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London open: Stocks fall as investors mull jobs data; Convatec surges
London stocks fell in early trade on Tuesday as data revealed an uptick in unemployment and a cooling in wage growth, and as investors sifted through a raft of corporate releases.
At 0840 GMT, the FTSE 100 was down 0.6% at 8,078.40.
Figures released earlier by the Office for National Statistics showed the unemployment rate rose to 4.3% in the three months to September from 4% in the previous quarter, versus expectations for a 4.1% increase.
Pay excluding bonuses rose 4.8% on the same period a year earlier, which was the lowest since June 2022.
Including bonuses, pay growth rose to 4.3% from 3.8% but the ONS said this was affected by the civil service one-off payments made in July and August 2023.
ONS director of economic statistics Liz McKeown said: “Growth in pay excluding bonuses eased again this month to its lowest rate in over two years. Pay growth including bonuses increased, but for recent periods these figures have been affected by last year’s one-off payments made to public sector workers.
“Job vacancies have fallen again, as they have been doing for more than two years now. However, the total still remains a little above where it was before the pandemic.”
Matt Britzman, senior equity analyst at Hargreaves Lansdown, said: “European markets look to have a slightly sombre tone this morning with the FTSE 100 opening 0.4% lower, as UK wage growth continues to slow, but not quite as fast as expected.
“Regular pay in the UK, excluding bonuses, rose by 4.8% year-on-year marking its lowest growth since June 2022 but slightly above market forecasts of 4.7%. Strip out the impact of inflation, and wage growth held steady at 1.9%, matching the previous quarterly print.
“The worry here is that sticky wage growth could scupper the Bank of England’s plans to keep interest rates coming down, but policymakers won’t be losing too much sleep over these numbers.”
In equity markets, Fresnillo slumped after saying that Industrias Peñoles, its partner in a long-standing silver production agreement, was having operational issues affecting the Sabinas mine, which is fully owned by Peñoles.
Vodafone fell even as it reiterated full-year guidance after saying first-half results were in line with expectations.
4Imprint lost ground as it hailed a “strong financial performance in difficult market conditions” in the 10 months to the end of October.
Waste management company Renewi also retreated after half-year results.
On the upside, Convatec surged to the top of the FTSE 100 as the wound care specialist raised its guidance for 2024 following robust sales growth across its divisions.
BAE Systems rose as the arms maker held annual guidance and said its order book reflected demand from governments for weaponry amid increasing global tensions. The company said it expected to hit its upgraded underlying operating earnings growth target of 12 -14% this year on 2023’s £2.7bn.
DCC shot higher as it announced plans to simplify its operations and focus on the energy sector. The sales, marketing and support services group also reported a rise in interim profit and lifted its dividend.
AstraZeneca was in the black after upgrading its full-year revenue and earnings per share guidance, citing strong growth across key therapy areas and solid financial results for the first nine months of the year.
Bank of Georgia and Drax were also trading up after third-quarter results and a trading update, respectively.
Top 10 FTSE 100 Risers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Dcc Plc | +15.18% | +754.00 | 5,720.00 |
| 2 |  |
Centrica Plc | +1.41% | +1.65 | 118.35 |
| 3 |  |
Melrose Industries Plc | +1.36% | +7.00 | 520.20 |
| 4 |  |
Aib Group Plc | +1.24% | +5.50 | 450.00 |
| 5 |  |
Smith & Nephew Plc | +1.15% | +10.80 | 948.60 |
| 6 |  |
Bae Systems Plc | +1.00% | +14.00 | 1,407.50 |
| 7 |  |
Astrazeneca Plc | +0.67% | +67.00 | 10,052.00 |
| 8 |  |
Banco Santander S.a. | +0.40% | +1.50 | 373.00 |
| 9 |  |
Investec Pref | +0.00% | +0.00 | 582.50 |
| 10 |  |
Toyota Motor Corporation | +0.00% | +0.00 | 6,926.17 |
Top 10 FTSE 100 Fallers
| Sponsored by Plus500 |
|
| # | Name | Change Pct | Change | Cur Price | |
|---|---|---|---|---|---|
| 1 |  |
Vodafone Group Plc | -3.86% | -2.82 | 70.18 |
| 2 |  |
Prudential Plc | -3.37% | -21.60 | 619.80 |
| 3 |  |
Gen.acc.8se.pf | -2.96% | -4.25 | 139.25 |
| 4 |  |
Anglo American Plc | -2.41% | -56.00 | 2,270.50 |
| 5 |  |
South32 Limited | -2.40% | -4.50 | 183.00 |
| 6 |  |
Marks And Spencer Group Plc | -2.20% | -8.10 | 359.80 |
| 7 |  |
Glencore Plc | -2.20% | -8.55 | 379.95 |
| 8 |  |
Bp 9% 2nd Prf | -2.19% | -3.50 | 156.50 |
| 9 |  |
Gsk Plc | -1.97% | -27.50 | 1,369.50 |
| 10 |  |
Antofagasta Plc | -1.84% | -30.50 | 1,626.00 |
US close: Five-day win streak sends stocks to new highs
US stocks rose for the fifth straight session on Monday, with all three Wall Street benchmarks hitting new closing highs, as the post-election rally continued.
The Dow finished up 0.7% at a new high of 44,293.13 and the S&P 500 gained 0.1% to settle at a new peak of 6,001.35, while the Nasdaq – which had been in the red for most of the day – managed to inch 0.1% higher to 19,298.76.
While markets are open as normal, Monday was the Veterans Day national holiday, which is thought to have resulted in lower volumes.
The Dow, S&P 500 and Nasdaq all hit new records on Friday in the aftermath of last Tuesday’s presidential election, in which Donald Trump comfortably beat Kamala Harris to be America’s new pro-business president elect, while another rate cut from the Federal Reserve on Thursday also boosted investor sentiment. Since election day, the Dow is now up 5.98%, the S&P 500 is up 5.05% and the Nasdaq is up 6.15%.
“The prospect of a Republican clean sweep continues to energise investors, and with earnings growth still healthy, investors are also looking forward to a fresh burst of M&A and IPOs that will provide fresh flows to US markets. The Trump train rumbles on,” said Chris Beauchamp, chief market analyst at IG.
No major economic data was out during Monday’s session, though things will pick up later in the week with October’s US inflation report out on Wednesday, followed by the US producer price index on Thursday and US retail sales on Friday.
“The US inflation report comes at a timely moment, with markets second guessing whether a December rate cut will come to fruition or not. While Trump’s policies have been largely deemed to be inflationary, the continued slump in energy prices does at least keep a lid on one key element that helps drive price pressures throughout the world,” said Joshua Mahony, chief market analyst at Scope Markets.
Market movers
Crypto stocks Coinbase and Microstrategy were rising 20% or more after bitcoin prices surged more than $6,000 (+8.2%) to a new record of $87,011.63.
Bitcoin has surged 27% since election day, propelled by investor optimism that Trump’s new administration would support a friendlier regulatory environment for digital currencies. The broader cryptocurrency market was mirroring Bitcoin’s momentum, with assets like Ethereum and Dogecoin seeing significant gains, up 31% and 114% over the week, respectively.
“Bitcoin has continued its climb to fresh record highs on the assumption that a Donald Trump presidency could lead to softer regulation around the cryptoverse, delivering on the promise to make America the planet’s ‘crypto capital’,” said Danni Hewson, head of financial analysis at AJ Bell.
Similarly, Tesla was continuing to benefit from the so-called ‘Trump pump’, rising 9%, with founder Elon Musk’s close relationship with the president elect expected to benefit the company – and wider electric vehicle industry.
“How long can the bromance continue? It’s a question already being asked and there are clearly sources of tension building with Musk’s X completely overshadowing Trump Media’s Truth Social, as the parent company’s shares have been on something of a rollercoaster ride since the election,” Hewson said.
Shares in Monday.com dropped 15% after the company beat profit estimates in the third quarter but underwhelmed with its outlook for the fourth quarter. Third-quarter earnings surged 33% to 85 cents a share, smashing the 63 cents consensus forecast, but sales guidance for the fourth quarter was only in line with current market estimates.
Another big mover was small cap immunotherapy company CERo Therapeutics Holdings, which rocketed 180% after positive preclinical data for its cancer treatment.
A number of heavyweights will report earnings this week, including Home Depot, Alibaba, Cisco, and Walt Disney.
Tuesday newspaper round-up: Bluesky, British Steel, FRC
Social media platform Bluesky has picked up more than 700,000 new users in the week since the US election, as users seek to escape misinformation and offensive posts on X. The influx, largely from North America and the UK, has helped Bluesky reach 14.5 million users worldwide, up from 9 million in September, the company said. – Guardian
The owners of British Steel are to keep the blast furnaces at its Scunthorpe site running past Christmas amid talks over government support for a switch to less polluting technology. The government is thought to be considering aid for British Steel at the same level or even higher than the £500m pledged to Tata Steel, which closed its two blast furnaces in Port Talbot in September. However, no decisions on the shape of a package have been made. – Guardian
Rachel Reeves’s tax raid risks turning high streets into “ghost towns” for much of the week, as pubs, restaurants and shops prepare to shut earlier and open on fewer days. Retail and hospitality chiefs said they were actively looking at reducing opening hours in response to Ms Reeves’s decision to raise employers’ National Insurance contributions. It raises fears that the Budget will worsen problems for Britain’s high streets and leave town centres largely shuttered outside the busiest shopping days of the week. – Telegraph
Herbert Smith Freehills is planning to merge with its US rival Kramer Levin to create one of the 20 largest law firms in the world. The combined operation will have more than $2 billion of annual revenue and 2,700 lawyers, including 640 partners across 25 offices. The merger is designed to accelerate growth in the US across sectors including energy, infrastructure, mining and technology. – The Times
The Financial Reporting Council is looking to remove the mention of “the environment and society” from its definition of good stewardship for institutional investors. Currently, the accounting watchdog describes stewardship as “the responsible allocation, management and oversight of capital to create long-term value for clients and beneficiaries leading to sustainable benefits for the economy, the environment and society”. – The Times
