Share prices in London started lower on Friday after the two-day Christmas break, as investors dissected initial readings on the strength of holiday sales and the weekly reading on US employment.
Out on Boxing Day, US seasonally adjusted initial jobless claims were 219,000 in the week that ended this past Saturday, down 1,000 from the previously week’s unrevised total of 220,000, the US Department of Labor said. Market consensus cited by FXStreet had expected 224,000 claims.
However, seasonally adjusted continuing claims for the week that ended December 14 were 1.910 million, up by 46,000 from the previous week’s 1.864 million, which was revised down from 1.874 million. The DOL said this was the highest level for insured unemployment since November 2021 when it was 1.974 million.
Also in the US, MasterCard reported that retail sales increased this holiday season, with online purchases seeing the most growth.
From November 1 to December 24, Mastercard SpendingPulse data showed US retail sales excluding automotive increased 3.8% from the year prior. The Purchase, New York-based payment card services company said SpendingPulse figures represent all payment types and are not adjusted for inflation.
Michelle Meyer, Mastercard Economics Institute chief economist, commented: ‘The holiday shopping season revealed a consumer who is willing and able to spend but driven by a search for value as can be seen by concentrated e-commerce spending during the biggest promotional periods. Solid spending during this holiday season underscores the strength we observed from the consumer all year, supported by the healthy labor market and household wealth gains.’
In the UK, Boxing Day shopper footfall was down 7.6% from last year across all UK retail destinations, although this year’s data had been compared with an unusual spike in footfall as 2023 was the first ‘proper Christmas’ period without Covid-19 pandemic restrictions.
Before the pandemic, the number of Boxing Day shoppers on the streets had been declining year on year. MRI Software analyst Jenni Matthews explained: ‘It’s the shift to online shopping, it’s the convenience, you’ve got the family days that take place on Christmas Day and Boxing Day.’
People are also increasingly stocking up before Christmas, Matthews said, and MRI found an 18% increase in footfall at all UK retail destinations on Christmas Eve this year compared with 2023.
The FTSE 100 index opened down 24.41 points, 0.3%, at 8,112.58. The FTSE 250 was down 71.05 points, 0.4%, at 20,500.46, and the AIM All-Share was up 0.36 points, 0.1%, at 717.76.
The Cboe UK 100 was down 0.2% at 814.63, the Cboe UK 250 down 0.2% at 17,982.58, and the Cboe Small Companies down 0.4% at 10363.99.
DS Smith led the FTSE 100 gainers, up 1.2%. Anglo American led the losers, down 1.2%.
WAG Payment Solutions led the FTSE 250, up 3.5%, while in the red Baltic Classifieds was down 4.2%.
Vistry was 0.6% higher, despite broker Davy cutting its recommendation on the stock to ’neutral’ from ’outperform’.
Gemfields was up 3.6%, as it said it expects operations in Mozambique to return to normal by year-end.
The gemstones miner halted operations at 75% owned Montepuez Ruby Mining on Tuesday, after groups associated with illegal ruby mining took advantage of the political unrest in Mozambique and set fire to buildings built by the mine on Monday.
The southern African country’s highest court confirmed on Monday that Frelimo leader Daniel Chapo won the October 9 presidential election.
The contested election has already triggered weeks of deadly unrest, with civil society organisation Plataforma Decide reporting that at least 121 people have died during protests. As well as arson, in capital Maputo and other cities shops have been looted, prisons stormed, banks robbed and power pylons destroyed.
However, Gemfields said it expects operations at Montepuez to return to normal before end of this year.
In European equities on Friday, the CAC 40 in Paris was up 0.1%, while the DAX 40 in Frankfurt was flat.
The pound was quoted lower at $1.2520 early on Friday in London, compared to $1.2555 at the UK equities close on Tuesday, Christmas Eve. The euro stood higher at $1.0413, up from $1.0403. Against the yen, the dollar was trading higher at JP¥157.86 from JP¥157.10.
In Asia on Friday, the Nikkei 225 index in Tokyo was up 1.8%. In China, the Shanghai Composite was up 0.1%, while the Hang Seng index in Hong Kong was marginally lower. The S&P/ASX 200 in Sydney closed up 0.5%.
In the US on Thursday, Christ, Wall Street ended mixed, with the Dow Jones Industrial Average up 0.1%, the S&P 500 eased 2.45 points and the Nasdaq Composite down 0.1%.
‘Those glued to their screens, hoping for Santa’s arrival, were left disappointed,’ Swissquote analyst Ipek Ozkardeskaya said.
‘The major US indices weren’t in good shape yesterday even after a mixed bag of US jobs data showed that the continuing jobless claims in the US advanced to the highest levels in more than three years - a sign that it takes longer for people in the US to find a new job.’
Brent oil was quoted higher at $73.26 a barrel early in London on Friday from $73.03 late Tuesday.
Gold was quoted higher at $2,628.55 an ounce against $2,614.31.
Still to come on Friday’s economic calendar, there is the US trade balance and home price index.
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