FTSE 100 to trend firmer ahead of US jobs data

UK stocks were expected to open higher, more or less replicating yesterday’s 27 point gain on the Footsie, ahead of the US jobs report this afternoon.

London’s index of leading shares was seen opening 27 points higher at 6,518, despite a mixed showing by US indices yesterday.

The Dow Jones index rose 86 points to 29,970 but the broader-based S&P 500 dipped a couple of points to 3,667.

In Asia, markets are also mixed. Japan’s Nikkei 225 is off 48 points at 26,761 but in Hong Kong, the Hang Seng has marched 46 points higher to 26,774.

It’s the first Friday of the month so that means US non-farm payrolls data.

As ever, traders have been given an inkling of what the numbers might be like by the jobs number released by payrolls processing firm ADP on Wednesday, although this is not always a reliable guide.

According to ADP, the private sector added 307,000 jobs in November, down from the revised figure of 404,000 in October and well below analyst estimates of 440,000.

The four-month low for job creation has been attributed to a surge in COVID-19 cases slamming the brakes on US hiring. If the slowdown is confirmed in Friday’s numbers it will likely raise concerns that the US employment outlook could be in for a rough winter.

“The US non-farm payrolls report will be released at 1.30pm (UK time) and it is expected to show that 469,000 jobs were created last month, and that would be a drop from the 638,000 registered in October. The unemployment rate is tipped to be 6.8%, down from the 6.9% in previous update, and the yearly average earnings metric is expected to slip from 4.5% to 4.3%. A fall in wages could be viewed as positive for the economy as it could be an indication that more lower-income workers have returned to the workforce,” said David Madden.

On the corporate news front, Berkeley Group Holdings PLC (LON:BKG) is releasing its half-year results, and analysts at UBS expect revenue to decline by 6% to £872mln, with profit before tax of around £212mln from last year’s £278mln.

The figure is in line with recent guidance of splitting profits 40-60 across the two halves, meaning the full-year profit should come in at £500mln.

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