Stock Market Volatility, Omicron Variant, Oil Price, OPEC Meeting, Brent Crude Futures, US Non-Farm Payrolls, US Unemployment, US Federal Reserve – .

18-month high for index, Pearson disappoints, Rio Tinto hit by labor shortage – .

TThe 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.

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US Travel Reopens Gives International Boost to UK Services, PMI Says

Businesses 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.

FTSE 100 loses momentum despite oil gains

The FTSE 100 index dropped its initial gains to remain broadly unchanged from last night’s 7129, despite a strong session for energy stocks following the rise in oil prices and a large upside from City for BP.
Brent crude futures, which fell to $ 66 a barrel yesterday, have returned above $ 71 after the OPEC oil cartel left the door ajar to further changes in production.
Deutsche Bank’s oil team said today: “Omicron’s reluctance and concerns about a potential oversupply of oil in 2022 are understandable, but we believe the $ 12 per barrel drop in Brent over from last week will prove to be an overreaction in due course. “
They note that crude stocks are below five-year averages and that several OPEC members have struggled to meet their quotas.
Deutsche Bank now rates BP as a ‘buy’ after raising its price target by 26% to 404p, pushing stocks up 5.35p to 341.95p atop the FTSE 100 index. Royal Dutch Shell rose by 15p to 1644.2p, compared to the bank’s 2038p target.
Other hikes included British Airways owner IAG, which moved away from Tuesday’s low of 127.5p by adding 1.6p to 133.9p. It was 154.3p before the variant was discovered.
The FTSE 100 index rose 9.53 points to 7138.60, but was at 7196 earlier in the session. The domestically-focused FTSE 250 index rose 114.37 points to 22,799.37 as vacation company TUI rose 3%.
Home improvement chain Wickes jumped 10% as it improved its earnings forecast amid continued strong demand for its Do It For Me services. Shares improved 22.2 pence to 237.2 pence, but Liberum analysts estimate they are worth 450 pence.

Nationwide debauch TSB boss for top job

Debbie Crosbie has taken the most senior position in the Nationwide Building Society today, becoming responsible for running one of Britain’s most important financial institutions.
As the largest member-owned mutual, Nationwide exists as a permanent counterpart to the banks.
He says, with evidence, that because he has no shareholders he can offer better deals on savings and mortgages.
It is the second largest mortgage lender in the UK.
Crosbie, 51, is currently the struggling CEO of TSB. Prior to that, she missed the top job at CYBG, now Virgin Money.

Losses increase at Cellular Goods backed by David Beckham

Cellular Goods, the cannabis skincare company backed by David Beckham, has seen its losses skyrocket over the past year as it invests in production set-up and its IPO. .
Cellular Goods, which went public in London in February, lost £ 3.3million in the 12 months to the end of August. The company, which only recently launched its first product, did not make any sales. The company has raised £ 13million on its list and still has just over £ 9million in the bank.
The losses were well above the £ 330,000 recorded in 2019. The jump was sparked by IPO costs, investment in starting a business and a one-time charge of £ 900,000 linked to a action-based bonus for management and staff.

IAG share continues to recover

The FTSE 100 index is up 0.7% or 52.89 points to 7,182.10, still a long way from the 7310 observed before Omicron volatility.
Oil inventories fueled today’s rebound as Brent crude quickly recovered the ground lost following Thursday’s OPEC meeting.
BP also got an upgrade from Deutsche Bank to increase 2% or 7.85p to 344.45p, while Royal Dutch Shell added 22.6p to 1651.80p.
British Airways owner IAG continued its recent improvement, up 2.68 pence to 135 pence. Shares were at 154.3p before the variant was discovered and closed at 127.5p on Tuesday.
The FTSE 250 index improved 150.48 points to 22,835.32, with easyJet up 2%.

Brent rallies, BP shares are revalued

Brent crude futures fell below $ 66 a barrel at some point yesterday after Opec and its allies were blocked by existing production plans.
However, the respite was only temporary, as the price is now back above $ 71 after the cartel left the door ajar for further measures pending the evolution of the pandemic.
Deutsche Bank’s oil team said, “The omicron-inspired reluctance and concerns about the potential oversupply of oil in 2022 are understandable, but we believe Brent’s $ 12 / barrel drop over the week last will prove to be an overreaction in due course. “
They note that crude stocks remain below five-year averages and that several OPEC members are struggling to meet their quotas.
Bolstered by these expectations, City Bank raised its price targets for several major European oil companies. Deutsche Bank now rates BP as a “buy” with a price target 26% higher at 404p, while the forecast for Royal Dutch Shell “A” shares is 8.9% higher at 2038p.

Improving trend in the US labor market

Today’s US jobs report for November comes within two weeks of the Federal Reserve’s next meeting, where policymakers will decide whether to step up the pace of waning economic support .
US economists at Deutsche Bank expect non-farm payrolls to increase by 600,000, which would be the fastest pace since July and bring the unemployment rate to a post-pandemic low of 4.4% .
Further signs of encouragement appeared in last night’s weekly claims report, with a better-than-expected number of 222,000.
The Federal Reserve is reducing its bond purchase level by $ 10 billion in Treasuries and $ 5 billion per month in mortgage-backed securities, but President Jerome Powell reported this week that a pace faster might be needed due to concerns about inflation.

Rising oil prices and rising FTSE 100

A week’s roller coaster ride for the stock markets as they fluctuate in response to developments around the Omicron variant is about to end on a high today.
CMC Markets forecast the FTSE 100 index to rise 34 points to 7163, with sentiment boosted by a strong rebound in US markets last night after weekly jobless claims indicated continued resilience in the labor market.
The monthly non-farm payroll figure is due for release later today, with a figure likely to increase pressure on the Federal Reserve to accelerate the reduction of its massive bond-buying program.
Equity market confidence will also be tested at a later stage by the release of figures in the UK and Europe covering activity levels in the services sector.
Oil prices, meanwhile, rebounded after Opec and its allies agreed yesterday to stick to existing production plans for an additional 400,000 barrels a day in January.
The move follows calls from world leaders to do more to curb inflationary pressures.
The uncertainty over the impact on demand of the Omicron variant has already wiped out more than $ 10 a barrel from the price of oil, and Opec has made it clear that it is ready to make “immediate adjustments” if the economy world was slowing down.
This commitment contributed to today’s 2% rise in Brent crude futures to $ 70.87 and West Texas Intermediate (WTI) futures to $ 67.73 per barrel.
Oanda market commentator Jeffrey Halley said: “Unless we get a major escalation from Omicron, I’ll pull the neck and say this week’s lows for Brent and WTI probably represent the lowest in the medium term. “


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