9% decline.

Melrose Industries PLC (LON:MRO), the owner of fellow aero-engineer GKN, fell 3.5% as it became caught in the downdraught caused by Rolls’ travails.

Egyptian gold-digger Centamin (LON:CEY) achieved almost the impossible feat in this red hot market for the yellow metal – it issued a profit warning.

The stock tanked 20% after Centamin said delays to open-pit mining meant output for the fourth quarter would likely fall to about 70,000 ounces from the 120,000 ounces it produced in the third quarter.

Proactive news headlines

Cobra Biologics will manufacture Scancell Holdings PLC’s (LON:SCLP) COVID-19 vaccine ready for a phase I clinical trial. The agreement covers the good manufacturing practice (GMP) production of plasmid DNA needed to generate the inoculation against SARS-CoV-2.

A drug development firm has been given the green light to take into human trials a treatment for irritable bowel syndrome (IBS) that contains OptiBiotix Health PLC's (LON:OPTI) Lactobacillus Plantarum LPLDL probiotic. The company said Seed Health’s investigational new drug application has been approved by the US Food & Drug Administration, which will allow DS-01 to go straight into phase II clinical trials.

One Media IP Group PLC (LON:OMIP) has now paid the final US$100,000 of the fee for the acquisition of the music catalogue of Philip Wesley. The digital music rights acquirer, publisher and distributor acquired the catalogue of the American composer and solo piano artist a year ago but part of the payment was deferred, as it was dependent on how well the deal panned out.

Falcon Oil & Gas Ltd (LON:FOG) told investors that an 11-stage hydraulic stimulation programme has been completed at part of the Beetaloo shale project in Australia’s Northern Territory. The 11 stages were carried out along the well’s 1,579-metre horizontal section in the Lower Kyalla formation.

Bezant Resources PLC (LON:BZT), the copper-gold exploration and development company, said exploration work has started at the Hope Copper-Gold Project, Namibia. This first phase of work by Bezant will focus on exploration licence EPL5796 hosting the Hope and Gorob-Vendome massive sulphide deposits, part of a combined indicated and inferred mineral resource within three closely spaced deposits of 10.2mln tonnes @ 1.9% Cu (copper) and 0.3 grams per tonne (g/t) Au (gold) at a 0.7% Cu cut-off.

Bahamas Petroleum Company PLC (LON:BPC) has updated investors on licence administration in Trinidad. The company has agreed with state-backed Heritage Petroleum the three-month extension of the contract to December 31 to give Heritage time to obtain requisite consents from the Ministry of Energy and Energy Industries for the implementation of a new 10-year Enhanced Production Sharing Contract (EPSC) agreement.

Westminster Group PLC (LON:WSG) has been notified by holders of its convertible loan notes that they have elected to convert £93,750-worth into 937,500 ordinary shares. This latest conversion further reduces the outstanding CLN amount to £1.5mln with a corresponding reduction in interest charges, the company said.

Brunner Investment Trust PLC PLC (LON:BUT) confirmed that its top 10 shareholdings continue to be led by Microsoft Corp, UnitedHealth Group and Roche Holding AG. 

6.31 am: Dour start predicted 

London's leading shares are set to open on the back foot ahead of the release this afternoon of US jobs figures for September.

Spread betting quotes point to the FTSE 100 opening some 58 points lower at around 5,821.

“A short while ago it was announced that Donald Trump tested positive for COVID-19, so no doubt he will quarantine. This put pressure on US index futures and European indices are called lower,” suggested CMC’s David Madden.

US indices had a reasonably solid day yesterday with the Dow rising 35 points to close at 27,817 and the S&P 500 climbing 18 points to 3,381.

In Asia, Japan's Nikkei 225 was off 19 points at 23,166. Hong Kong was closed for a market holiday.

Other than speculating about what outlandish comment Trump will make about his coronavirus status, traders will be focusing on the US jobs numbers.

Monthly increases in new jobs have been getting smaller in recent months, prompting some economists to argue the US labour market and US economy are stalling a bit, perhaps as a result of fresh local COVID flare-ups and lockdowns.

“By the time the next non-farm payrolls is released, the US election will have passed. That means today's number assumes a greater than usual significance, with a weak number possibly becoming a campaign issue in the absence of a stimulus deal. The same could also be said if the data outperform, with the Republicans using their economic stewardship card to try and close their polling gap. Either way, the data should ensure we have an energetic finish to the week. said Jeffrey Halley, market analyst at Oanda.

August’s initial reading came in at 1.37mln new jobs, with the unemployment rate dropping to 8.4% from 10.2% in July.

The consensus forecast for September's non-farm payrolls is 850K, with the unemployment rate easing to 8.2%.

Around the markets

  • Sterling: US$1.2860, down 0.27 cents
  • 10-year gilt: yielding 0.238%, up 0.6 basis points
  • Gold: US$1,899.20 an ounce, down US$17.10
  • Brent crude: US$40.14 a barrel, down 78 cents
  • Bitcoin: US$10,512, down US$102.

6.45 am: Early Markets: Asia / Australia

Markets in China, Hong Kong, Taiwan, South Korea and India are closed today for holidays.

The other markets in Asia-Pacific mostly declined as oil crude futures dropped nearly 2.9% today on COVID-19 concerns after falling more than 3% on Thursday.

In Japan, the Nikkei 225 shed 0.86% in afternoon trade while Australia’s S&P/ASX 200 fell 1.36%.

Australia’s retail sales data for August fell 4% on a seasonally adjusted basis, according to data from the country’s Bureau of Statistics.

READ OUR ASX REPORT HERE

Proactive Australia news:

TNT Mines Ltd (ASX:TIN) has received high-grade assay results from underground exploration channel sampling at the 100%-owned East Canyon Uranium-Vanadium Project in south-eastern Utah, the US.

Kazia Therapeutics Ltd (ASX:KZA) (NASDAQ:KZIA) has completed the institutional component of its accelerated 1 for 3 non-renounceable entitlement offer of new fully paid ordinary shares at A$0.80 per new share to raise A$16.4 million.

Imugene Ltd (ASX:IMU) (OTCMKTS:IUGNF) has received a Notice of Grant from the United States Patent and Trademark Office for Patent Application 16/292032, which protects its cancer growth factor immunotherapy platform.

Alto Metals Ltd’s (ASX:AME) preliminary test-work of Lord Nelson primary zone mineralisation within the Sandstone Gold Project in WA has returned "excellent" average gold recoveries of 96%.

Mako Gold Ltd (ASX:MKG) has appointed highly experienced mining executive Steve Zaninovich to the board as a non-executive director to support the restructure and evolution of the company.

Oakdale Resources Ltd (ASX:OAR) shares traded 35% higher yesterday to 2.8 cents after announcing the grant of an exploration licence EL 6505 in South Australia’s halloysite-kaolin hotspot on the Eyre Peninsula.

Latin Resources Ltd (ASX:LRS) is entering a transformational joint venture agreement with Argentinian investment group Integra Capital S.A. which will spend up to A$1.4 million to earn a 50% interest in Latin’s Catamarca lithium pegmatite projects in Argentina.

SenSen Networks Ltd (ASX:SNS) (OTCMKTS:SNNSF) achieved an important milestone last month of listing on the OTCQB venture market, which will enable US investors to easily participate in the company’s growth story.

White Rock Minerals Ltd (ASX:WRM) (OTCQX:WRMCF) shares are now trading on the US-based OTCQX Best Market, the highest market tier of OTC Markets on which 11,000 US and global securities trade.

Theta Gold Mines Ltd (ASX:TGM) (OTCMKTS:TGMGF) remains on track to begin gold production from its South African project with trial mining scheduled to begin this quarter.

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