FTSE 100 Live December 03: Stock Market Volatility, Omicron Variant, Oil Price, OPEC Meeting, Brent Crude Futures, US Non-Farm Payrolls, US Unemployment, US Federal Reserve
The FTSE 100 index is broadly unchanged as traders anticipate the monthly release of US employment figures later.
A solid result will add pressure on Federal Reserve policymakers to accelerate declining support for the pandemic.
Oil prices are 3% higher and BP shares have risen after a City upgrade, but the FTSE 100 Index lost a 0.7% gain earlier.
FTSE ends lower – just
Although it spent most of the day in the green, the FTSE 100 ended the day slightly lower after a sell-off on Wall Street scared investors.
The leading London index closed 7 points lower at 7112 – that’s a loss of just 0.1%, but still a loss.
Things look a lot worse on Wall Street. The Nasdaq is now down almost 2%.
The big story in the market today was this big mistake in the US employment numbers (see earlier in the blog). That feeling hit New York City, which bled across the pond.
That’s all from us today on the blog. Join us again next week.
Pound Slides As BoE’s Saunders Hints Omicron May Delay Rate Hike
The pound is under pressure this afternoon after comments from the Bank of England’s Michael Saunders.
Saunders, a member of the monetary policy committee responsible for setting rates, said interest rate policy was not “on autopilot” in a speech today.
“At the December meeting, a key consideration for me will be the possible economic effects of the new Omicron Covid variant, and the potential costs and benefits of waiting to see more data on it before – if necessary – adjusting politics, ”he said.
“At this time, given that the new Omicron Covid variant was only detected very recently, there might be particular benefits to waiting to see more evidence on its possible effects on public health outcomes and therefore on the economy. “
Saunder’s comments suggest the probability of a rate hike on Dec. 16 may be longer than the market predicted. The British pound is down 0.6% against the dollar at $ 1.3217 and 0.5% against the euro at € 1.1704.
George Buckley, Chief Economist UK and Europe at Nomura, says: “Omicron is shaking up expectations for monetary policy.
“For the Bank of England, markets now assess only about 40% chance of a 15bp hike in December, with one of the proponents of a stricter policy (external member Michael Saunders) now seeing the “benefits” of waiting.
“The debate remains active on how Omicron will influence inflation, with Mr Saunders raising the possibility of postponing consumption on the one hand versus increased consumption of goods (compared to services) on the other hand. – which could “reinforce global inflationary pressures”. “
FTSE slips into the red
The FTSE 100 has been hanging on to gains all day but, alas, it looks like it could close lower.
The bluechip index is down 10 points as of entry to 7119.
The pullback comes as investors contemplate a massive sell off on Wall Street. New York markets opened higher but have since plunged deep into the red. The S&P 500 is down 1%, the Dow Jones is down 0.5% and the Nasdaq is down 1.9%.
The crisis comes after the number of jobs in the United States fell to less than half of forecasts.
Hinesh Patel, Portfolio Manager at Quilter Investors, said: “There is no denying that this is a significant shortfall compared to expected job growth, hitting a weight of 340,000 below consensus expectations. . But that said, the underlying mix looks decent. The unemployment conundrum continues with a rate cut to 4.2%, which opens the door to the possibility of a February rate hike towards “full employment”, as year-on-year wage gains are. at their highest level in ten years.
“Aggregate labor income has now returned to pre-February / March 2020 trend levels. The income gap experienced during the pandemic has been closed with direct dollars in the pockets, so the risk here and now is over-stimulating, which means that consumers’ expectations for revenue growth are becoming entrenched. The era of easy money is in the rear view mirror and now financial stability should now be a higher priority. “
Central London’s leading property market set to rebound
The return of foreign buyers means expensive central London homes are expected to dominate the UK property market next year when it comes to price growth, according to estate agent Winkworth.
Prime real estate in London has suffered during the pandemic as foreign buyers fled and some Londoners left the capital. But international buyers are returning now, with demand booming in areas like Kensington and Chelsea.
Winkworth Managing Director Dominic Agace said demand for prime properties in central London rose 44% from pre-pandemic levels last quarter, compared to just 4% for properties in Central London. suburb.
Red Hot Chili Peppers Go Green
A climate fund backed by Red Hot Chili Peppers singer Anthony Kiedis is heading for an IPO in London.
i (x) Net Zero, founded in 2015, plans to raise £ 20million in an IPO on Aim. The company supports sustainable and environmentally friendly businesses and has already invested in projects, including a business that turns waste into jet fuel and a business that captures carbon from the atmosphere.
Investors in i (x) include Red Hot Chili Peppers frontman Anthony Kiedis and Airbnb co-founder Joe Gebbia. The company is chaired by former London minister Nick Hurd, who left Parliament in 2019.
Wall Street opens up
New York stock markets opened higher after mixed employment figures.
The Dow Jones Industrial Average is up 0.3% shortly after the opening, while the S&P 500 is up 0.4%. The Nasdaq is up 0.1%.
Just over an hour ago, labor market data showed U.S. unemployment fell more than expected last month, even as job creation slowed.
On this side of the pond, the FTSE 100 is up half a percent. Developer Berkeley, which releases half-year results next week, topped BP at the top of the index.
BioNTech CEO optimistic about Omicron virus
Investors will like it: The CEO of BioNTech, the German biotech company that helped develop Pfizer’s Covid-19 vaccine, says he believes his company will soon be able to offer a vaccine against the new Omicron virus.
Ougur Sahin said at a Reuters event he thought his business could be quickly adapted to handle the new variant. He said the existing vaccine is also expected to provide protection against severe symptoms, although it appears to be less effective at preventing infections.
Sahin said, “This variant might be able to infect those vaccinated. We expect that infected people who have been vaccinated will still be protected against serious illness. “
US employment figures miss forecasts
The US labor market data for November has just been released and it’s missed. The non-farm payroll shows 210,000 new jobs were created in the United States last month, well below the 550,000 forecast by economists and down from 546,000 in October.
Despite the slowdown in job creation, unemployment fell from 4.5% to 4.2%.
Richard Flynn, Managing Director of Charles Schwab UK, said: “The positive direction of a low unemployment rate will be welcome, but today’s lackluster employment figures will no doubt increase investor caution. The figure was a disappointment compared to expectations, in large part because of global supply chain bottlenecks and labor shortages. “
Wall Street opens in just over half an hour. Nasdaq futures are up half a percent, while Dow and S&P 500 futures are both positive.
The FTSE clings to its first gains
The FTSE 100 is higher at lunchtime, up about 30 points. It continues to benefit from the rise in oil prices, with BP leading the index and Shell not far behind.
Neil Wilson, Chief Market Analyst at Markets.com, said: “The omicron variant is still the driving force, with news about its spread and severity creating high volatility in the short term. It’s a bit of a catch-up to the US session we are seeing in Europe this morning after a soft close. US futures pointing to a flat open after yesterday’s rebound. Fed watchers have no firm hold on today, but it’s all about inflation now.
“Investors are revisiting some oversold names, suggesting they see buying opportunities if omicron isn’t as bad as feared.”
US Travel Reopens Gives International Boost to UK Services, PMI Says
Companies in the service sector, including airlines and travel agents, reported an increase in new jobs from overseas in November, according to the closely watched IHS Markit / CIPS UK Services PMI survey.
This is mainly due to increased travel bookings and higher spending levels from overseas visitors. Some companies said a rebound in international business travel also led to increased export sales.
Despite companies facing rising inflation, the PMI survey – an economic health score – recorded a reading of 58.5 last month, down from 59.1 in October. Any score above 50 is considered a growth.
However, there is growing concern that the Omicron variant will end the boom and even reverse the gains. The new variant has already prompted governments around the world to tighten travel restrictions – increasing testing regimes and banning flights to countries like South Africa, where it has been sequenced.