FTSE 100 closes at three month high as shock US jobs report boosts global markets

  • FTSE 100 closes up 2.25%
  • US jobs market appears to have bottomed out in April
  • US benchmarks surge

5.10pm: FTSE 100 closes significantly higher

FTSE 100 index closed at a three-month high as it joined global equity markets to head higher on Friday.

The index of the UK's leading shares closed up nearly 143 points, or 2.25%, at 6,484. Over the week as a whole, the index gained 6.7%.

FTSE 250, the more UK company focused benchmark, gained over 403 points to close at 18,229.

Markets were boosted by a US monthly jobs report, which showed a gain in the job creation number rather than the fall that economists had expected.

The USA regained 2.5 million jobs in May, while the jobless rate fell to 13.3%.

"Last month 2.5 million jobs were added in the US, which was in stark contrast to the 8 million job losses that economists were expecting. The April reading of -20.5 million was revised to -20.68 million, so at least in May some of the previous job losses were recouped," said David Madden, market analyst at CMC Markets.

"The upward move in stocks is fuelled by hopes that economic activity will rise as lockdown restrictions continue to be loosened," he added.

On Wall Street, the Dow Jones zoomed up almost 956 points, or 3.6% to 27,227. The S&P 500 surged nearly 89 at 3,201.

3.10pm: Stocks storm higher after US jobs stunner

US indices raced higher at the open after the pleasant surprise of the much better than expected US jobless figures.

The Dow Jones index was up 734 points (2.8%) at 27,016 and the S&P 500 was 70 points (2.2%) higher at 3,182.

The FTSE 100 was already enjoying a good day before the US jobs news and kicked on in the afternoon session to 6,472, up 130 points (2.1%).

It took a while for commentary on the US jobs numbers to hit the wires – the pundits were either in shock or waiting for an official correction.

James Knightley, the chief international economist at ING, said the numbers were “simply astonishing”.

“Apologies – this has taken a little longer to write having just fallen off my chair and broken it,” he quipped, after wondering whether the numbers “beat” was the biggest data surprise in history.

“US non-farm payrolls have risen 2.509mn in May versus a consensus estimate of a 7.5 million fall. This was so far away from what anyone was expecting. It is simply astonishing given the slow pace of reopening and the fact that more than 12 million people filed a new unemployment claim during the survey period. The ADP payrolls survey had come in stronger than expected, but even that still had a payrolls decline of 2.76mn so this is one of the biggest economic data shocks in history, if not the biggest,” Knightley said.

2.05pm: US index futures kick on after US economy springs a jobs surprise

Futures markets had US indices kicking on ahead of the official start of trading after the US jobs report for May provided a pleasant surprised.

Non-farm payrolls in May rose by 2.5mln in jobs, wrong-footing economists – who admittedly had a tough job on their hands predicting such a volatile job market – who had expected around 7.25mln jobs to be lost.

The economy had shed 20.7mln jobs in April (revised from the initial estimate of 20.5mln).

The Dow Jones index, which had been expected to open at around 26,600, is now expected to open its account a shade above 26,700, up more than 400 points.

The S&P had been pegged to jump 27 points to 3,139 but is now expected to open at around 3,175, up 63 points.

In London, the FTSE 100 was lifted by the US jobs news, rising to 6,449, up 108 points (1.7%).

1.35pm:US jobs market recovers in May

US non-farm payrolls for May provided a major surprise, increasing by 2.51mln, rather than falling by 7.5mln, as the market had been expecting.

The unemployment rate fell to 13.3% from 14.7% in April; the consensus forecast had been for a rate of 19.5%.

US Change In Nonfarm Payrolls May: +2509K (est -7500K; prevR -20687K; prev -20537K)$ES_F $USDJPY #NFP

— LiveSquawk (@LiveSquawk) June 5, 2020

1.10pm: FTSE 250 outperforms the FTSE 100

Risers are outnumbering fallers by around four-to-one on the FTSE 100 list.

The index was up 75 points (1.2%) at 6,416 and has largely traded between 6,400 and 6,420 for the last five hours.

Pennon PLC (LON:PNN), down 2.9% at 1,101p and the Footsies worst performer, was one of those failing to get with the programme as traders pick over the bones of the water companys full-year results, announced yesterday.

The FTSE 250, up 273 points (1.5%) at 18,099 was outperforming the FTSE 100, largely because its constituents care less about sterlings performance against the US dollar than do the constituents of the FTSE 100.

The dollar is going through a rough time on foreign exchange markets at the moment; sterling has put on more than three-quarters of a cent to trade at around US$1.2672.

Even the mid-cap FTSE 250 was not without its weak spots. Kaz Minerals PLC (LON:KAZ) and Biffa PLC (LON:BIFF) both hit the skids after updating the market.

Kaz fell 8.5% to 455p after it reported that work at the Baimskaya site in the second quarter has been limited due to measures taken to control the spread of the coronavirus in the region.

Biffa, the waste management company, saw its shares tumble 7.8% to 242p after it revealed that its Industrial & Commercial and landfill businesses had seen a 50% fall in revenues when the pandemic first hit hard but the fall-off has eased to 40%.

12.20pm: US indices tipped to open higher – depending on non-farm payrolls

US indices are expected to open significantly higher although much depends on how good or bad the US jobs report for May is.

Spread betting quotes indicate the Dow Jones industrial average will open 266 points higher at 26,607 while the S&P 500 is pegged to jump 27 points to 3,139.

“Standing in the Dows way is a nonfarm jobs report potentially set to reveal that another 7.75 million jobs were lost last month. This as the unemployment rate shoots up to a staggering 19.4%. Wage growth, meanwhile is expected to pull back from 4.7% to 1% month-on-month, suggesting that more high-wage jobs vanished in May than in the low-wage wipe-out that hit in April,” reported Connor Campbell at Spreadex.

In the UK, it is all kicking off in the airline industry with Ryanair PLC (LON:RYA) and British Airways owner International Consolidated Airlines (LON:IAG) said to be consdiering taking legal action against the UKs quanrantining laws.

IAGs head honcho, Willie Walsh, confirmed to Sky News that he was talking to his legal advisors. Ryanairs chief executive officer, Michael OLeary, is not often on the same page as Willie Walsh but according to Sky the Irish airline has said it would join IAGs legal battle.

Shares in IAG were up 9.4% at 315.3p but Ryanair wass off 0.5% at €12.69.

Willy Walsh doesn't like that there was 'No prior consultation with the quarantine regulation prior to introducing it'… well, he has done the same with giving us our redundancy notices, without any prior consultations. Unbelievable#BAbetrayal #backinthehold

— Owen Gregory (OG) (@owen_gregory) June 5, 2020

The FTSE 100 was up 69 points (1.1%) at 6,410.

11.00am: Carnival tops the leader-board

A mixture of housebuilders and travel stocks continue to light up the Footsie on Friday morning.

The index of leading shares was up 74 points at 6,416.

Carnival PLC (LON:CCL), up 11% at 1,327.5p, was the top-performing blue-chip despite its AIDA business suspending cruises in USA and Canada for 2020.

Housebuilders, already buoyed by an upbeat trading statement from Taylor Wimpey PLC (LON:TW.), took heart from the Halifax House Price Index for May, which could have been worse.

Prices dropped for the third month in a row in May, declining by 0.2% month-on-month. House prices were up 2.6% year-on-year, down from 2.7% in April and a far cry from the 4.1% annual increase seen in January of this year.

“The Halifaxs annual growth rate is inconsistent with a market completely bowled over by panic and fear and we expect this picture to continue,” opined Lucy Pendleton at the estate agent James Pendleton.

“What is transpiring is a slight softening in prices as the market finds its feet again. As long as the UKs transition out of furlough is managed correctly, then the balance of supply and demand will remain in vendors favour,” she suggested.

#UK Economic Data: Halifax #House Price Index, May: #HPI ????-0.2% m/m, ▲+2.6% y/y. Average #Price £237.8K ↓-£0.5K m/m, ▲+£6K y/y

— Zoom Stocks (@ZoomStocks) June 5, 2020

9.35am: Housebuilders buoyed by Taylor Wimpey update

The Footsie has established a base camp at around the 6,420 level and looks set to hunker down until this afternoons US jobs release.

Londons blue-chip was up 82 points (1.3%) at 6,423.

Taylor Wimpey PLCs (LON:TW.) business update gave the housebuilders shares a boost.

The stock advanced 5.6% to 167.6p after it reported a high level of requests to view its houses in recent weeks.

“The fact the company is rapidly returning to normal in terms of its operations is good news, and perhaps sooner than many expected,” said Ian Forrest, an investment research analyst at The Share Centre.

“More significantly, the news of demand from potential house buyers returning at a good level is very welcome, although that could change if unemployment increases later in the year and the economy turns down. The fact that there was no mention of when dividends might restart today is not surprising given that it is still early days in the recovery process, but investors will be keeping a keen eye on the interim results, due on 29 July.”

$TW. Taylor Wimpey sees resurgence of bookings as sales centres reopen https://t.co/0ft1Otzw4h via @proactive_UK #TW.

— Proactive (@proactive_UK) June 5, 2020

Shares in sector peers rose in sympathy; Barratt Developments PLC (LON:BDEV) was up 4.4% at 552.6p; Berkeley Group Holdings PLC (LON:BKG) was 1.6% better at 4,431p; and Persimmon PLC (LON:PSN) was 2.9% firmer at 2,528p.

8.30am: Travel stocks lead the rally

Airline and cruise stocks led the FTSE 100 index higher at the outset on Friday as investors took heart once again from the gradual loosening of coronavirus lockdown restrictions.

Londons index of leading shares was up 46 points, or 0.7% at 6,387, recovering from a blip on Thursday to resume the week's good gains.

Low-cost airline easyJet PLC (LON:EZJ) was the Footsies top performer, up 9.2% at 910p, followed by British Airways owner International Consolidated Airlines (LON:IAG), up 4.9% at 302.2p.

Plane part manufacturers were also wanted; Melrose Industries PLC (LON:MRO), which owns aerospace and automotive engineer GKN), was up 3,8% at 134.3p while Meggitt PLC (LON:MGGT) was up 3.0% at 349.9p.

There was even some love for cruises operator Carnival PLC (LON:CCL), which floated 4.7% higher to 1,250p.

Investors shrugged off another gloomy economic indicator, namely UK consumer confidence as measured by market research group, GfK.

“According to GfK, contrary to expectations, UK consumer confidence deteriorated further last month, with the relevant survey headline indicator down 2pts to -36, just a couple of pts above the trough during the global financial crisis. The detail of the survey reported a deterioration in assessments of the outlook for the economy and personal financial situation, even if there was a slight improvement in perceptions of the climate for making major purchases,” reported Daiwa Capital Markets.

UK GfK Consumer Confidence May F: -36 (exp -34; prev -34)

— LiveSquawk (@LiveSquawk) June 4, 2020

The GfK index hit its lowest level in a decade.

Proactive news headlines:

Applied Graphene Materials (LON:AGM) has signed an exclusive distribution agreement with Dichem Polymers that will give it access to the polymers and coatings markets in Greece. Dichem has a long track record of supplying high-performance chemicals to markets such as cosmetics, pharmaceuticals, the food industry, polymers and coatings, said AGM. The two companies will collaborate on the introduction of AGM's proprietary Genable graphene dispersions technology into Greece. In a statement, Adrian Potts, AGMs chief executive said he was delighted with the addition of Dichem to its commercial team.

Braveheart Investment Group PLC (LON:BRH), has said that that, further to its announcement on May 21, 2020, the consent of certain PhaseFocus Holdings Limited shareholders has been obtained and, therefore, completion of the acquisition of a further 22,145 ordinary shares in PhaseFocus will occur on completion of the admission to trading of a total of 700,000 new ordinary shares of 2p each in Braveheart at a price of 29p per ordinary share as non-cash consideration. Upon completion of the transaction, Braveheart will own 42.67% of the issued share capital of PhaseFocus.

C4X Discovery Holdings PLC (LON:C4XD) has revealed that its chief executive, Clive Dix has been appointed as a member and deputy chair of the steering board of the UK Vaccine Taskforce. The taskforce has been set up by the UK governments chief scientific adviser, deputy chief medical officer, business secretary and health secretary to lead UK efforts to find and manufacture a coronavirus (COVID-19) vaccine. The drug discovery firm said Dixs appointment will not impact his day-to-day role as CEO.

Tissue Regenix Group PLC (LON:TRX) has reported higher revenues for 2019 as the firm saw sales rise across all of its main business divisions. For the year ended December 31, 2019, the regenerative medicine specialist posted a 12% rise in revenues to £13.03mln and narrowed its operating loss to £7.2mln from £8.69mln in the prior year. The revenue rise was boosted by a 25% increase in sales of the companys dCELL products in BioSurgery as well as a 5% increase in sales of its BioRinse products for orthopaedics and dentistry. The groups joint venture, GBM-v, also saw its sales expand by 13% in the year to £2.08mln. Post-period, Tissue Regenix said revenues in the first quarter of its current year had risen 18%, despite a cyberattack on its facility in San Antonio, Texas.

Block Energy PLC (LON:BLOE), the exploration and production company focused on Georgia, has said its current Technical Director, Roger McMechan has stepped back from his executive position to pursue his other interests with effect from June 3, 2020. However, it added, McMechan will continue on the board as a non-executive director, enabling the company to utilise his petroleum engineering expertise and detailed knowledge of its assets as Block Energy prepares to restart oil production and initiate gas production at its West Rustavi field. The company said that, in his place, it has appointed Ritchie Wayland, a former Group Exploration Manager of JKX Oil & Gas PLC (LON:JKX), as its new Technical Manager.

Xpediator PLC (LON:XPD) said its chief executive Stephen Blyth will step down from the position with effect from Friday, June 4, although he will continue as a director in the position of founder and non-executive deputy chairman. The freight management group said given the prevailing circumstances, Blyth had agreed to stay on as CEO despite announcing his intention to step away from the role last summer, however, given health concerns he had decided now was the right time to spend more time with his family. Xpediator said a formal process to appoint a new CEO has commenced, while in the interim two members of its senior management team, chief financial officer Robert Ross and chief operating officer of its Logistics Romanian business Danor Ionesc, will jointly cover the responsibilities of the position.

Thor Mining PLC (LON:THR) (ASX:THR) said it has started field activities associated with the due diligence assessment for the proposed acquisition of American Vanadium. Thor announced at the beginning of the month an option agreement to acquire American Vanadium, which holds interests in uranium and vanadium-focused projects in Colorado and Utah. So far, Thor revealed, it has not uncovered any regulatory or environmental issues that would impact the proposed acquisition.

Stobart Group Limited (LON:STOB), the aviation and energy group, intends to raise between £80mln and £100mln by issuing shares as it pivots to focus on aviation. Around four-fifths of the money will be raised through a firm placing of shares at between 35p and 40p each but shareholders will also get to participate in the equity issue via an open offer. Directors of the company will take up shares to the tune of around £356,000 in aggregate. The group, which owns Southend Airport, said it requires additional liquidity to fund its short-term cash obligations and to enable it to build a strong foundation from which it can return its Aviation business to growth. As well as announcing a share issue, the group released its results for the 12 months to the end of February that showed a 15.9% increase in revenue to £170.2mln from £146.9mln the year before.

Bidstack Group PLC (LON:BIDS) has raised £5.7mln to boost its working capital as part of its efforts to expand its international presence and exploit “increased demand side interest” from advertising groups. The AIM-listed firm, which provides in-game advertising technology, said it had raised £5.5mln through a "significantly oversubscribed" placing of 137.5mln new shares at a price of 4p each, a 29% discount to its Thursday closing price. Bidstack has also raised an additional £200,000 through the subscription of 5mln new shares at the placing price by certain directors of the company and others. Bidstack also said it continued to expect revenues for 2020 to be “very significantly second-half weighted” and in line with expectations for the year.

Metal Tiger PLC (LON:MTR), the AIM-listed investor in natural resource opportunities, announced that it has executed an International Swaps and Derivatives Association (ISDA) agreement and Credit Support Annex (CSA) with the same global investment bank with which it has the equity derivative financing arrangements subject to the Umbrella Agreement, as announced on 17 December 2019. The execution of the ISDA agreement will allow Metal Tiger to obtain access to over-the-counter (OTC) derivatives including but not limited to equities, commodities and FX contracts. The CSA essentially helps to stipulate the terms and conditions under which each party is required to post collateral to each other. In a statement, Michael McNeilly, the chief executive officer of Metal Tiger commented: “The execution of these agreements expands the scope of the natural resources investment opportunities available to Metal Tiger and could also be applied to help Metal Tiger hedge currency risk. It has been put in place to allow the possibility of a more sophisticated investment approach going forward depending, as always, on the balance of the portfolio and the resources available to Metal Tiger at the time. Metal Tiger will update appropriate internal strategy and policy documents to help govern any OTC contracts entered into using this agreement to ensure appropriate risk management.”

Caledonia Mining Corporation PLC (LON:CAL) said it has applied for a voluntary delisting from the Toronto Stock Exchange (TSX) effective as of the closing of trading on June 19, 2020. Following delisting, the company's shares will continue to be listed and trade on NYSE American LLC under the symbol CMCL and depositary interests representing shares will also continue to trade on AIM of the London Stock Exchange under the same symbol CMCL. Since the Company's shares were listed on the NYSE American in 2017, trading on that market has become increasingly dominant, and it now provides the most liquid market for Caledonia's shares. Accordingly, the company believes that the financial and administrative costs associated with maintaining its listing on the TSX are no longer justified. Shareholders holding shares in Canadian brokerage accounts should contact their brokers to confirm how to trade in Caledonia's shares in the future on NYSE AmericanRead More – Source