Stock prices in London closed in the green on Thursday, ahead of the highly anticipated US non-farms data on Friday.
The FTSE 100 index closed up 40.74 points, 0.5%, at 7,723.07. The FTSE 250 ended up 45.65 points, 0.2%, at 19,372.05, and the AIM All-Share closed up 1.79 points, or 0.2%, at 755.94.
The Cboe UK 100 ended up 0.6% at 771.71, the Cboe UK 250 closed up 0.6% at 16,874.97, and the Cboe Small Companies ended up 0.5% at 14,940.05.
Stocks in New York were higher at the London equities close, with the DJIA up 0.7%, the S&P 500 index up 0.4%, and the Nasdaq Composite up 0.2%.
Since the new year, eyes have been on the US economy and where interest rates may go in 2024.
On Wednesday evening, investors had the minutes from the latest US Federal Reserve meeting, back in December.
At the December meeting, the rate-setting Federal Open Market Committee agreed to hold its benchmark rate steady in a range between 5.25% and 5.5%. Members indicated that they expect three quarter-percentage point cuts by the end of 2024.
‘In discussing the policy outlook, participants viewed the policy rate as likely at or near its peak for this tightening cycle, though they noted that the actual policy path will depend on how the economy evolves,’ the highly anticipated minutes stated.
Officials ‘reaffirmed that it would be appropriate for policy to remain at a restrictive stance for some time until inflation was clearly moving down sustainably.’
On Thursday, focus has been on the health of the US labour market.
The US labour market added more jobs than expected in December, according to a tracker from payroll processing firm ADP.
ADP said sector employment increased by 164,000 jobs in December, picking up from a 101,000 rise in November and ahead of the FXStreet cited consensus of 115,000. The November total of jobs added was revised from 103,000 to 101,000.
Meanwhile, US new jobless claims fell by more than expected in the most recent week.
According to the US Department of Labor, new jobless claims totalled 202,000 in the week ended December 30. This is down from last week’s revised level of 220,000. The latest reading came in lower than FXStreet-cited consensus of 216,000.
The data is out ahead of the US nonfarm payrolls Friday.
Meanwhile, in European equities on Thursday, the CAC 40 in Paris and the DAX 40 in Frankfurt both ended up 0.5%.
According to Destatis, Germany’s annual inflation picked up to 3.7%, from 3.2% in November. This came in slightly behind FXStreet market consensus of 3.8%.
Capital Economics’ Andrew Kenningham commented: ‘The jump in Germany’s headline inflation rate in December came as no surprise as it was driven by energy price subsidies introduced more than a year ago. With core inflation continuing to trend down, it should not affect investors’ expectations for the [European Central Bank] to begin cutting interest rates in the coming months.’
The pound was quoted at $1.2696 at the London equities close Thursday, up compared to $1.2646 at the close on Wednesday. The euro stood at $1.0961 at the European equities close Thursday, higher against $1.0915 at the same time on Wednesday. Against the yen, the dollar was trading at JP¥144.48, up compared to JP¥143.50 late Wednesday.
In the FTSE 100, retailers Next and JD Sports were the best and worst performing blue-chip stocks respectively, after both provided trading updates including the Christmas period.
JD Sports Fashion plummeted 23%, after cutting its profit outlook amid weaker-than-expected sales growth and gross margins.
The retailer said organic revenue was up 6.0% in the 22 weeks that ended December 30 on a constant currency basis from a year earlier, with like-for-like growth of 1.8%. This was slightly behind its expectations. The retailer expects organic revenue growth of around 8% for the year ending February 3.
As a result, it expects to report pretax profit and adjusted items of between £915 million and £935 million for the financial year. This falls short of market expectations of £1.04 billion, which back in September, JD Sports had said it expected to meet.
Next rose 5.5%, on the back of its trading update.
‘Clothing retailer Next has set the bar high for the rest of the retail sector by posting a strong trading update this morning,’ Edison analyst Russell Pointon commented.
In the nine weeks to December 30, the clothing and homewares seller’s full price sales were 5.7% higher year-on-year, some £38 million better than its previous guidance. It had expected growth of 2.0% year-on-year. The period forms part of its fourth quarter, which concludes on January 27.
The company now expects pretax profit for financial 2024 of £905 million, a lift of £20 million from its previous outlook, and it would represent a year-on-year increase of 4.0%. Next had initially expected pretax profit of £795 million, but it has, now on a number of occasions, lifted its bottom line outlook.
Meanwhile, BP and Shell rose 0.5% and 0.2%, respectively, as oil prices extended their recent upward movements on concerns over the Middle East.
‘The region remains a tinder box due to the Israel-Gaza war, and disruption to shipping routes through the Red Sea is also a key factor behind the surge in crude,’ AJ Bell’s investment director Russ Mould explained.
Brent oil was quoted at $76.60 a barrel at the London equities close Thursday, down from $78.13 late Wednesday. Over the last week the price has hit highs of $79.83.
On London’s AIM, Angle shares more than doubled to 31.40 pence.
The Surrey-based medical diagnostics provider celebrated ‘breakthrough results’ from its latest blood sample cancer trials would allow it to expand its product sales and pharma services.
Gold was quoted at $2,0445.01 an ounce at the London equities close Thursday, up against $2,038.89 at the close on Wednesday.
In Friday’s UK corporate calendar, MTI Wireless Edge will hold its extraordinary general meeting regarding proposed grant of options to the directors.
The economic calendar for Friday has eurozone inflation readings at 1000 GMT. Before that, there is the UK Halifax house price index at 0700 GMT.
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