FTSE 100 dips into the red; Wall Street opens on a mixed footing following US jobs data
- FTSE 100 index falls 10 points
- US stocks start mixed
- US private sector adds 174k jobs in January
2.47pm: Mixed start for US stocks
The Wednesday session on Wall Street was off to a mixed start on Wednesday as investors digested the latest set of US ADP jobs figures and took heart from last night’s big tech earnings.
In the early minutes of trading, the Dow Jones Industrial Average was down 0.23% at 30,618 while the S&P 500 climbed 0.29% to 3,837 and the Nasdaq rose 0.39% to 13,666.
The mostly positive start followed the ADP private sector jobs report for January, which showed that the US private sector added 174,000 jobs during the month, well ahead of consensus estimates of 70,000 and rebounding from a loss of 78,000 in December.
In light of the data, Ian Shepherdson at Pantheon Macroeconomics said the ADP data made an increase in non-farm payrolls data on Friday a “decent bet” and that looking ahead the reopening of some US states “ought to provide a modest lift to payrolls in February, with bigger gains likely from March onwards, assuming the vaccination rollout continues to gather pace and the more infectious UK variant does not force states into keeping restrictions in place for longer”.
Meanwhile, shares in Amazon made a subdued start to the session despite its blockbuster earnings overnight, down 0.2% at US$3,373 in early trading. Meanwhile, fellow overnight reporter, Google parent Alphabet Inc (NASDAQ:GOOGL), saw better luck as it jumped 5.5% to US$2,025.
Back in London, the FTSE 100 was slowly slipping further into the red, shedding 10 points to 6,506 at 2.45pm.
1.20pm: FTSE flags but housebuilders lifted by upgrades
The FTSE 100 is in the doldrums after its brighter performance earlier. Disappointment with the outlook from GlaxoSmithKline PLC (LON:GSK) – now down 4.71% at 1303.6 and the biggest faller in the leading index – tempered some of investors’ zeal.
But housebuilders have been lifted by a spate of positive broker recommendations. Persimmon (LON.PSN) is up 2.07% at 2714p while Taylor Wimpey (LON.TW) has built up a 1.91% rise to 157.5p. Both have been upgraded by Barclays’ analysts while Redrow (LON.RDW) – up 4.39% to 558.5p – has been given a lift by JP Morgan.
The FTSE 100 is up just 0.02% at 6517.75 while the FTSE 250 is faring slightly better, up 0.46% at 20,784.94.
12.40pm: Wall Street to start mostly higher
The main indices are all expected to open mostly in the green on Wednesday as a set of blockbuster earnings from tech giants lifted sentiment.
Spread-betters at IG expect the Dow Jones Industrial Average to open mostly flat, while the S&P 500 is expected to rise 12 points and the Nasdaq is predicted to jump 82 points.
Strong earnings data from Amazon Inc (NASDAQ:AMZN) and Google parent Alphabet Inc (NASDAQ:GOOGL) after yesterday’s close have likely boosted investor optimism over the market’s big hitters, while hopes for more stimulus from the federal government and the ongoing rollout of the coronavirus vaccine has also lifted hopes that the pandemic could be entering its final stages.
Another factor behind the higher start may be the reduction in volatility following last week’s trading frenzy over heavily-shorted stocks such as GameStop Corp (NYSE:GME) and AMC Entertainment Holding Inc (NYSE:AMC), providing some investors with greater confidence to jump back into the market.
US services PMI data later today could also provide some movement catalysts as traders get more clarity over the state of the US economy.
Meanwhile, other names in the earnings diary attracting attention today is music streaming giant Spotify Technology SA (NYSE:SPOT), which reported revenues that were above expectations in its fourth quarter but also delivered a more downbeat outlook for the first quarter of its current financial year.
Back in London, the FTSE 100 was little moved into the lunchtime session, up just 3 points at 6,519 at around 12.35pm.
One notable mover was pharma giant GlaxoSmithKline PLC (LON:GSK), which was down 4% at 1,313p despite a 17% pre-tax profit rise to nearly £7bn in 2020 as the company warned that the profit figure would be lower for the coming year.
The company has forecast a decline in adjusted earnings per share in the mid to high-single-digit percentage range.
11.30am: Footsie continues to rebound on vaccine optimism
Leading shares continue to rebound after an earlier wobble, with hopes that the UK rollout of the Covid vaccine will see some light at the end of the dark lockdown tunnel. Joshua Mahony, senior market analyst at IG said: “News that the AstraZeneca vaccine appears to slow the transmission of the virus has been heralded as a significant breakthrough, with many fearing that it may simply lessen the chance of a deadly infection rather than completely stopping patients catching the virus at all. With the UK being so reliant upon the AstraZeneca vaccine, any good news for that particular jab has substantial consequences for the reopening prospects in this country.”
Spirits have also been lifted by expectations that the recent volatility surround GameStop and the narrative of Reddit investors versus Wall Street may have calmed down. US Treasury secretary Janet Yellen is expected to meet regulators to discuss the situation. Mahony said: ” Some will see it as a move to support the hedge fund billionaires over the retail investor, but markets are clearly seeing it as a positive that we could see action which may lessen the kind of volatility seen recently.”
The FTSE 100 is currently up 22.73 points at 6539.38.
10.00am: UK service sector slumps at fastest rate since last May
Britain’s service sector activity fell at its fastest rate for eight months in January as the third national lockdown kicked in. According to the latest IHS Markit/CIPS survey, the services index dropped sharply from 49.4 in December to 39.5, the fastest fall since May 2020, due mainly to the slump among travel, leisure and hospitality businesses. On the other hand the successful UK vaccine rollout gave some hope for a rebound in economic activity, with business optimism improving for the third consecutive month.
Tim Moore, economics director at IHS Markit, said: “Service providers experienced a steep downturn in business activity due to the third national lockdown in January, although the speed of decline remains much slower than last spring. Tight restrictions on travel, leisure and hospitality resulted in severely reduced trading among customer-facing businesses.
“Temporary closures led to shrinking demand for business services and a ripply effect of corporate spending cutbacks. While the UK economy is on course to contract sharply during the first quarter of 2021, businesses remain confident that pent up demand and an easing of pandemic restrictions will provide a springboard to recovery later this year.”
The market appears to have taken the positive side of the survey, with the FTSE 100 recovering from its earlier dip to add 10.56 points to 6527.21.
9.35am: STV sees record streaming performance
The trend for binge-watching TV during the interminable lockdown has helped the streaming service run by STV Group (STV.LON) achieve a record-breaking performance, pushing its shares up 4% to 345p. The platform delivered 12.5 million streams in January, an increase of 115% on the same month last year.
Online viewing was also up 100% year-on-year, with the number of monthly active users on the service grew by 20% in January alone.
STV’s streaming service grew faster than any other broadcaster video on demand platform in 2020 – up 68%. Popular viewing included The Bay, Marcella The Bridge, as well as old favourites such as Taggart, and Rebus.
However, the positive mood for the FTSE 100 index had vanished after an hour and a half of trading, with the UK blue-chip index reversing to shed 2.15 points at 6,514.50.
8.35am: Recovery mode continues
The February bounce-back continued on Wednesday with the Redditers’ revenge on the short-sellers now being seen as a market aberration rather than a significant ongoing threat to stock prices.
The FTSE 100 opened its account firmly in positive territory, taking its cue from Asia’s main markets, which in turn were lifted by the resilient performance of Wall Street after London’s close.
The index of UK blue-chip shares pushed 47 points higher at 6,563.40.
With the excitement of the GameStop ramp now fading, traders have returned to their favourite, twin pre-occupations – coronavirus vaccine roll-out and US stimulus.
Topping the charts in London was Vodafone (LON:VOD) with a 4% gain after re-affirming its earnings targets.
“Any improvements in a company of Vodafone’s size are likely to be incremental, and the latest set of figures build on the progress being made,” said Richard Hunter, head of markets at Interactive Investor.
Proactive news headlines:
Galantas Gold Corporation (LON:GAL) said it has reached a formal agreement with the Police Service of Northern Ireland (PSNI) which can allow blasting to take place at the Omagh gold mine. The company noted that the agreement creates the potential for a materially improved economic arrangement for an expansion of underground blasting, which is necessary if the Omagh mine is to achieve full commercial production. “The agreement is the result of detailed cooperation between Galantas & PSNI and I am pleased that the new arrangements, in which the company has heavily invested, have been formalized in this way,” said Roland Phelps, Galantas chief executive in a statement.
4D pharma PLC (LON:DDDD) has updated investors on activities in the development program for its immune-oncology single strain live biotherapeutic candidate MRx0518. The AIM-listed firm said MRx0518 is in an ongoing Phase I/II clinical trial in combination with immune checkpoint inhibitor (ICI) Keytruda (pembrolizumab), in patients with advanced malignancies who have previously progressed on ICI therapy. The study is comprised of two parts – Part A, an initial safety phase assessing dose-limiting toxicities of the combination which was completed in May last year, and the Part B cohort expansion phase to assess clinical benefit in addition to safety which has begun.
Argo Blockchain PLC (LON:ARB) has updated on its cryptocurrency mining operations for the first month of 2021, highlighting higher revenues and expanded margins over the period. The company reported that its mining revenues for January were £2.48mln. up from £1.63mln in December, while its average monthly mining margin rose to 71% from 60% a month ago.
Directa Plus PLC (LON:DCTA) said it has received a grant for its face masks as part of the European Union’s Horizon 2020 research and innovation programme. The producer and supplier of graphene nanoplatelets based products for use in consumer and industrial markets said the grant has a total value of €100,000, on a non-refundable basis, and covers a project which is expected to be concluded within the next 8 months. As part of the Inno4Cov-19 Project, the grant will be used to assist Directa’s research into using graphene technology to help prevent the spread of coronavirus (COVID-19).
Guild Esports PLC (LON:GILD) said it has signed Tai Starčič, also known as TaySon, Europe’s top-ranked professional Fortnite player, as the fourth member of its esports team for the game. The company said TaySon’s signing elevates its team to the top spot in the region from second place, adding that TaySon has “immense popularity at a grassroots level” having recently been named ‘Player of the Year’ in the 2020 Competitive Awards for Fortnite as voted for by fans. TaySon has signed a one-year contract with Guild with an option to renew for another year. He will compete under the Guild banner in all upcoming European and international Fortnite tournaments, starting with the new FNCS EU season on February 5.
Open Orphan PLC (LON:ORPH) said its hVIVO division has opened a new quarantine clinic in East London. The new 19-bedroom Whitechapel Clinic is directly opposite the Queen Mary BioEnterprise Innovation Centre (QMB), which houses hVIVO’s state-of-the-art FluCamp. The converted former boutique hotel will be used as an additional unit for human challenge trials and volunteer recruitment screening. There are quarantine rooms across three floors, with each level fully converted to include a nurses’ station. In a separate statement, Open Orphan PLC said it had received notice of exercise of warrants by investors who participated in the Venn loan note financing in December 2018 over 1,349,349 ordinary shares of 0.1p each in the capital of the company at a price of 0.1p per share for 477,703 ordinary shares and at a price of 2.2 p per share for 871,646 ordinary shares. The gross proceeds of this exercise received by the company amounts to £19,653.91.
World High Life PLC (LON:LIFE) said it has appointed Tony Calamita, one of the founders of its subsidiary Love Hemp Limited, as its chief executive and as a director with immediate effect. The cannabidiol (CBD) specialist said Calamita has “played a crucial role in the rapid development of Love Hemp’s business”, creating what it said is “one of the UK’s leading CBD and health and wellness suppliers”.
Destiny Pharma PLC (LON:DEST) said Brazil’s Industrial Property Office has granted it an additional patent over XF-73, a nasal gel being developed to prevent post-surgical infections such as MRSA. The Brazilian authorities have issued what is known as a notice of allowance pending full approval next month. It will be the 84th patent from three patent families covering the XF platform. In the same announcement, Destiny said it expects to share the results of its ongoing phase IIb trial towards the end of March, after which it will concentrate its efforts on a phase III programme.
Scancell Holdings PLC (LON:SCLP) has said it would either develop its cancer immunotherapy in-house or with a new partner after ending a clinical development tie-up with Cancer Research UK (CRUK). The decision to curtail clinical development work on Scancell target SCIB2 followed a re-assessment of the charity’s collaboration model in the wake of the coronavirus pandemic, the company said. CRUK was due to fund and sponsor a phase I/II trial of SCIB2 in combination with a checkpoint inhibitor drug in patients with solid tumours.
Curzon Energy PLC (LON:CZN) has reset its reboot, and is now set to be the vehicle for a British plastic recycling business. The company told investors it has terminated its letter of intent with Sun Seven Stars Investment Group (SSSIG), a move that closes the door on the previously proposed and protracted deal for the London Critical Metals Market (LCMM). Curzon has, at the same time, announced the signing of a separate letter of intent with Poseidon Enhanced Technologies Limited. The Poseidon deal envisages a reverse takeover which would see the AIM-quoted entity become a producer of low-cost recycled plastics for the food and beverage industry.
Sensyne Health PLC (LON:SENS) has launched the first operational AI algorithm for coronavirus (COVID-19) patients built on its SENSE engine. SYNE-OPS-1 was co-developed with the Chelsea & Westminster Hospital NHS Foundation Trust, which has now integrated the system and is using it to manage COVID-19 patients in its intensive care unit.
Zaim Credit Systems PLC (LON:ZAIM), the Russia-focused microloans group, said it increased lending by 65% in the fourth quarter of 2020 as it switched its business online. Loans issued over the three month period were £3.8mln compared to £2.3mln in the previous quarter, with a 250% jump in online borrowing to £2.9mln. Online now comprise 76% of the loan book, Zaim said, which added that the group continued to trade profitably in the fourth quarter.
Digitalbox PLC (LON:DBOX), the mobile-first digital media business has appointed Marcus Rich as its new chairman. Rich, who joins on February 17, 2021, was most recently chief executive of TI Media and led the sale of NME.com to Bandlab Technologies, and oversaw the overall sale of the business to Future PLC. He replaces Robin Miller, who made the decision to step down in October last year.
Bacanora Lithium PLC (LON:BCN) said it has successfully raised USS$65mln via an equity funding comprising a share placing and a retail offer. Some 106.9mln new shares are being issued at a price of 45p each, a 19.6% discount to Tuesday’s mid-market closing price. Chief executive Peter Secker, in a statement, noted that the funding was the final piece in the company’s financing commitment to bring Stage 1 of Sonora into production. “This successful fundraising will allow the company to achieve its ambition of becoming an international lithium production company,” Secker said.
Minds + Machines Group Limited (LON:MMX), one of the world’s leading owners and operators of Internet Top-Level Domains (TLDs) said, further to the announcement of January 25, 2021, it has confirmed the appointment of Tony Farrow as its CEO to the company’s board. It noted that Farrow holds 750,000 ordinary shares of no par value in the company and 750,000 restricted stock units over ordinary shares.
Power Metal Resources PLC (LON:POW) the AIM-listed metals exploration and development company said it has received notices to exercise warrants over 13,295,000 new ordinary shares of 0.1 pence each in the company, with 10,795,000 warrants exercised at a price of 1.0p per ordinary share and 2,500,000 warrants exercised at a price of 0.7p each. Subscription monies of £125,450 have been received by Power Metal in respect of these exercises.
AdEPT Technology PLC (LON:ADT) has said it is presenting at the MelloMonday event on February 8, 2021, via Zoom Webinar. It noted that Phil Race, CEO and John Swaite, CFO will be presenting to participants and taking questions during the event.
Tiziana Life Sciences PLC (NASDAQ:TLSA) (LON:TILS), a biotechnology company focused on innovative therapeutics for oncology, inflammation, and infectious diseases, said an interview with Dr Kunwar Shailubhai, its CEO and CSO, is now available online via the following link: https://www.youtube.com/watch?v=UocEGvQ10OE. In the interview, D. Shailubhai discusses the positive effect of nasally administered Foralumab in coronavirus (COVID-19) mediated pulmonary and systemic inflammation and its potential related to newly identified COVID-19 variants in UK, South Africa, and Brazil. He also comments on the nearly 2x improvement shown in CT scans of the lungs of patients treated with Foralumab as compared to those in the control group.
6.50am: Early gains forecast
The FTSE 100 is expected to start higher on Wednesday as optimism began to return to global markets following last week’s volatility.
Spread-betters IG are expecting the blue-chip index to open up 29 points after ending Tuesday’s session 50 points higher at 6,516.
Expectations for a positive start followed an upward trend on Wall Street overnight, with the Dow Jones Industrial Average closing up 1.57% at 30,687 while the S&P 500 climbed 1.39% to 3,826 and the Nasdaq Composite rose 1.56% to 13,612.
Traders in New York appeared to have been given a boost on the back of encouraging news on the pace of vaccinations in the US as well as the prospect of new stimulus measures and a decline of volatility caused by last week’s retail trading frenzy.
After-hours also saw big news from tech giants Amazon Inc (NASDAQ:AMZN) and Google parent Alphabet Inc (NASDAQ:GOOGL), with both firms reporting better than expected sales in quarterly earnings while Amazon also unveiled that its founder and chief executive Jeff Bezos will step down from his role in the third quarter of this year.
The picture was more mixed in Asia this morning despite the rally on Wall Street, with Japan’s Nikkei 225 up 1% while Hong Kong’s Hang Seng was down 0.04%.
On currency markets, the pound was down 0.09% at US$1.365 against the dollar, although services PMI data from both the UK and the US later today could provide some catalysts for movement.
Around the markets:
- Sterling: US$1.365, down 0.09%
- Brent crude: US$57.63 a barrel, up 0.3%
- Gold: US$1,838 an ounce, up 0.01%
- Bitcoin: US$36,716, up 7.7%
6.45am: Early Markets – Asia / Australia
Stocks in the Asia-Pacific region were trading mixed on Wednesday as a private survey showed China’s services sector activity growth slowing sharply in January.
Chinese stocks had edged lower by the afternoon, with the Shanghai Composite down 0.2% while South Korea’s Kospi gained 1.1%.
The Nikkei 225 in Japan rose 1% but Hong Kong’s Hang Seng index fell 0.11%
Proactive Australia news:
Ansila Energy NL’s (ASX:ANA) (OTCMKTS:PGNYF) has completed the transaction with the vendors of Hartshead Resources Limited to acquire the remaining 78.4% interest in Hartshead that it did not already own.
White Rock Minerals Ltd (ASX:WRM) is set to become a high-grade Victorian gold explorer and production folling entering into a binding merger implementation deed (MID) with AuStar Gold Ltd (ASX:AUL), enabling WRM to acquire 100% of the issued capital of AUL through a scheme of arrangement between the two companies and their shareholders.
Technology Metals Australia Ltd’s (ASX:TMT) (FRA:TN6) magnetic concentrate test work based on staged grinding of two large sample masses of fresh massive magnetite composites from the Yarrabubba Iron-Vanadium Project has produced high-grade magnetic concentrate.
Alice Queen Ltd (ASX:AQX) has started drilling at its Mendooran Project (EL8469), in the Lachlan Fold Belt of NSW, to test the northern extension of the highly prospective Molong Volcanic Belt for undercover large copper-gold bearing porphyry systems.
Havilah Resources Ltd (ASX:HAV) (FRA:FWL) has entered into a binding memorandum of understanding (MOU) for the exploration and potential development of its uranium interests in South Australia, with Aroha Resources Pty Ltd – conditional upon Aroha listing on the ASX.
Comet Resources Ltd (ASX:CRL) has identified numerous mineralised structures at surface in a recent detailed geological mapping campaign of historic drill collars, shafts, and artisanal workings at the Santa Teresa Gold Project in Baja California, Mexico.
Creso Pharma Ltd’s (ASX:CPH) (FRA:1X8) wholly-owned Canadian subsidiary, Mernova Medicinal Inc. has secured four new purchase orders with a total value of C$242,842 (A$248,6821 ) for its high-quality, indoor-grown, hand-trimmed, hang-dried, cured, artisanal, craft cannabis, in dried flower form, sold under the Ritual Green brand.
Paradigm Biopharmaceuticals Ltd’s (ASX:PAR) additional data on patients who received Zilosul® under the Therapeutic Goods Administration (TGA) Special Access Scheme (SAS), brings the cumulative average WOMAC reduction in pain from baseline for the 89-patient cohort to 49.6%.
Lithium Australia NL (ASX:LIT) (FRA:3MW) (OTCMKTS:LMMFF) has been granted the US patent for its SiLeach extraction technology, which can produce a range of lithium chemicals, including lithium hydroxide, lithium carbonate and lithium phosphate.