The release of America's monthly jobs figures will today provide a test of recent speculation that US interest rates are set to reverse next year.
The FTSE 100 is higher ahead of the non-farm payrolls, with Sainsbury’s and BAE Systems among the stocks doing well after broker upgrades.
In corporate developments, Berkeley Group hit out at planning rules as it reported a rise in first-half profit before tax in a "subdued" market.
FTSE 100 Live Friday
Berkeley hits out at planning rules
Jobs figures keep US rates in focus
Sainsbury's shares rally after upgrade
FTSE closes up 0.6%
Friday 8 December 2023 16:59 , Simon Hunt
The FTSE 100 has closed up 0.6% at the end of the day's trading session in London.
It's not been the easiest week for the FTSE, in which a host of firms have either mulled switching to another exchange or have been snapped up by private equity.
But there could still be a pipeline of companies joining the exchange next year, including, as we revealed today, the firm behind the London Tunnels re-opening,.
The Standard City liveblog will be back at 7am Monday morning.
Here's a last look at your key market data.
US jobs report beats expectations
Friday 8 December 2023 13:33 , Daniel O'Boyle
The US unemployment rate dipped to 3.7% in the latest sign that the world's largest economy appears to have successfully engineered a "soft landing" from inflation.
The country added 199,000 jobs last month, beating the expected figure of 190,000.
Richard Flynn, Managing Director at Charles Schwab UK notes:
“Today’s jobs report has exceeded expectations, indicating to investors that demand in the labour market remains strong. Recent economic data has suggested that the labour market could be cooling off, but today’s figures may de-rail hopes that the Fed will cut rates sooner, rather than later. Slower job growth and slower inflation growth would show Central Bankers that they are fulfilling their dual mandate. Today we have seen that, for employment, this month’s job’s report does not reflect the cooling that the market is likely hoping for, so it might push the needle in terms of what we can expect from Fed policy in coming months.”
Public thinks inflation will still be too high in late 2028
Friday 8 December 2023 12:35 , Daniel O'Boyle
The public believes that inflation will still be too high in late 2028, a Bank of England survey has revealed.
The Bank of England/Ipsos Inflation Attitudes Survey suggests that the public doubts the Bank’s ability to bring inflation down to the 2% target. When asked what they expect the rate of inflation to be a year from now, respondents gave a median answer of 3.3%. For three years from now, they said 2.8%.. In five years, they said it will be 3.2%.
The last figure is up from the 2.9% prediction when the survey was last conducted, in August, suggesting declining faith in the Bank’s ability to keep the rate of price rises at its target of 2%.
Exclusive: Secret WWII tunnels set to surface on London stock market
Friday 8 December 2023 12:22 , Simon Hunt
The business planning to turn a secret network of Second World War tunnels under Holborn into a major new visitor attraction has made the first preparations for a London stock market listing, the Standard has learned.
The firm, known as London Tunnels, last month changed its name to London Tunnels Plc and restructured its shares pending “admission…and trading on the London Stock Exchange’s Main Market,” Company House filings show.
London Tunnels declined to comment on its listing plans.
The firm last week submitted a planning application to reopen the vast subterranean site at a cost of £220 million. The tunnels were built during the Blitz to serve as a shelter, before being used by the Special Operation Executive, the forerunner of MI6.
CEO Angus Murray told the Standard: “All those men and women that sacrificed their lives during the Second World War gave their lives to protect our democratic rights and this is an asset that we can use to tell that story.”
Promised reforms to City ‘feel like a damp squib’, says Treasury Committee
Friday 8 December 2023 11:37 , Daniel O'Boyle
A set of reforms to the City promised by the Chancellor last year have been left feeling like a “damp squib” as much of what he said he has delivered has not materialised, an influential group of MPs has said.
The Treasury Committee said the Chancellor claimed to have completed 21 of the 31 reforms to financial services he set out last year.
The group’s analysis found that six of the 21 are in fact not complete, and a further six should not have even been considered reforms in the first place.
These are things like publishing documents or welcoming a consultation, which is not the same as reforming something, the committee said.
CMA launches OpenAI-Microsoft probe
Friday 8 December 2023 10:29 , Daniel O'Boyle
The competition watchdog is to probe Microsoft’s partnership with OpenAI, the company behind ChatGPT.
Microsoft owns a substantial share of OpenAI, believed to be a 49% stake. But the Competition and Markets Authority (CMA) is now seeking views on whether this partnership could lead to weaker competition in the market for AI products.
The CMA said: “Microsoft Corporation (Microsoft) has a long-term partnership with OpenAI, Inc. (OpenAI), involving a multi-year, multi-billion dollar investment and agreement to collaborate across artificial intelligence (AI) supercomputing and research. As part of the agreement, Microsoft and OpenAI are able to independently commercialise resulting AI technologies and Microsoft is the exclusive provider of cloud services to OpenAI.”
Sainsbury's rallies after upgrade, FTSE 100 makes progress
Friday 8 December 2023 10:25 , Graeme Evans
Sainsbury's today rose 3% or 8.7p to 298.8p after Goldman Sachs backed the supermarket with a “buy” recommendation and new 350p target price.
In a session when Tesco fell 0.8p to 287.7p, Sainsbury’s reached a near two-year high alongside a gain of 22.8p to 637.8p for M&S retail partner Ocado.
London’s top flight improved 41.14 points to 7554.86, with BAE Systems and Rolls-Royce among other stocks to benefit from favourable City comment.
Rolls continued its momentum by adding another 3.6p to 289.8p as UBS backed the turnaround story through a sweetened price target of 400p.
Deutsche Bank also hiked Rolls to the same level, while moving its price estimate on BAE Systems to 1270p amid expectations for 10% annual earnings growth up to the end of the decade.
Anglo American shares were the worst performing after the diamonds-to-copper mining giant set out its spending and production guidance for the next three years.
Capital expenditure is set to reduce by more than expected as boss Duncan Wanblad positions Anglo for current economic conditions through lower output in the next two years before a return to growth in 2026.
Shares fell 121.5p to 2103p as Wanblad’s presentation to City analysts also appeared to rule out any simplification of Anglo’s portfolio.
The FTSE 250 index improved 0.5% or 93.68 points to 18,712.42, with Watches of Switzerland extending yesterday’s trading update rally by another 26p to 677p.
Average two-year fixed mortgage rate falls below 6%
Friday 8 December 2023 09:32 , Daniel O'Boyle
The average interest rate on a two year fixed mortgage had fallen below 6% for the first time since June in another boost for the housing market.
Analysts Moneyfacts said the average rate on one of the most popular mortgage products now stands at 5.99%, down from 6.01% yesterday. That’s the lowest since-mid-June.
Mortgage rates soared this year as the Bank of England repeatedly hiked interest rates to bring inflation back under control. But as the rate of price rises began to cool, the Bank paused its cycle of 14 consecutive hikes. Mortgage rates were already falling before that, as City traders anticipated a pause coming soon, but they declined further on the back of the recent pauses, as well as falling inflation rates.
On 31 July, the average two-year fixed-rate mortgage had an interest rate of 6.81%. That was the highest rate in 15 years.
Paddy power owner Flutter sets date for US listing
Friday 8 December 2023 08:57 , Daniel O'Boyle
Betting giant Flutter Entertainment has revealed the date that it will list its shares on the New York Stock Exchange.
The firm, which owns Paddy power and Sky Bet, will start trading on 29 January, and will cancel its Dublin-listed shares the week before.
Its primary listing will remain in London for now, meaning it will remain a FTSE 100 member, but management has repeatedly suggested that the long-term goal is a primary listing in the US, and membership of US indices.
Anglo American under pressure, Rolls and BAE higher in flat FTSE 100
Friday 8 December 2023 08:20 , Graeme Evans
Anglo American shares have fallen 6% after the diamonds-to-copper mining giant set out spending and production guidance for the next three years.
Chief executive Duncan Wanblad expects lower output in the next two years before a return to growth in 2026. Shares fell 143p to 2081.5p.
Stocks on the front foot included Sainsbury’s, which rose 3% or 9.8p to 300p after Goldman Sachs shifted to a “buy” recommendation with a new 350p target price.
Rolls-Royce also rose another 2.2p to 288.4p after Deutsche Bank upped its valuation estimate to 400p, while also upgrading BAE Systems. The defence giant lifted 7.5p to 1026.5p after the bank increased its target price to 1290p.
The FTSE 100 index was unchanged at 7514 while the FTSE 250 index improved 3.62 points to 18,622.36.
Berkeley Group hits out at planning system as it extends profit pledge in 'subdued' market
Friday 8 December 2023 07:43 , Michael Hunter
The London-focused developer that builds 10% of the capital's new homes hit out at the planning system today as it reported a rise in first-half profit before tax in a "subdued" market.
Berkeley Group's interim profit rose almost 5% to £298 million. The average selling price of its homes rose to £624,000 from £560,000. Reservations fell by a third as "the sales market lacks urgency" and looked set to remain "subdued".
It extended its profit pledge – saying it will deliver at least £1.5 billion of pre-tax profit over three years to April 30, 2026 – having previously targeted £1.05 billion over two years to the end of April 2025.
Berkeley built 87% of its 1.785 new homes on brownfield land in the six months to the end of October.
Its CEO, Rob Perrins, said today that investment was being driven away from urban areas by the red tape surrounding the process.
"Despite urban regeneration being a clear national priority, it has become increasingly difficult to progress this form of development as changes to planning, tax and regulatory regimes have created an increasingly uncertain, unpredictable and burdensome environment."
IG Group backs ex-bet boss Corcoran as new CEO
Friday 8 December 2023 07:34 , Daniel O'Boyle
City trading house IG Group has picked former Paddy Power Betfair boss Breon Corcoran as its new CEO.
He replaces June Felix, who left due to poor health in August.
IG has struggled this year as the pandemic-era retail trading boom slowed down. In October, it laid off 10% of its staff as part of a cost-cutting scheme to save £50 million.
Corcoran was CEO of Betfair from 2016 until its merger with Paddy Power to create the gambling giant now known as Flutter. He was also in charge of payments business WorldRemit, leaving in 2022 as its plans to go public stalled.
Mike McTighe, IG Group chair, said: "I am very pleased to announce Breon's appointment following a comprehensive global search.
“He is a proven leader of high performing teams within multinational organisations, with an ability to deliver results for all stakeholders. The board is confident that Breon is the right person to lead IG and deliver the next phase of growth.
“I look forward to working with him.”
Wall Street higher ahead of jobs report, Tokyo stocks struggle
Friday 8 December 2023 07:26 , Graeme Evans
A report on the US jobs market due this afternoon will test recent speculation that Federal Reserve interest rates may be cut in the first part of next year.
Economists expect a 180,000 rise in non-farm payrolls, compared with 130,000 in October, as they look for further signs that the US economy is slowing under the weight of recent interest rate rises.
Wall Street rallied ahead of the release, with the S&P 500 index up 0.8% and the Nasdaq Composite 1.4% stronger following a robust session for the Magnificent Seven of mega-cap stocks.
A rise of 5% for Alphabet led the way after the Google owner launched its latest artificial intelligence model, while Meta Platforms and semiconductor giant Nvidia both rose 2%.
The US handover means CMC Markets expects the FTSE 100 index, which finished flat in Thursday’s session, to open 20 points higher at 7533.
In Asia, the Nikkei 225 fell 1.7% after Japan’s economy contracted by more than expected in the third quarter and traders focused on a potential end of negative interest rates.