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London open: Stocks gain as investors eye US election, rate announcements
London stocks rose in early trade on Monday as investors eyed a busy week that includes the US presidential election and policy announcements in the UK and across the pond.
At 0845 GMT, the FTSE 100 was up 0.5% at 8,215.17.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “Investors are bracing for a week of potential volatility, with the highly fractious US Presidential election in focus and key interest rate decisions looming. For now, the FTSE 100 has shaken off nervousness and opened in the green, making fresh gains after Friday’s recovery.
“Miners and banks were on the front foot in early trade and energy giants have helped offset wariness by gaining ground of the back of a stronger oil price. The benchmark Brent Crude has extended gains, to trade around $74.5 a barrel after the cartel OPEC+ again delayed plans to increase output for a month.
“As Republicans and Democrats embark on a last-minute surge of campaigning, some of the big Trump ‘plays’ on the markets have lost ground. Investors are reassessing Donald Trump’s chances of re-entering the White House, given polls which emerged over the weekend, indicating Kamala Harris may have gained ground in key battle ground states.
“The dollar has fallen back slightly, as the chances of Trump setting off a fresh tariff frenzy, pushing up inflation and interest rates, seem to have retreated a little. Bitcoin, which had also made strides of progress as markets priced in a Trump win, given his pro-crypto stance, has also continued to dip back. But this election is still far too close to call, so considerable swings in prices are likely as the results ebb in.”
As far as central bank announcements are concerned, Streeter said the chances of borrowing costs coming down in the US this week “look bolted on”, given the much weaker than expected jobs data on Friday.
“Markets are largely expecting a follow up 0.25% cut in December, but will be watching comments from Fed Chair Jerome Powell to back up those expectations,” she added.
The BoE is also widely expected to cut rates by 25 basis points on Thursday.
In equity markets, Frasers Group was the top gainer on the FTSE 100 as RBC Capital Markets upgraded the shares to ‘outperform’ from ‘sector perform’. It said the current valuation fails to discount the likely resilience of its Sports Retail business, its property value and its strategic stakes, for instance in Hugo Boss.
Burberry shot higher after online fashion publication Miss Tweed suggested over the weekend that Italy’s Moncler could be considering a bid for the luxury fashion brand.
Anglo American rose as it announced the A$1.6bn (£0.8bn) sale of a stake in the Jellinbah joint venture in Australia as part of its strategy to exit the steelmaking coal industry.
Ryanair was in focus as the airline cut its full-year traffic forecast and reported a drop in first-half profits, as it took a hit from lower fares and Boeing delays.
Reckitt Benckiser was knocked lower by a downgrade to ‘market perform’ at Bernstein, while Smith & Nephew fell after Jefferies slashed its price target on the shares.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Jd Sports Fashion Plc | +1.70% | +2.10 | 125.70 |
| 2 |  |
Tesco Plc | +1.49% | +5.20 | 353.20 |
| 3 |  |
Bt Group Plc | +1.46% | +2.05 | 142.30 |
| 4 |  |
Natwest Group Plc | +1.31% | +4.90 | 380.20 |
| 5 |  |
Whitbread Plc | +1.24% | +38.00 | 3,101.00 |
| 6 |  |
Smith (ds) Plc | +1.21% | +6.50 | 545.50 |
| 7 |  |
Shell Plc | +1.20% | +31.00 | 2,610.00 |
| 8 |  |
Bp Plc | +1.12% | +4.25 | 382.45 |
| 9 |  |
Lloyds Banking Group Plc | +1.07% | +0.58 | 55.00 |
| 10 |  |
Astrazeneca Plc | +1.03% | +114.00 | 11,136.00 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Aib Group Plc | -1.39% | -6.00 | 425.00 |
| 2 |  |
Sage Group Plc | -0.73% | -7.20 | 977.80 |
| 3 |  |
Crh Plc | -0.59% | -44.00 | 7,380.00 |
| 4 |  |
Flutter Entertainment Plc | -0.58% | -105.00 | 17,865.00 |
| 5 |  |
Smith & Nephew Plc | -0.58% | -5.60 | 961.20 |
| 6 |  |
Scottish Mortgage Investment Trust Plc | -0.46% | -4.00 | 869.40 |
| 7 |  |
Ferguson Enterprises Inc. | -0.46% | -70.00 | 15,310.00 |
| 8 |  |
Reckitt Benckiser Group Plc | -0.44% | -22.00 | 4,972.00 |
| 9 |  |
Auto Trader Group Plc | -0.43% | -3.60 | 840.60 |
| 10 |  |
Carnival Plc | -0.36% | -5.50 | 1,527.50 |
US close: Stocks gain on weak jobs report, strong earnings
US stocks rebounded on Friday while bond yields surged as a much lower-than-expected jobs report made life easier for the Federal Reserve to ease monetary policy next week.
The Dow finished 0.7% higher at 42,052.19 after three days of losses, while the S&P 500 gained 0.4% to 5,728.80 and the Nasdaq rose 0.8% to 18,239.92.
“This week’s late-October rout in stock indices was followed by a positive start to the month as bargain hunters stepped in and the US-10 year yield slumped after an extremely weak US non-farm payrolls jobs report,” said Axel Rudolph, senior technical analyst at IG.
The yield on a 10-year US Treasury was up 10.7 basis points at 4.397% – its highest level since July.
Economic data steals focus
The US economy added just 12,000 jobs in October, according to the Bureau of Labor Statistics, well below September’s downwardly revised 223,000 print and expectations of 113,000.
Last month’s non-farm payrolls figure market the weakest level of job growth since December 2020 – when 243,000 jobs were lost – as a result of Hurricanes Helene and Milton, as well as strikes at Boeing. The unemployment rate, on the other hand, held steady month-on-month at 4.1%, in line with market expectations.
“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 labor market and any revisions to the October data,” said Kathleen Brooks, research director at XTB.
Elsewhere on the macro front, the S&P Global manufacturing PMI was upwardly revised to 48.5 in October, up from a preliminary reading of 47.8 and following September’s 15-month low of 47.3.
The Institute of Supply Management’s manufacturing PMI unexpectedly fell to 46.5 in October, down from 47.2 in September and short of expectations of 47.6, pointing to yet another contraction in manufacturing sector activity.
Finally, construction spending rose by 0.1% month-on-month in September, according to the Census Bureau, coming in at a seasonally adjusted annualised rate of $2.12bn, slightly exceeding forecasts for a flat reading. Private spending was flat in September, with the residential segment up 0.2% and the non-residential segment down 0.1%.
Market movers
Apple posted better-than-expected quarterly profits but shares fell 1% after earnings were impacted by a one-time charge related to the reversal of a European General Court decision that will require it to pay €13.0bn in back taxes to the Irish government.
Shares in Amazon jumped 6% after reporting third-quarter earnings that beat expectations as its cloud and advertising units showed strong growth.
Intel was also up 8% after revenues fell less than forecast in the third quarter while the chipmaker’s full-year guidance impressed the market.
Energy giant Chevron also beat third-quarter earnings and revenue expectations as it returned a record amount of cash to shareholders.
Monday newspaper round-up: Four-day week, UK energy, Apple
Fraudsters may have stolen £500,000 from a taxpayer-funded scheme aimed at accelerating the removal of dangerous cladding from buildings, the public spending watchdog has revealed. The National Audit Office said the government decision to prioritise speed in handing out money to building owners had increased its risk of losses from fraud. The warning came in an NAO report into the government’s progress in remediating dangerous cladding from blocks after the Grenfell Tower fire in 2017. – Guardian
One thousand workers in the UK will get extra time off with no loss of pay in the first official pilot by the four-day week campaign under the Labour government. The British Society for Immunology and Crate Brewery in Hackney, east London, are among the businesses to have joined the latest trial, which is being led by the 4 Day Week Campaign, as it launches on Monday. – Guardian
Cornwall is home to more solar panels than anywhere else in the country, new figures show, fuelling a growing backlash from local farmers and small businesses. The south-west county now boasts more than 27,000 sites generating solar energy, with even more planned under Ed Miliband’s green energy rollout. The spread of solar energy across the Cornish countryside has been welcomed by climate campaigners. However, it has also sparked anger among residents and councillors who claim the local landscape has been ruined by an influx of large glass solar panels. – Telegraph
Shares in Apple will be in focus on Monday after Warren Buffett’s Berkshire Hathaway continued to slash its stake in the tech company as part of a selling spree that has lifted his cash pile to record levels. The billionaire’s industrials-to-insurance conglomerate disclosed on Saturday that it had reduced its position in Apple to $69.9 billion in the third quarter, indicating it had shed a further 100 million shares in the period, or a quarter of its holding. – The Times
The head of the International Energy Agency has backed the government’s ambitious plan to clean up Britain’s power supply by 2030 so the UK can keep its lead in cutting-edge energy industries. Labour has faced criticism for its ambition to supply almost all the country’s electricity with wind, solar and nuclear energy in only six years’ time. – The Times
