FTSE 100 closes ahead midweek but Wall Street mixed after ADP jobs report; Just Eat top Footsie gain

  • FTSE 100 closes ahead
  • Wetherspoons hit by driver shortages
  • US stocks still mixed

5pm: FTSE closes ahead

FTSE 100 closed in positive territory midweek but Wall Street was mixed as the weaker-than-expected US ADP private sector jobs data dented investor sentiment.

The UK index of the biggest shares closed nearly 30 points, or 0.42% higher, at 7,149.

FTSE 250 was also up 148 points, or 0.62%, to 24,250.

In August, according to the ADP report, the US economy added 374,000 jobs, while more than 613,000 had been expected. Also July’s print was revised down to an addition of 326,000.

“The FTSE 100 has spent the day giving back its earlier strong gains, and while ‘tech names’ like Just Eat Takeaway and Ocado have made headway it is miners that have trimmed the opening bullishness of the index; the index’s retreat came in the wake of the US ADP numbers, as the caution afflicting US cyclical names spread to London,” said Chris Beauchamp, the chief market analyst at online trading group IG.

On Wall Street, the Dow Jones Industrial Average lost around 30 points at 35,330. The broader based S&P 500 shed around seven to 4,530, while the tech heavy Nasdaq added nearly 102 points to stand at 15,361.

Top Footsie riser was Just Eat, which gained 7.56% to 7,055p

3.30pm: Wetherspoons is Brexit victim as lorry crisis hits beer supplies

The Footsie continued trimming its gains ahead of close and was up 32 points to 7,152.

Britain’s shortages crisis has now reached the pub sector with JD Wetherspoon (LSE:JDW)’s apologising to customers after running out of two of its favourite beers – Carling and Coors.

After tweets from pubs with signs that Carling and Coors were not available Wetherspoons spokesman Eddie Gershon confirmed to reporters “We are experiencing some supply problems with both Carling and Coors, which means that some pubs do not have the products available.

“We apologise to our customers for any inconvenience caused.

“We know that the brewers are trying to resolve the issue.”

The news sent Twitter buzzing as Wetherspoons founder and chairman Tim Martin is a prominent and vocal Brexit supporter.

For some reason, shares were up 2% to 1,130p on Wednesday afternoon.

2.50pm: US indices in mixed open after disappointing ADP payrolls reading

The FTSE 100 as US indices missed expectations with a mixed open.

The Dow Jones Industrial Average was flat at 35,359, with the S&P 500 and the Nasdaq up 0.18% to 4,530 and 0.55% to 15,343 respectively. Meanwhile, the UK’s leading index jumped 38 points to 7,157.

Wall Street was disappointed by the latest ADP payrolls reading, which saw a 375,000 increase in August missing the 675,000 forecast.

“ADP payrolls fell well short of expectations on Wednesday, coming in almost half of market forecasts and potentially sending a terrible warning sign ahead of Friday’s jobs report. As we’ve seen so often in the past, the data piqued the interest of those in the markets but didn’t get much of a reaction, owing to its rare ability to actually provide reliable insight into the jobs report two days later,” analysts at OANDA commented.

“There are obviously downside risks to the outlook for the rest of this year, with the spread of delta naturally casting a shadow over the global recovery but there’s also plenty of reason to be hopeful. Not only is the economy in a far better position than previously feared, vaccine rates in many countries mean restrictions during surges will be far less severe than before and central banks will be in no rush to withdraw stimulus. We are hearing a lot more talk of tapering of pandemic stimulus and rate hikes but this will be extremely gradual and heavily communicated.”

1.35pm: EU market regulator sees risk of market corrections as valuations are too high

The Footsie stayed at lunchtime, up 57 points to 7,177.

EU securities markets regulator ESMA said the markets face potential corrections as valuations are at or above pre-pandemic levels, thanks to the economic recovery and low-interest rates.

It said the fundamentals are “fragile” and there is high risk and uncertainty over the sustainability of corporate and public debt as well as rising inflation expectations.

Rising valuations across classes, massive price swings in crypto-assets and event-driven risks “raise questions about increased risk-taking behaviour and possible market exuberance”.

“Going forward, we expect to continue to see a prolonged period of risk to institutional and retail investors of further – possibly significant – market corrections,” the regulator said.

“Current market trends will need to show their resilience over an extended period of time for a more positive risk assessment to be made.”

12.15pm: Wall Street stocks to open higher

The Footsie was on the rise again at noon, advancing 58 points to 7,178.

US stocks are expected to push higher on Wednesday ahead of manufacturing data, buoyed by hopes US interest rates will remain on hold for the foreseeable future even if the Federal Reserve starts to taper bond purchases.

Futures for the blue-chip Dow Jones Industrial Average and the broader S&P index 500 both gained 0.4%, while contracts for the tech-laden Nasdaq-100 added 0.3%.

The main indices slipped back on Tuesday, albeit with the S&P 500 and Nasdaq Composite having risen to all-time highs after Fed chairman Jerome Powell appeared to disengage rate rises from tapering moves in a speech on Friday.

Investors will eye US manufacturing data on Wednesday to see whether the coronavirus (COVID-19) Delta variant has dented the pace of the economic expansion. The Institute for Supply Management’s survey of manufacturing purchasing managers, due at 10am ET, is expected to show activity expanded at a slower pace in August than in July.

Earlier on Wednesday, a private manufacturing survey in China fell to its lowest level in over a year, suggesting COVID-19 outbreaks had led to a decline in activity in August.

Oil prices rose on Wednesday ahead of a meeting of members of the Organization of the Petroleum Exporting Countries, Russia and the cartel’s other partners. The group agreed in July to boost output by 400,000 barrels a day each month through the end of 2022. Since then, the spread of the Delta variant of coronavirus has threatened to stall the recovery in demand, prompting volatility in oil prices.

On the corporate news front, Campbell Soup is due to report quarterly results ahead of the opening bell, while Costco (NASDAQ:NA:COST) Wholesale is scheduled to publish monthly sales data after the market close.

11.15am: UK pumps introduce new standard grade of petrol

The FTSE 100 trimmed its gains in the late morning and was up 46 points to 7,166.

All UK pumps have introduced a new standard grade of petrol as of Wednesday.

The E10 grade is replacing the old E5 because it’s deemed greener. It’s expected to cut transport emissions by the equivalent of taking 350,000 cars off the road each year.

Over 95% of all petrol vehicles are compatible with E10, with the remaining 5% of older vehicles, including classic cars and some from the early 2000s, still able to access E5 petrol in the ‘Super’ grade.

E10 will not be more expensive at the pump than current standard petrol, the government noted, but it will impact fuel economy by 1%.

The E10 rollout this month will also support the increased production of biofuels at bioethanol plants in the north-east of England, providing 200 new direct jobs and supporting the existing ones.

Asda said it will only offer one option for unleaded fuel, while Tesco PLC (LSE:TSCO) will provide it at 90% of its forecourts. J Sainsbury PLC (LSE:SBRY) and Esso will also offer it at the majority of their stations.

9.40am: UK manufacturing slows down in August due to supply chain issues

The FTSE 100 built on its gains in mid-morning, surging 62 points to 7,181.

The IHS Markit/CIPS manufacturing PMI fell to a five-month low of 60.3, a tick below July’s 60.4 but above the long-run average of 51.9.

UK manufacturers continued to face supply chain issues during August, causing a slowdown in production and higher input prices.

Companies still managed to achieve solid gains in output, new orders and employment.

The outlook for the UK manufacturing sector also remained bright in August. Almost 66% of companies indicated that they expect output to rise over the coming year, compared to only 4% forecasting a decline, according to the survey.

“A wide range of factors contributed to the disruption, including port capacity issues, international shipping delays, the re-imposition of COVID restrictions at some key points in global supply networks and ongoing issues post-Brexit. With all of these factors likely to persist for the foreseeable future, manufacturing could well see a further growth slowdown in the coming months,” said Rob Dobson, director at IHS Markit.

“The impact of supply issues is also feeding through to rapid price inflation. Rates of increase in both input costs and selling prices remained close to record highs in August, as rising demand chased constrained supply and companies moved to pass on price increases to clients and consumers alike. This is affecting most markets, but especially autos, metals, food stuffs and electronics.”

8.30am: FTSE 100 wakes from its summer slumber as Nationwide data charts lockdown house price boom

The FTSE 100 got September off to a strong start as London began to wake from its summer slumber.

The amuse bouche ahead of the UK Manufacturing Purchasing Manager’s Index at 9.30 am was the Nationwide house prices print.

It showed the average price of a home is worth GBP248,857, up 11% year on year and 13% since the onset of the pandemic.

With the Stamp Duty holiday over, analysts are expecting some heat to come out of the market.

Shares in the online estate agent Rightmove (LON:RMV) were little moved by the Nationwide update.

Morgan Stanley (NYSE:MS) waded into the property sector Wednesday, moving its stance on a bunch of stocks from negative to ‘equal-weight’.

Among them was Land Securities (LON:LAND), which was up 1.6% early on.

On the FTSE 250, 888 Holdings (LSE:888) (LON:888) was rose 2.8% after results, which provided a bump to rival gambling group Entain (LON:ENT), which nudged 1.9% higher early on.

6.50am: FTSE 100 set to open in the green

The FTSE 100 is expected to open in the green on Wednesday, recovering some of Tuesday’s losses.

London’s leading index is called 35 points higher according to spreadbetter IG.

“No major moves in equities yesterday as investors are waiting for the next driver to appear,” analysts at Deutsche Bank (NYSE:DB) said.

“Styles and sectors very tightly bunched and very few areas sticking out yesterday. Equity investors are so far ignoring disappointing key figures but their confidence will probably be tested again today as more heavyweight numbers are due.”

Today is a big PMI-day, with manufacturing readings on both sides of the Atlantic. In the UK it’s tipped to be 60.1, down a tad from the preceding month’s reading of 60.4 while in the US, it will likely continue to reflect bottlenecks in the manufacturing sector.

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mostly higher on Wednesday as China’s Caixin/Markit manufacturing Purchasing Managers’ Index for August came in at 49.2, below the 50 mark that separates expansion from contraction.

Despite the weaker factory activity, China’s Shanghai Composite gained 0.59% and Hong Kong’s Hang Seng index rose 0.62%

In Japan, the Nikkei 225 gained 1.22% while South Korea’s Kospi lifted 0.20%.

Australia’s S&P/ASX 200 index was 0.13% lower in the last hour of trading.



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