London open: Stocks steady ahead of non-farm payrolls report

Opening Market Report
07:04, 5th August 2022

(Sharecast News) - London stocks were steady in early trade on Friday as investors eyed the release of the latest US non-farm payrolls report.
At 0820 BST, the FTSE 100 was flat at 7,445.75.

Richard Hunter, head of markets at Interactive Investor, said: "The latest signal of economic health will be revealed today, as investors await the release of the non-farm payroll figures with bated breath.

"In any given month, the release is arguably the most closely watched set of global economic data. This month's report will take on added significance following the previous release of US GDP data which confirmed two quarters of contraction. While not a technical recession since the US measures a recession by different means to many other countries, one of the additional factors is the state of the labour market.

"The consensus is that 250000 jobs will have been added in July, as compared to 372000 in June, with the unemployment rate unchanged at 3.6%. Given the continuation of aggressive Federal Reserve interest rate policy, though, investors will be looking under the bonnet away from these headline figures for other clues. The average hourly earnings rate, for example, could provide further inflationary pressure in the event of a strong reading.

"If the consensus comes through at the expected number, there could be another period of investor lethargy until some signs of a slowing labour market are in evidence. Until that time, the possibility of further Fed tightening remains very much on the table, with the time lag between interest rate rises taking effect and the market trying to anticipate the state of the economy several months ahead providing scope for further volatility."

The payrolls report is due at 1330 BST, along with average earnings and the unemployment rate.

On home shores, the latest survey from Halifax showed that house prices fell in July for the first time in a year amid rising interest rates and surging inflation.

House prices dipped 0.1% on the month following a 1.4% increase in June. On the year, house price growth eased to 11.8% in July from 12.5% the month before, with the average house price now standing at £293,221 compared to £293,586 in June.

Halifax managing director Russell Galley said: "While we shouldn't read too much into any single month, especially as the fall is only fractional, a slowdown in annual house price growth has been expected for some time. Leading indicators of the housing market have recently shown a softening of activity, while rising borrowing costs are adding to the squeeze on household budgets against a backdrop of exceptionally high house price-to-income ratios.

"That said, some of the drivers of the buoyant market we've seen over recent years - such as extra funds saved during the pandemic, fundamental changes in how people use their homes, and investment demand, still remain evident. The extremely short supply of homes for sale is also a significant long-term challenge but serves to underpin high property prices."

In equity markets, London Stock Exchange gained after it announced the launch of a £750m share buyback, posted a jump in first-half profit and lifted its dividend.

Hargreaves Lansdown was also in the black despite reporting a fall in assets under management for the full year as the war in Ukraine, inflation and cost-of-living crisis shook investor confidence.

Pets At Home advanced after saying it delivered a "continued strong performance" in the first quarter, with all channels remaining in growth.

WPP was in the red even as the advertising giant reported a rise in interim profits, driven by strong client demand across all services.

Tullow Oil gushed lower after saying it had plugged and abandoned an exploration well offshore Guyana.

Market Movers

FTSE 100 (UKX) 7,445.75 -0.03%
FTSE 250 (MCX) 20,140.91 -0.07%
techMARK (TASX) 4,372.70 0.11%

FTSE 100 - Risers

Ocado Group (OCDO) 963.80p 2.53%
Dechra Pharmaceuticals (DPH) 3,844.00p 1.59%
London Stock Exchange Group (LSEG) 8,258.00p 1.40%
Howden Joinery Group (HWDN) 676.80p 1.38%
Antofagasta (ANTO) 1,145.00p 1.33%
Rio Tinto (RIO) 4,874.50p 0.92%
Fresnillo (FRES) 698.00p 0.87%
Coca-Cola HBC AG (CDI) (CCH) 1,967.00p 0.85%
Auto Trader Group (AUTO) 669.80p 0.84%
Phoenix Group Holdings (PHNX) 668.00p 0.69%

FTSE 100 - Fallers

WPP (WPP) 861.60p -3.49%
Hikma Pharmaceuticals (HIK) 1,626.50p -1.45%
Informa (INF) 587.20p -1.31%
Shell (SHEL) 2,109.50p -1.08%
BP (BP.) 404.05p -0.97%
Mondi (MNDI) 1,515.00p -0.92%
Next (NXT) 6,654.00p -0.89%
B&M European Value Retail S.A. (DI) (BME) 428.00p -0.81%
Barclays (BARC) 161.46p -0.63%
Avast (AVST) 682.20p -0.55%

FTSE 250 - Risers

Edinburgh Worldwide Inv Trust (EWI) 214.00p 4.90%
Bridgepoint Group (Reg S) (BPT) 272.00p 4.62%
Just Group (JUST) 73.45p 2.44%
Morgan Advanced Materials (MGAM) 316.50p 2.10%
Serco Group (SRP) 187.00p 2.07%
Pets at Home Group (PETS) 344.20p 1.95%
Carnival (CCL) 725.20p 1.34%
Britvic (BVIC) 857.50p 1.24%
Monks Inv Trust (MNKS) 1,039.00p 1.17%
National Express Group (NEX) 183.50p 1.16%

FTSE 250 - Fallers

Tullow Oil (TLW) 47.54p -5.67%
Trainline (TRN) 389.60p -4.74%
Convatec Group (CTEC) 235.40p -4.23%
Bytes Technology Group (BYIT) 431.00p -3.75%
Ascential (ASCL) 240.60p -2.43%
Vesuvius (VSVS) 331.80p -2.41%
Hammerson (HMSO) 25.00p -2.38%
Marks & Spencer Group (MKS) 136.00p -2.37%
Ibstock (IBST) 200.80p -2.33%
Pagegroup (PAGE) 451.80p -2.12%

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