Wall Street rises and FTSE flat after stronger-than-expected US jobs recovery

Well that’s all we have time for today, thanks for following along.

Be sure to join us again on Monday when we’ll be back for more of the latest markets news, and all that’s happening across the global economy.

Here’s a sneak peak at what’s on the horizon next week. as we draw closer to Christmas…

The calendar of earnings releases is looking lighter for the week ahead but there is still a broad range of companies set to report.

Kicking the week’s earnings off is Oracle, with investors hoping to see a boost from the company’s partnerships with other tech giants.

Chipmaker Broadcom’s report will be closely monitored by markets, as escalating trade tensions between the US and China present headwinds for the sector.

Markets will want to see if Spanish retail company Inditex, whose brands include high-street favourites Zara and Bershka, can continue its run of strong growth.

Investors will be looking to British American Tobacco’s trading update to see how the business is performing as the sector faces increasing regulatory pressures.

In the travel sector, markets will be waiting to see if TUI can match, or even beat, its earnings guidance for the year.

…Until then, have a good weekend!

US consumer sentiment has risen for a fifth month after the election victory of Donald Trump.

According to figures compiled by the University of Michigan, sentiment climbed 3.1% to its highest level in seven months.

Meanwhile, year-ahead inflation expectations rose from 2.6% last month to 2.9% this month, the highest level in six months.

Joanne Hsu, director of the survey, said:

Oil prices dipped on Friday, with market focus shifting to weak demand after OPEC+ extended its deep output cuts and postponed planned supply increases until the end of 2026.

Brent crude futures slipped 0.4%, trading at $71.84 per barrel, while US West Texas Intermediate (WTI) lost 0.3% to $68.09 per barrel at the time of writing.

On Thursday, OPEC+ – which controls about half of the world’s oil output – delayed its planned oil output increases by three months, pushing the start date to April 2024, and extended its full unwinding of cuts by a year, now set for the end of 2026.

The group had originally planned to begin unwinding cuts in October 2024, but a slowdown in global demand, particularly from China, combined with rising output from other producers, has forced multiple postponements.

“The WTI crude oil rally in the first half of the week fizzled out, and the price finds itself back at $68,” Chris Beauchamp, chief market analyst at IG, said.

“Gains stalled at $70, as OPEC+ reported it would push its expected output hike further back, but this was not enough to support a continued move higher,” he added.

Concerns over supply outpacing demand heading into 2024 further weighed on prices, as traders remain cautious about the potential for oversupply in the coming months.

After today’s jobs data, investors have increased their bets on the US Federal Reserve cutting interest rates this month after jobs data came in roughly in line with expectations.

Futures markets put an 89% chance on the Fed cutting rates by 25 basis points at its next meeting on 18 December after the payrolls data, compared to a 68% chance earlier in the session.

Samuel Tombs, chief US economist at Pantheon Macroeconomics, said:

The US economy added 227,000 private-sector jobs in November, above the 200,000 forecast by economists.

It was a stronger-than-expected recovery, from the 36,000 jobs added in October, according to the US Bureau of Labour Statistics.

October’s reading was also revised up from its 12,000 initial reading.

Meanwhile, the American unemployment rate rose from 4.1% to 4.2%, an increase in line with expectations.

Scott Gardner, investment strategist at JP Morgan owned digital wealth manager, Nutmeg, said:

Quiz has said it could run out of cash early next year after a decline in online and in store sales in October and November.

The company’s share price has fallen by 44% to 2.35p in London on the back of the news.

The business, which has more than 70 stores in the UK and Ireland as well as concessions in New Look and outlets in the Middle East, said it had appointed advisers to “consider appropriate options” from both a financing and strategic point of view.

It said:

Quiz said it was managing its working capital carefully but currently had just £1.2m of headroom within its £4m borrowing facilities.

Dan Coatsworth, investment analyst at AJ Bell, said:

Monetary policy committee (MPC) member Swati Dhingra has said that the Bank of England should be cutting interest rates faster.

She said high rates had hurt consumption and business investment in the UK, and damaged the supply capacity of Britain’s economy.

“That’s why I think we should be easing policy more,” Dhingra told Bloomberg Television in an interview.

Dhingra said that the UK has limited direct exposure to US tariffs, but added that the indirect exposure may be greater. Tariffs could lead to a return of supply chain disruption that we’ve seen in recent years, she said.

She estimated that the neutral rate – the rate at which monetary policy is neither restrictive nor expansionary, was between 2.5% and 3.5%.

Technology has made our working lives easier in many ways. With the rise of communication platforms, channels and task management systems, we can now chat to remote-working colleagues, share documents instantly, and easily update others on our progress.

But there’s a downside to the widespread adoption of these apps. The constant stream of notifications has led to a form of mental exhaustion dubbed “ping fatigue”. What began as a way to simplify workflow has turned into a source of stress and distraction — making it difficult to focus, and easy to become overwhelmed.

More than three quarters (77%) of employees find notifications from workplace digital tools a distraction, Unily’s Digital Noise Impact Report has revealed. According to the survey of 500 employees, a third are distracted every 15 minutes by a digital notification, leading to around 160 distractions a week.

“It’s easy to become overwhelmed even just by emails piling, let alone tasks via multiple other platforms,” says Ali Ross, psychotherapist and spokesperson for the UK Council for Psychotherapy (UKCP). “Having a constant stream of things to do interrupts our ability to relax, take a break or sometimes even to concentrate on the task at hand.”

Read the full article here

As we press into the afternoon, let’s sum up what’s been happening in equity markets in London so far today…

• Direct Line surged as it accepted a takeover offer from rival Aviva after the latter increased its bid to 275 a share.

• The company reiterated that it was confident of its prospects as a standalone operation, but after considering the new offer with advisers and consulting with shareholders it decided the latest bid was at a value that it could recommend acceptance.

• Aviva has until 1700 GMT on Christmas Day to make a firm offer under UK takeover rules.

• Berkeley Group was in the red as the housebuilder said pre-tax profit in the six months to the end of October fell 7.7% to £275.1m.

• In broker note action, AO World was boosted by an initiation at ‘buy’ by Deutsche Bank.

• However, Spirax was hit by a downgrade to ‘neutral’ at JPMorgan, while AJ Bell was knocked lower by a downgrade to ‘hold’ at Deutsche Bank.

Bitcoin (BTC-USD) dropped almost 7% for a short while a day after an historic surge past $100,000 led some traders to hedge for a retreat.

The digital asset fell as low as $92,144 on Friday before later steadying. Volatility hit the wider crypto market too amid a hiatus in a rally fuelled by president-elect Donald Trump’s embrace of the sector.

Demand has ticked up for bearish wagers such as put options, which provide the right to sell at a predetermined price in a set period. Some of the most notable activity was for puts with strike prices of $95,000 and $100,000, according to Amberdata. Demand for puts in the $75,000 and $70,000 range also increased.

The eurozone’s economy expanded 0.4% in the third quarter of the year, official figures showed on Friday.

The rate came in faster than the 0.2% rise recorded for the three months to June, according to Eurostat.

However, despite the acceleration, the eurozone economy only grew by 0.9% compared with the same quarter of the previous year.

Growth was held back by Germany, Europe’s largest economy, which lagged at 0.1% in the quarter.

• Ireland (+3.5%) recorded the highest increase of GDP compared to the previous quarter – although Ireland’s economic figures are heavily caveated because of the influence of tech companies’ offshore holding companies.

• It was followed by Denmark and Lithuania (both +1.2%).

• The highest decreases were observed in Hungary (-0.7%) and Latvia (-0.2%).

Household spending was a big contributor, increasing by 0.7% in the euro area. However, exports decreased by 1.5% in the euro area in the quarter.

Mike Ashley’s Frasers Group (FRAS.L) has launched a takeover bid of Norwegian sporting goods retailer XXL ASA.

It has offered 10 NOK ($0.9044) a share for the equity it does not own in XXL, representing a premium of 25% over its closing price of 8 NOK on Thursday. This values the group at NOK 246.4 million ($22.3 million).

The UK retailer already holds 25.8% of the issued share capital of XXL, which also operates in Sweden, Finland, Denmark and Austria.

The British sportswear and fashion group said it did not agree with the Oslo-listed company’s plan to issue more shares.

It said XXL should not be asking shareholders for further funding when “it has not articulated any clear plan to address and resolve the root causes of its persistent problems.”

It comes as Frasers has been expanding overseas with recent deals in the Netherlands, Australia, New Zealand and in Africa.

The firm cut its profit guidance on Thursday blaming a drop in consumer confidence caused by the UK government’s budget.

Estate agents are bracing for a surge in property owners looking to sell before the stamp duty holiday ends in April.

The thresholds at which buyers will pay the tax will fall from £250,000 to £125,000 from April 1, and from £425,000 to £300,000 for first-time buyers.

Jonathan Hopper, chief executive of Garrington Property Finders, said: “

Nathan Emerson, chief executive of estate agent group Propertymark, said:

The CBI has said that the UK economy will grow 0.9% this year and 1.6% in 2025, down from earlier June predictions of 1% and 1.9% respectively. Growth in Britain is expected to then slow further in 2026 to 1.5%.

Louise Hellem, CBI chief economist, said:

The CBI expects inflation to rise again next year to average 2.6% for 2025 and 2.5% for 2026, with budget pressures expected to particularly contribute to higher retail and hospitality pricing.

It has also forecast that interest rates are set to be higher for longer than previously predicted.

FTSE 100 insurer Aviva (AV.L) has agreed to buy rival Direct Line in a £3.6bn cash and shares deal after a sweetened offer.

The companies said they have reached an initial agreement over a deal valuing Direct Line at 275p per share, up from Aviva’s first bid of £2.50 per share that valued its FTSE 250 rival at £3.3bn.

The latest offer is a 73% premium to the closing price before the first bid was announced, the companies said in a joint stock market statement on Friday morning.

In a statement to shareholders, Direct Line said:

Aviva has until 5pm on Christmas day to make a firm offer or walk away.

German industrial production in slumped 1% in October, when compared to the previous month, putting Europe’s largest economy at risk of a winter recession.

This comes after fall of 2.5% in September, with industrial production down nearly 5% so far this year.

Carsten Brzeski, global head of macro at ING, said:

Across the UK’s nations and regions, house price growth remains uneven.

Northern Ireland has again recorded the strongest annual increase, with prices rising by 6.8% year on year. The average house price in the region now stands at £203,131, outpacing all other areas.

Wales also saw strong price growth, with house prices up by 4.1% annually, bringing the average price to £225,084. Similarly, the North West of England saw significant growth, with property prices rising by 5.9% to an average of £237,045.

The West Midlands experienced a 5.5% increase in house prices, with the average property now costing £257,982. In contrast, Scotland recorded a more modest rise of 2.8%, with the typical property now priced at £208,957.

Despite strong price increases in many regions, London retains the highest average property prices in the UK. The capital saw a 3.5% annual increase, with the average house price reaching £545,439.

UK house prices rose for the fifth month in a row in November to hit a new record high of £298,083, according to Halifax.

Property values rose by 1.3% month on month, but on an annual basis house prices increased by 4.8% in November, accelerating from 4% growth in October.

The price surge is being driven by improving mortgage demand, as recent reductions in interest rates bolster buyer confidence. However, affordability remains a challenge for many potential buyers, according to one of the country’s biggest mortgage lenders.

Amanda Bryden, head of mortgages at Halifax, said:

Looking ahead, Bryden anticipates that positive employment data and further interest rate reductions will continue to support demand in the housing market, although she warned that house price growth may slow, given the elevated borrowing costs compared to historical norms.

Stocks in Asia were mixed overnight amid the fallout from South Korea’s brief declaration of martial law.

The Nikkei (^N225) dipped 0.8% on the day in Japan, while the Hang Seng (^HSI) rose 1.6% in Hong Kong.

The Shanghai Composite (000001.SS) was 1.05% up by the end of the session, to three-week highs, as investors scooped up technology shares ahead of a top-level policy meeting next week that will set the agenda and targets for China’s economy next year.

In South Korea, the parliament is discussing the impeachment of resident Yoon Suk Yeol for trying to impose martial law.

Fears about a second martial law declaration sent the Korean won tumbling as much as 1% and the Kospi (^KS11) down 1.8%, although they narrowed losses after suspected intervention by authorities in the forex market.

Across the pond, Wall Street stocks retreated from records yesterday, taking a breather from a post-election rally ahead of the release of key US jobs data.

Investors are waiting to see if payroll figures will challenge or cement expectations of an interest rate cut this month.

The broad-based S&P 500 (^GSPC) dipped 0.2% to 6,075.11. The Dow Jones (^DJI) fell 0.6% to 44,765.71, while the tech-heavy Nasdaq (^IXIC) slipped 0.2% to 19,800.26.

In the bond market, the yield on benchmark 10-year US Treasury notes fell to 4.175% from 4.196% late on Wednesday.