FTSE 100 ends in the green pushed higher by strong US markets and energy stocks

  • FTSE 100 up 18 points
  • Wall Street higher at midday
  • Amazon offers GBP50 to punctual staff

5:10pm: Blue chip energy stocks benefit from storm disruption

The FTSE 100 ended the second trading day of September positively, up 18 points (0.26%) to close at 7,168. Overseas, US markets continue to trend higher in record territories, while the 10-Year Bond Yield remains stuck in the red.

Energy stocks saw broad gains today over concern shutdowns to refineries on the US gulf coast may last longer and be more impactful than first expected.

“The energy sector has been a notable outperformer today, with ExxonMobil and Chevron following the lead from UK-listed blue-chip energy stocks BP, and Royal Dutch Shell (NYSE:RDS.A),” Joshua Mahony, Senior Market Analyst at IG wrote in an afternoon note.

Mahony added: “With hurricane Ida causing a sharp slump in US crude production, we have seen Brent crude rise to the highest level in a month. OPEC has shown few signs of bending to Joe Biden’s wish for higher production thus far, and thus the sharp decline in US output provides yet another reason for confidence from oil bulls.”

3.30pm: FTSE 100 back to green after positive start at Wall Street

The Footsie turned green again as US indices started higher on Thursday.

Traders eye a host of economic data on the way, including tomorrow’s closely watched monthly job creation number.

The Dow Jones Industrial Average added almost 138 points at 35,450 shortly after the bell.

Meanwhile, the broader-based S&P 500 gained around 17 points at 4,541. The tech-laden Nasdaq added nearly 60 points to stand at 15,370. In London, the Footsie was up 5 points to 7,155.

“The data we had from the US yesterday suggests markets need to rein in expectations for Friday’s NFP reading, with the ADP report missing by almost half and the ISM manufacturing employment sub-index slipping back into contraction territory. Of course, the ADP is hardly a reliable precursor but that was a huge miss so it’s hard to ignore,” said Craig Erlam, market analyst at Forex firm Oanda.

“Thankfully, as this may force a more cautious and patient approach from the Fed when it comes to tapering and interest rate hikes, it’s seemingly been welcomed by the markets. That will make tomorrow’s jobs report all the more interesting as a reading at, or above, expectations of 750,000 may be a nasty shock, despite being a healthy sign for the economy.”

Today’s data includes jobless claims, factory orders, and unit labor costs. There is also some more Fed commentary in the form of Atlanta president Raphael Bostic and San Francisco president Mary Daly, who are both due to speak.

2.10pm: Amazon offers GBP50 bonus to staff turning up on time

The Footsie hit the flatline in the early afternoon and remained unmoved at 7,149.

Amazon.com, Inc. (NASDAQ:AMZN) is offering permanent staff at some of its UK locations a weekly bonus of GBP50 for turning up to work on time.

The internet giant is hoping the enticement will help it meet summer and Christmas demand.

The reward is for people who have 100% attendance, excluding time taken off for sickness linked to disability and Covid, the BBC reported.

The news comes week after Amazon offered people a GBP1,000 bonus to work in its UK warehouses as its struggles to recruit staff to cope with the boom in online shopping.

1pm: Gym Group in demand as young people have no space for home workouts

The FTSE 100 stayed put at lunchtime and was still down 6 points to 7,143.

Gym Group PLC surged 7% to 304p after posting its latest interim results, where it emerged that gyms are in high demand since reopening.

“The physical gym will always be really important for people and I think that’s coming through in our numbers,” chief executive Richard Darwin told the BBC.

He said that young people don’t have enough space in their homes to work out there, so they have been flocking to the group’s 190 sites.

Total membership at 31 August was 721,000 with 1.4 visits per member per week.

In the six months to 30 June, revenue dropped 21% to GBP29mln but adjusted underlying earnings (EBITDA) were up 31% to GBP6mln.

12pm: Wall Street to open in the green ahead of jobless claims reading

The Footsie was still underwater at noon, down 5 points to 7,144.

Meanwhile, US stocks look set to edge higher on Thursday ahead of the latest weekly jobless claims and the US trade balance data.

Futures for the blue-chip Dow Jones Industrial Average, the broader S&P 500 index, and the tech-laden Nasdaq-100 all rose 0.2%.

Investors are also awaiting Friday’s always-key monthly non-farm payrolls jobs report for more clues on when and how the Federal Reserve may start tapering its bond purchases. The Fed has signalled that the labour market’s recovery is a factor in its monetary policy decisions.

After ADP private payrolls data missed expectations on Wednesday, the latest weekly jobless claims data will be released at 8.30am ET today proving more pointers to August’s monthly jobs number. Economists estimate that jobless claims will hold near coronavirus (COVID-19) pandemic lows in late August.

Meanwhile data on the US trade balance for July, also due at 8.30am, is likely to show that the deficit narrowed as consumers shifted spending towards services and away from goods.

Oil prices were higher on Thursday after the Organization for Petroleum Exporting Countries and its Russia-led allies agreed to continue increasing oil production at a meeting on Wednesday.

On the corporate front, semiconductor and software developer Broadcom Inc. and information technology company Hewlett Packard Enterprise Inc. are scheduled to post earnings after markets close on Thursday.

10.55am: JD Sports woes with Footasylum far from over

The FTSE 100 turned red in late morning, though by only 3 points to 7,146.

JD Sports Fashion PLC (LSE:JD.) reacted angrily to the UK Competition and Markets Authority again blocking its proposed acquisition of rival sportswear chain Footasylum.

The FTSE 100 retailer had appealed an earlier ruling by CMA that halted the takeover on competition concerns, but the watchdog reiterated concerns that shoppers could face higher prices or less choice.

Executive chairman Peter Cowgill said: “We have made compelling submissions on the committed positioning of the global brands towards Direct to Consumer and the consequent impact on an extremely competitive marketplace.”

“I am perplexed and again disappointed that these have been rejected. “

The competition watchdog first blocked the GBP90m takeover last year and said many of its concerns then still remained.

“This deal would see Footasylum bought by its closest competitor and, as a result, shoppers could face higher prices, less choice and a worse shopping experience overall,” said Kip Meek, chair of the CMA inquiry.

“While many stores were closed during lockdown, online sales in this market have been stronger than ever, and revenue from in-store sales is rebounding as people return to the High Street.”

The stock was flat at 1,040.5p on Thursday morning.

10am: Melrose top riser after strong interims

The FTSE 100 stayed put and was up only 3 points to 7,153 in mid-morning.

Melrose Industries PLC (LSE:MRO, OTC:MLSPF, FRA:27MA) was the top riser in the index, surging nearly 6% to 181.44p on the back of its half-year report.

The manufacturer said business continues improving after the COVID-19 crisis, and it expects that the full operating margin benefit and targets to be delivered.

In the six months to 30 June, revenue rose to GBP3.5bn from GBP3.3bn last year, while the group swung to an adjusted profit before tax of GBP141mln from a GBP105mln loss a year ago.

“Melrose has been working to get its balance sheet in check, with a series of disposals, cost saving efforts and a massive reduction in pension obligations. That’s opened the door for rising shareholder returns, and we were encouraged to see the group upping its capital returns by 15p this year. If all goes to plan, there should be more where that came from,” said Laura Hoy, analyst at Hargreaves Lansdown.

“That’s not to say it’s all smooth sailing ahead, though. Melrose is at the centre of several strong headwinds. Supply chain issues, input inflation and pandemic-related disruption continue to hang like a dark cloud over the group’s progress. However, you can’t knock Melrose’s progress–restructuring during a pandemic is no small feat.”

8.45am: FTSE 100 flat as a pancake ahead of US jobs stats

The FTSE 100 opened flat as a pancake on thin volumes as traders opted to keep their powder dry ahead of US jobs data later.

This followed a mixed session in Asia earlier, which continues to be haunted by concerns over the Chinese economy and worries over the spread of the Covid delta variant.

Here at home, better-than-expected current trading trends helped lift stock in the engineer Melrose Industries (LON:MRO) to the top of the Footsie list of risers with a 4.5% gain.

Rightmove (LON:RMV), up 1.7%, appears to have received a belated bump from the latest house price data.

Moving in the other direction was BHP (LON:BHP), down 5.5% after it began trading without entitlement to a very chunky dividend payment.

Consumer products giant Unilever (LON:ULVR), and logistics giant Coca-Cola HBC (LON:CCH) were off 2.4% and 1.7% respectively after downgrades from JP Morgan Cazenove.

6.50 am: Footsie called lower

The FTSE 100 looks set for a tepid start to Thursday as markets drift with little but macroeconomics to focus on.

IG Markets sees London’s blue-chip benchmark around 5 points lower, making a price of 7,135 to 7,138 with just over an hour to go until the open.

Markets remain somewhat in vacation mode, in London at least, before going up the gears in the coming weeks as the City’s progeny return to school and traders properly get their feet back under their desks.

In the meantime, much of the attention remains on macroeconomics especially employment data in America and PMI in China where a slowdown is feared.

“The latest PMI numbers from China this week have been particularly disappointing, as concerns grow that the slowdown there is starting to get more entrenched,” said Michael Hewson, analyst at CMC Markets.

“In Europe the latest manufacturing PMI numbers from Spain, Italy, France and Germany still looked fairly solid, as did the UK numbers, while in the US, another disappointing ADP employment report only served to reinforce Fed chairman Jay Powell’s cautious comments about a possible tapering of asset purchases at Jackson Hole last week.”

The analyst added: “We also know that job vacancies are at record levels, which suggests that people are being selective in terms of returning to the workforce. With the various unemployment and stimulus benefits coming to an end this month, we should see hiring start to accelerate during September, even if tomorrow’s jobs report is disappointing.”

Wall Street indices were a mixed bag on Wednesday. The Dow Jones was marked down 0.14% at 35,312 whilst the S&P 500 moved slightly higher to 4,524.

The Nasdaq keep hold of recent gains and remains in the vicinity of its record highs, printed 0.33% higher to close Wednesday at 15,309.

Elsewhere, the small-cap centric Russell 2,000 kicked 0.58% upwards to 2,287.

Around the markets

The pound: US$1.3775, up 0.04%

Gold: US$1,812 per ounce, down 0.02%

Silver: US$24.13 per ounce, down 0.09%

Brent crude: US$71.37 per barrel, down 0.36%

WTI crude: US$68.33 per barrel, down 0.24%

Bitcoin: US$49,600, up 4.6%

Ethereum: US$3,767, up 7.26%

6.50am: Early Markets – Asia / Australia

Stocks in the Asia-Pacific region were mixed on Thursday as Australia recorded a trade surplus of A$12.117 billion in July, according to data released by the country’s Bureau of Statistics.

That was much higher than the A$10.2 billion surplus predicted in a Reuters poll.

The Shanghai Composite gained 0.51% but Hong Kong’s Hang Seng index slipped 0.04%

In Japan, the Nikkei 225 gained 0.26% while South Korea’s Kospi fell 0.87%.

Australian shares declined, with the S&P/ASX 200 trading 0.54% lower in the last hour of trade.


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