FTSE 100 progresses slightly despite worse than expected US employment report

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The US economy cut 701,000 jobs in March. Economists expected 100,000 jobs to drop.

  • FTSE 100 lost 58 points
  • People’s Bank of China Increases Liquidity of Small Banks
  • Non-farm payroll in the United States fell by 700,000 in March

1:30 p.m .: Non-farm wages in the United States fall much more than expected; traders shrug

The US economy cut 701,000 jobs in March. Economists expected 100,000 jobs to drop.

“The American NFP [non-farm payrolls] the data was not a shocking figure for gold traders because we have not seen a massive spike in the price of gold, “said Naeem Aslam of Avatrade.

“The first reaction was upward, and overall, we are ready for the day. Given that this number failed to produce a massive surge in the price of gold, I think it is likely that prices will only climb higher than – the best scenario, “he added,

The US indices, which are expected to open lower before the release of non-farm payroll figures, are expected to open further over time, although slightly less after the number of jobs.

The Dow Jones industrial average is expected to open some 44 points less at 21,370 and the S&P 500 one point lower at 2,526.

In London, the FTSE 100 also rose slightly, from 5,419 to 5,428, down 52 points (0.9%).

1:00 p.m .: Footsie rallies

The People’s Bank of China (PboC) is set to cut the reserve requirement ratio (RRR) in half by April 15.

The Chinese central bank will further cut by half a point on May 15.

The action will increase liquidity, with each drop of half a point expected to free up about 400 billion yuan, targeting small banks.

The PBoC also announced that it would lower the interest rate paid for excess reserves from 0.72% to 0.35%.

“The cut suggests that the damage caused by the coronavirus epidemic around the world could persist at least until May. The effectiveness of policy is therefore very important in measuring the speed of economic recovery.

“However, the effectiveness of this targeted reduction in RRR will be debatable,” said Iris Pang, chief economist for Greater China at ING Economics.

“The cuts are aimed at small banks to encourage them to lend to SMEs, but banks have been reluctant to lend to SMEs that are facing difficulties in this pandemic. This could be particularly true for exporters who face western order withdrawals. The Easter holidays are an important export season for China. With the foreclosure and increased social estrangement in Europe and the United States, sales in Western markets are expected to be dismal.

“Are banks willing to take a high credit risk to lend to SMEs facing a cash flow problem? This may not be likely, ”suggested Pang.

In London, rather than locking out before the release of March non-farm payroll figures in the United States, the FTSE 100 climbed to 5,421, down 58 points (1.1%) .

The number of jobs in the United States has been deemed irrelevant by some, given that the job market has been transformed in the past two weeks, but for the record, the consensus estimate is that 100,000 jobs have been lost.

11.45 am: A weak rally is short-lived

The Footsie is out of the bottom, but the rally attempt already seems to be in its final stages.

The index is down 62 points (1.1%) to 5,419.

“The stock markets are heading for the weekend in the red, but investors can be a little encouraged by the progress of the week despite small losses along the way,” noted Craig Erlam at OANDA.

“The extraordinary movements that became too regular a feature in March happen less frequently or more severely. The scenario of the drop in knives that we observe seems less dangerous, which could encourage people to return, stocks still trading at very low levels, “he said, before adding in a hurry ( before the lawsuits) that “it’s not me who calls a market fund”.

The volatility may not be there as it was a few weeks ago, but there are still almost a dozen FTSE 100 stocks showing losses of 5% or more, including the hotel group ( ), asset managers () and Ashmore PLC () and aircraft engine manufacturer ().

Investors boarded the bus companies after the government announced a bailout to keep services running so essential workers can get to work.

Go-Ahead Group PLC () was up 12% to 910p; The PLC () increased by 4.6% to 49.7p and () increased by 5.9% to 70.25p.

10:30 am: The service sector was “sucked into a black hole and thrown into the unknown by the powerful impact of the coronavirus COVID-19”

The Footsie is drifting further into the red as the market digests the latest data from the IHS Markit / CIPS purchasing managers index.

The main stocks index in London fell 70 points (1.3%) to 5,410.

At 36.0 in March, down sharply from 53.0 in February, the IHS Markit / CIPS UK composite production index fell to its lowest level since the start of this series in January 1998. The last reading was below the previous “flash” reading of 37.1 in March and highlighted a slightly faster reduction in private sector output than that observed at the height of the global financial crisis (index at 38.1 in November 2008) said IHS Markit.

The slowdown in overall business activity is due to a rapid drop in activity in the services sector, where the index has been revised to 34.5 from the rapid estimate of 35.7, along with the most rapid decline in manufacturing production since July 2012.

“A record drop in UK service activity reported in March adds to the increasingly bleak economic data recently seen in the developed world. Public health emergency measures to combat the COVID-19 pandemic continue to put commercial operations on hold, force dark cuts to non-essential expenses and trigger distress to household finances, “said Tim Moore, Economic Director of IHS Markit.

“The severe impact on activity in the service sector in March was by no means limited to businesses in contact with consumers or those directly affected by restrictions on international travel. Technology services was the only area to report an increase in business activity, but even this pocket of growth seemed fragile as new workloads fell faster in this category than at any time since 2011.

“There were numerous reports from survey respondents that the placement of staff on leave helped mitigate the more widespread job losses in March; however, employment levels in the service sector have continued to decline at the fastest rate for over a decade, due to some forced layoffs and the failure to replace outgoing staff amid widespread freeze hires.

“With the UK economy now almost certain to experience a sharp contraction in the second quarter of the year, the most important aspect of the services PMI to watch for encouraging signs will be the upturn in the business expectations sub-index by compared to the record low seen in March, “said Moore.

Duncan Brock, director of the group at the Chartered Institute of Procurement & Supply, said that the service sector was “sucked into a black hole and thrown into the unknown by the powerful impact of the COVID-19 coronavirus.”

“The sharp drop in new orders was the largest since the survey began in 1996, according to PMI data. Export orders were hit particularly hard and, in some cases, dissipated as border closures and travel restrictions resulted in the immediate cessation of normal business.

“As you would expect, this had a severe knock-on effect on employment as job losses accelerated to reach the levels last seen in June 2009. As the pandemic raged , some companies have used hasty layoffs and a hiring freeze to stay afloat in the short term, ”said Brock.

9.45 a.m .: Service PMI revised even lower

Seasonally adjusted sales for the IHS Markit / CIPS final UK Services Purchasing Managers (PMI) index for March were revised to 35.5 from 35.7.

The revised PMI reading was down sharply from 53.2 in February and is the lowest level ever recorded. A reading of less than 50 indicates a drop in activity.

The survey compiler. IHS Markit said that this was the fastest drop in activity since the investigation began in July 1996.

The slowdown in activity was almost exclusively linked by survey respondents to business closings and canceled orders in response to the 2019 coronavirus disease pandemic (COVID-19).

Sharp reductions in activity were widespread across the sector in March, with only the technology services subcategory recording pockets of continued business growth.

The FTSE 100 took the news in its stride; it was around 5,427 when the data was released and 15 minutes later it was still there, down 53 points.

8:30 am: careful departure

The FTSE 100 has headed down before what should be a set defining the session of non-farm payroll figures in the United States.

The British blue chip index lost 52 points to 5,427.65

WATCH: Morning report: FTSE 100 opens in red ahead of US job numbers; British bus bailout

In a sense, employment data was pushed back by Thursday’s weekly unemployment figures, which showed a record 6.6 mln work lost in the previous seven days, bringing the total for the two weeks to 10 mln.

“We are waiting for the data to confirm what we already know. In the United States, record growth of 100 months or more in job growth has come to a halt, “said Jasper Lawler of London Capital Group.

“The figure for the non-farm payroll for March should become negative. Since the data was collected in the first half of the month, it is unlikely that it will capture all of the damage caused by the forced locks and remain advice at home. The really hideous stuff will probably show up in the April numbers. “

The Asian markets were shaken by lingering concerns over coronaviruses as the number of cases exceeded one million.

A number of large equity investors were reducing their exposure before the weekend, fearing what might happen in the coming days, analysts said.

Here in the UK, a bit of “bottom fishing” pushed the owner of British Airways IAG () to the top of the pile with a gain of 2.7%.

On the debit side, it was a bad day for London-listed savings and investment companies, led by (), which led the declines with a loss of 6%.

After a rare spike in oil prices, the reality of the situation hit BP () and () again, both of which were collateral damage in the Saudi-Russian supply war. Stocks fell 4% and 3% respectively.

Proactive news headlines:

() has expanded its global data partnership and will receive a strategic investment from NHN Corp, a South Korean big data company. Under this agreement, RHN will invest £ 6.5 million in the Audiens data platform, owned by Bango’s subsidiary, Bango Deep, which will give RHN a 60% stake. The company said the two were aimed at making Audiens a world data leader through the use of a customer data platform (CDP), which will allow all brands to “plan, execute and analyze their business online marketing ”. In addition to Bango Deep’s investment, RHN has also agreed to subscribe for around 3.5 million new shares of Bango itself, for £ 3.2 million.

() said it is evaluating the potential of an emerging cell technology to help fight the coronavirus (COVID-19). He has developed a range of human exosomes that can provide a medically relevant payload; viral vaccines, for example. “Previously published and unpublished data show that ReNeuron exosomes can be loaded with biologically active cargoes and preferably delivered to specific sites in the body,” the company said in a statement. “This research is in its infancy, the objective being to determine whether an increase in the potency of the coronavirus vaccines against SARS-CoV-2 can be improved in this way, using the established expertise of ReNeuron isolation, modification and fabrication of exosomes on a large scale. “

() said companies and partners in his portfolio were “well prepared to meet the challenges and meet the needs of a post-coronavirus world” as he updated his progress amid the disruption of the pandemic. “The disruption caused by the measures taken to combat the coronavirus also shows a trend towards increased dependence on electronic forms of communication and payment by businesses and individuals. We see this global development as a generator of new opportunities for blockchain companies around the world, “the company said in a statement.

() stated that its Bahamian funder, a large family office institutional investor, had exercised its right to convert some £ 800,000 of loan notes into equity. This is the latest conversion, after £ 1.44 million in February, and the conversion price was marked at 1.28p per share. A total of 62.5 million shares will be issued to the investor and some £ 2.46 million of loan notes are currently held by the investor.

(), the gold and base metals explorer, has completed the technical interpretation of the wholly-owned Plateau Gold deposit. The results of this work continue to show that a large gold deposit has been intersected at the Plateau, which is part of the Lighthouse building in North Queensland, Australia.

(), the vertically integrated CBD company listed in London, said that it had issued 12,900,000 new ordinary shares of the company to members of its management team in accordance with the profit-sharing agreements put in place in March 2019. The shares were issued fully paid in equal amounts to Trevor Taylor, director of corporate strategy, and Antonio Russo, director of corporate revenue.

(ASX: SO4) () has completed civil earthworks at the processing plant and non-process infrastructure site of the Lake Way project in the Goldfields area of ​​Western Australia. Non-process infrastructure includes accommodation, electricity, raw water storage and buildings. The first construction works for the treatment plant are in progress and the project remains in line with the December 2020 commissioning schedule.

Ferro-Alloy Resources Limited () said it had allocated and issued 500,000 new fully paid-up common shares of the company to a financial service provider in return for their retained services.

Learning Technologies Group PLC (), the provider of technologies and services for digital learning and talent management, has announced that it will publish its annual results for the year ended December 31, 2019 on April 16, 2020. The date revised follows that of the group. compliance with previous recommendations from the Financial Conduct Authority and the Financial Reporting Council that listed companies should delay the publication of preliminary financial statements by at least two weeks.

Separately, Learning Technologies also stated that following the exceptional performance of BreezyHR, which was acquired in April 2019 and which generated organic growth of around 60% in full year revenues, it has now settled 4, $ 0 million in contingent consideration deferred by the issuance of 2,408,585 new common shares in lieu of cash payment.

(), a leading provider of oil and gas drilling and production services in the Middle East and North Africa (MENA), has announced that it will announce its annual results for the twelve months ended 31 December 2019, Tuesday April 7, 2020. The release date has been set in accordance with the Financial Conduct Authority directive for a two-week moratorium on the publication of preliminary account statements, which ends on April 5, 2020.

() stated that, as it is no longer legally possible to hold its Annual General Meeting (AGM) as scheduled by the Board of Directors, the meeting will be held at the office, Home Farm House, Iwerne Minster, Dorset , DT11 8LT, with the minimum quorum necessary for two shareholders present to conduct the business of the meeting. Since physical presence at the AGM will not be legal, shareholders who wish to register their vote on the resolutions must do so by completing and signing the form of proxy that accompanied the notice of the AGM 2020. The AGM will be recorded and an audio distribution of the meeting will be available for shareholders to listen to later. Company Website.

Location Sciences (), the leading location data verification company, reminded all shareholders that in order to comply with UK government rules during the coronavirus pandemic, they should not attend the AGM ) of the company which will be held at 9:00 am on April 9, 2020 in person and instead appoint the group president as proxy with their voting instructions. The company said, as an alternative, that it offers shareholders the opportunity to attend the AGM via a webinar by registering in advance by following the link: https://locationsciences.zoom.us/webinar/register/WN_FcxDE1aTR-C7f1RJVCtkBg.

() said it was to introduce a new investor communication program, which aims to give shareholders a regular flow of information with access to the board of directors and management. This investor relations policy will include: updates from the CEO; teleconferences with shareholders; Question and answer documents; and private investor events. The company has said it will inform shareholders of the first planned event once there is visibility on the lifting of travel restrictions resulting from the COVID-19 coronavirus pandemic.

6:35 am: start of the rear leg planned

London’s main stocks should open on the back foot before US employment figures for March are released today.

Bets on spreads indicate that the FTSE 100 will open around 5,433, down 47 points from last night’s close.

The US markets managed to finish in credit yesterday despite a shocking weekly jobless number.

“Claims doubled last week from the previous week’s record; we cannot be sure they have now peaked, “said Ian Shepherdson, chief economist at Pantheon Macroeconomics, who added that today’s payroll number in March” is not relevant, “because” almost all of the recent increase in jobless claims will hit April.

The Dow Jones industrial average ended up 470 points to 21,413 and the S&P 500 climbed 56 points to 2,527.

This morning, the Asian markets were generally soft. The Japanese Nikkei 225 was down 118 points to 17,701 and the Hong Kong Hang Seng index was down 139 points to 23,141.

“Overnight, the Caixin Chinese Services Survey was released and the reading was 43, while economists expected 39.6. February’s reading was 26.5, “noted David Madden of the CMC.

The announcement of the US non-farm payroll at 1:30 p.m. may be “irrelevant,” but traders will continue to negotiate whether it meets expectations or not.

“The consensus estimates that 100,000 jobs have been lost. The February report showed that 273,000 jobs had been created. The unemployment rate is expected to climb to 3.8% from 3.5%, while the average wage rate is expected to remain stable at 3%, “noted Madden.

On the corporate front in the UK, there will be the usual rush of coronavirus updates in which many companies will withdraw their forecasts for the whole year and suspend dividend payments.

CMC Markets, which is expected to release an update on trading, is a company that could have weathered the volatility of the market well.

Important announcements expected on Friday:

Trading announcements: ()

Economic data: Non-farm payroll in the United States, unemployment in the United States, PMI of American services, PMI of British services

Around the markets:

  • Pound Sterling: US $ 1.2373, down 0.12 cents
  • Gilding at 10 years: yield of 0.331%, up 1.72 basis points
  • Gold: US $ 1,632.30 per ounce, down from US $ 5.40
  • Crude Brent: US $ 28.60 per barrel, down from US $ 1.34
  • Bitcoin: $ 6,798, down from $ 36

City titles:

  • Financial times

  • Luckin Coffee lost almost three-quarters of its value after an internal investigation revealed “fabricated” sales worth hundreds of millions of dollars in sales last year.
  • China Mobile has chosen Chinese suppliers Huawei and ZTE to build its next generation 5G mobile network.
  • Daily Mail

  • Oil has jumped more than 20% after US President Donald Trump said that Saudi Arabia and Russia were on the verge of making massive cuts in production and ending a painful price war.
  • Standard Life Aberdeen will continue with a dividend of £ 300 million, which will ease the pressure on investors.
  • The banking industry responded after being blamed for failing to issue emergency business loans quickly enough and for abandoning those who desperately needed help.
  • Britain’s real estate market and economy could benefit from a “strong rebound” after the coronavirus crisis is over, Nationwide suggested.
  • The soap maker stripped his boss Alex Kanellis of retirement money after the board of directors found that his behavior had not lived up to his expectations while in command.
  • Morrisons will pay front line employees in its supermarkets a 6% bonus over their income over the next 12 months, managers said.
  • Ocado’s customer service ratings have plummeted in the past month, with buyers frustrated with late deliveries and product substitutions, analysts said.
  • Easyjet founder Sir Stelios Haji-Ioannou has called for a vote on whether to fire a director in a row for a £ 4.5 billion aircraft order.
  • The Guardian

  • More than 6.65 million people filed for unemployment benefits in the United States last week, with data showing the devastating economic impact of the Covid-19 pandemic.
  • The Guardian: More than 6.65 million people filed for unemployment in the United States last week, with data showing the devastating economic impact of the Covid-19 pandemic.
  • The financial regulator has announced plans to freeze loans and credit cards for up to three months as part of the emergency measures for consumers affected by the coronavirus epidemic.
  • Billionaire retailer Philip Green seeks taxpayer help to support his crumbling fashion empire Arcadia.
  • will suspend coach services at midnight on Sunday after government action to stop the spread of the coronavirus has hit demand from travelers.
  • Millions of small businesses and other organizations forced to close their premises have been warned that they may not be insured unless they take action.
  • The Daily Telegraph

  • The banking industry responded after being blamed for failing to issue emergency business loans quickly enough and for abandoning those who desperately needed help.
  • Time

  • Investors are facing a dividend famine this spring, as only 40 of the 450 UK companies listed on the FTSE 100, FTSE 250 and Aim 100 have pledged to pay dividends, according to broker Peel Hunt.
  • Serco, one of the government’s main public service providers, has postponed its long wait of six years to return to the dividend list.
  • Centrica, the owner of British Gas, has canceled its dividend after the Covid-19 pandemic which caused the price of oil to plummet.
  • Recruitment company FTSE 250 Hays has become the first company to raise capital under the new rules.
  • Street retailers suffered their worst sales decline in at least 12 years in March, figures from BDO, the accounting and business consultancy firm, show.
  • Street retailers increased the price of cough syrup by 10.7% over the past week, according to figures from the Office for National Statistics.
  • Ovo Energy has put a third of its staff on leave after canceling the meter reading and non-essential payments.



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