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FTSE 100 closes marginally ahead on Friday as equities make strong start to 2021

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  • FTSE 100 index closes 16 points up
  • Hargreaves Lansdown wanted after broker upgrade
  • Fresnillo is top Footsie loser

5pm: FTSE 100 closes ahead

FTSE 100 closed marginally ahead on Friday after a muted day, which brought to an end the first trading week of 2021, which showed a strong start for equities

The UK’s top share index finished the day around 16 points higher, or 0.24%, at 6,873. Midcap FTSE 250 was also up, adding over 54 points, or 0.26%,  to close at 21,064.

Over the week as a whole, FTSE 100 added around 6.4%.

In the US, the Dow Jones Industrial Average slipped  around 57 points but the S&P 500 and Nasdaq were higher.

“Today’s non-farm payroll report provided a brief moment of excitement in an otherwise quiet session, as the world’s largest economy lost jobs for the first time since April,” noted Chris Beauchamp, chief market analyst at IG.

“But when revisions to the previous months are taken into account the US is only down 5000 jobs, not even a pinprick for the mighty American economy.

“Those expecting the Fed to shift its views on the recovery based on this report are likely to be disappointed, although the pandemic does continue to have a disproportionate effect on lower-paying jobs, which explains the big rise in average earnings this time around,” he added.

In the commodities markets, gold  was getting a beating and the precious metal lost  almost half the gains it has made since the end of November. In London, mining giant Fresnillo (LON:FRES) was the top laggard, plunging 3.45% to 1,204.5p.

3.35pm: Proactive North America headlines:

Deep-South Resources Inc (CVE:DSM) (OTCMKTS:JAUGF) (FRA:DSD) says it upsized private placement to C$4.5M due to ‘significant demand’

PlantX Life Inc (CSE:VEGA) (FRA:WNT1) (OTCQB:PLTXF) sets in motion plan for bricks and mortar flagship store with British Columbia restaurant acquisition

Champignon Brands Inc (CSE:SHRM) (OTCQB:SHRMF) says review of bipolar disorders confirms early diagnosis and treatment can improve patient quality of life

Westport Fuel systems Inc (TSE:WPRT) (NASDAQ:WPRT) (FRA:WPIA) appoints industry veteran Tony Guglielmin to its board of directors

Loop Insights Inc (CVE:MTRX) (OTCQB:RACMF) to provide its venue management platform to the Big West Conference Basketball Championships in Las Vegas

Real Luck Group Ltd (CVE:LUCK) taps Ran Kaspi as CFO, lands three new directors following esports merger

Aurion Resources  Inc (CVE:AU) (OTCMKTS:AIRRF) (FRA:8RA) chairman David Lotan outlines 2021 exploration plans at Finnish gold projects

3.30pm: Paint continues to dry in London

The FTSE 100 has crawled back into positive territory on a day of mild, rather than wild fluctuations.

London’s index of leading shares was up 14 points (0.2%) at 6,871, with the advance, such as it is, led by Hargreaves Lansdown PLC (LON:HL.), the investment platform operator, which was up 6.2% at 1,668p after Shore Capital upgraded the stock.

Precious metals miner Fresnillo PLC (LON:FRES) was the worst blue-chip performer, sliding 4.5% to 1,191p as the gold price slumped by more than 3%and silver priced dived by more than 5%.

2.50pm: Wall Street trades opens higher

At the opening bell on Friday Wall Street indices were near record highs despite an the unexpected job losses in December.

In the early minutes of trading, the Dow Jones Industrial Average was up 0.27% at 31,124 while the S&P 500 rose 0.47% to 3,821 and the Nasdaq climbed 0.74% to 13,164.

It seems investors are hoping the unexpected loss of 140,000 jobs in the US economy will be righted by fresh economic stimulus from the incoming Biden administration, which is expected to issue US$2,000 cheques to Americans to help juice spending.

There may also be more optimism around vaccines after Modern’s COVID-19 job was approved today by UK regulators.

Back in London, the FTSE 100 had recovered slightly into late afternoon, down 4 points at 6,852 just after 2.45pm.

2.10pm: US payrolls fall for the first time since April

London’s leading shares are a bit lower on balance after US jobs figures were worse than expected.

The FTSE 100 was down 11 points (0.2%) – a seismic movement by today’s standards – at 6,846.

“After several months of encouraging improvement, the closely watched employment data coming out of the US has significantly slumped. The double whammy of Thanksgiving and Christmas celebrations propelled coronavirus cases and consequently, restrictions were re-introduced in many states, hindering many businesses on the road to recovery,” said Robert Alster, the chief investment officer at Close Brothers Asset Management.

“With US cases now exceeding twenty-million and the virus surging globally, Biden is confronted with the challenge of achieving an assertive health policy that doesn’t damage the economy further. To do this whilst supporting a nation reeling from the chaos on Capitol hill will be no mean feat after his inauguration on the 20th,” Alster added.

The US economy, which had been expected to add around 70,000 jobs, actually shed 140,000 in December, in what was the first decline in jobs numbers since April. The November reading was, however, revised to show 336,000 jobs were added, compared to an initial reading of 245,000 additions.

 

Average hourly earnings were up 5.1% year-on-year compared to expectations of a 4.5% increase.

1.35pm: US economy sheds jobs in December

US non-farm payrolls fell by 140,000 in December. The unemployment rate remained unchanged at 6.7%.

Economists had expected the US economy to add 71,000 jobs in the final month of the year, down from 245,000 additions in November.

Having waited hours for the release of the data, traders reacted with a shrug in London, with the FTSE 100 down 5 points (0.1%) at 6,852.

FTSE 100 little changed after US economy sheds 140,000 jobs

12.15pm: Dow Jones expected to hit another high

With the release of December’s US jobs data about an hour away, US stocks are expected to open mostly higher.

That could obviously change if the numbers are especially surprising but at present, the expectation is that the Dow Jones industrial average will open around 81 points higher at 31,122 and the S&P 500 8 points to the good at 3,814.

The Nasdaq Composite, which last year often made headway while the other two indices retreated, finds the boot is on the other foot, with spread betting quotes indicating a 75 point fall for the tech-heavy index, which is expected to open at around the 12,992 level.

“The first US jobs report of 2011 is unlikely to garner the sort of attention it once did, for investors are still largely ignoring pandemic-hit data as they look forward to more normal times ahead. That said, there will come a time when economic data will be important again as central banks decide whether to tighten their respective policies again once the recovery starts to take shape, hopefully in the not-too-distant future,” said Fawad Razaqzada, an analyst at ThinkMarkets.

“In fact, judging by the recent price action on longer-dated US bonds, with 10-year yields spiking to levels not seen since March, it looks like investors are beginning to look ahead and expecting longer-term interest rates to rise. This is why the US dollar has managed to find a bit of support over the past couple of days, and why precious metals have struggled this morning. Friday’s jobs report may provide a reality check of the current situation,” he suggested.

Craig Erlam at OANDA said has been “some week”, referring to the events on Capitol Hill.

“Thankfully – and I wouldn’t bet against being proven wrong – at least on the US political level, I think the worst of the drama may be behind us. This week was a massive step too far and the video put out by the President suggests he knows it too and may now opt to de-escalate.

“Joe Biden will become President on 20 January and the topic of conversation can turn back to getting this horrific wave of Covid-19 under control and the economic recovery. The stimulus that was passed at the end of last year avoided a cliff-edge but doesn’t come close to the Democrats ambitions and they now have the numbers, just, to do something about it,” Erlam said.

Talking of the coronavirus, 275,000 neww cases were reported in the US last week, 19.9% higher than on Thursday the week before.

The seven-day average of cases rose to a new high of 228,000.

“The seven-day average is set to rise further with the release of today’s data, because testing activity was depressed on New Year’s Day, but we hope this will mark the peak, or at least the end of the rapid phase of the post-holiday surge in cases,” said Pantheon Macroeconomics.

In the UK, new cases fell yesterday compared to a week ago, for the first time since December 8, excluding Christmas distortions.

“Today could easily see a rebound, a week after New Year’s Day, but we expect to see a strong and sustained downward trend next week, as the holiday hit fades and the third national lockdown begins to augment the measures imposed in mid-December. The extreme pressure on the hospital system likely will increase until the latter part of this month,” Pantheon said.

Like US investors, UK punters seem to be waiting for the US jobs report before deciding which way to jump – or simply start the weekend a few hours early.

The FTSE 100 index was up 6 points (0.1%) at 6,863.

11.15am: What little excitement exists is in the FTSE 250

You can cut the excitement in the London stock market this morning with a feather duster.

The FTSE 100 was down 1 point at 6,856; in percentage terms, rounded down, that’s 0.0%, which says it all about this morning’s action.

Rentokil Initial PLC (LON:RTO), up 2.5% at 544p, provided a bit of much-needed excitement with its trading update, which included news of an acquisition.

It has bought Environmental Pest Service, a residential pest control company based in Tampa, Florida. A gig awaits the company in Washington …

The FTSE 250 is making a better fist of things, up 124 points (0.6%) at 21,134, perhaps because most of its constituents are domestically focused and not particularly fussed about US jobs figures.

One company that is decidedly not domestically focused is TUI AG (LON:TUI), the package tours company.

The shares are off 16% at 407.9p after the UK introduced a requirement for international travellers to show a negative COVID-19 test before being allowed into the UK.

Elsewhere in the FTSE 250, Clarkson PLC (LON:CKN) is all ship-shape and Bristol fashion after it upped profit guidance.

The shipbroking group said underlying profits, subject to audit, were likely to be in the range of £43mln-£45mln, versus average analyst forecasts of £41mln.

9.45am: Equities in a holding pattern

It’s beginning to look like traders have “waiting for non-farm payrolls” paralysis, with the FTSE 100 barely holding on to modest early gains.

London’s index of leading shares, which hardly bolted out of the stalls like a thoroughbred, is beginning to look more like a carthorse, plodding to a 9 point (0.1%) gain at 6,865.

House prices in December edged 0.2% higher, according to the Halifax House Price Index.

The year-on-year rise in house prices was 6.0%, the mortgage lender said.

“Average houses prices rose again in December, stretching the current run of continuous gains to six months; however, the monthly rise of 0.2% was the lowest seen during this period and significantly down on the 1.0% increase in November. The average house price was therefore little changed, but nonetheless still reached a fresh record of £253,374,” said Russell Galley, the managing director of Halifax.

“In the near-term, and with mortgage approvals still sitting at a 13-year high, there may be enough residual strength in the market to sustain prices up to the deadline for the stamp duty holiday and the scaling back of Help to Buy at the end of March; however, with the pace of the UK’s economic recovery expected to be constrained by the renewed national lockdown, and unemployment widely predicted to rise in the coming months, downward pressure on house prices remains likely as we move through 2021,” he added.

Halifax House Price Index

Elsewhere in the housing sector, Barratt Developments PLC (LON:BDEV) was going well, up 2.6% at 707p after what Irish broker Goodbody called “a very strong H1 [first-half] trading update”.

“Completions guidance has consequently been increased by around 5% which will deliver upgrades to earnings forecasts. Entering H2 Barratt are over 90% sold for 2021 which is a very strong position to be in,” said equity analyst David O’Brien.

8.50am: Gains continue in new year

The FTSE 100 index started on the front foot on Friday, the final day of the first trading week of 2021 as the Brexit re-adjustment continued.

The index of UK blue-chips advanced 20 points in the opening exchanges to 6,877.26.

Coronavirus vaccine hopes and a seeming return to law and order in Washington also seemed to support trading sentiment, which could very easily turn, however, if December’s US jobless number disappoints later.

Market commentators, meanwhile, were indulging in their favourite post-Christmas pastime – sledging the management and staff of Marks & Spencer (LON:MKS) after yet another lacklustre festive trading update.

 “The song remains the same at M&S, with a strong food offering unable to offset a clothing and home unit in need of urgent repair,” said Richard Hunter, head of markets at Interactive Investor.

His top-line analysis could have easily been dusted down from last year, or the year before that, or the year before that … you get the drift.

Anyway, Hunter isn’t wrong. However, the market appeared to have priced all this in as M&S shares, now constituents of the FTSE 250 rather the top 100, nudged 1% higher.

Sticking with the sector, Pets at Home (LON:PETS) showed Marks how it’s done as it raised its profit forecasts.

That said, the pet products retailer does have a tail-wind in the form of lockdown, which has pushed consumers towards its strong online offering. The shares advanced 13% in the early exchanges.

On the Footsie, the stand-out performer was Barratt Developments (LON:BDEV), which advanced 4% after it said it expects to resume dividend payments.

Taylor Wimpey (LON:TW.) – up 3% – and Persimmon (LON:PSN) – ahead 2.3% – were dragged along in Barratt’s wake and after the latest Halifax house price survey .

Proactive news headlines:

Zoetic International PLC (LON:ZOE) said its shares are now trading on the OTCQX Best Market, one of the highest level OTC markets in the US, under the ticker ‘ZOEIF’ after being upgraded from the OTCQB Venture Market. The cannabidiol (CBD) products specialist said the OTCQX market is designed for “established, investor-focused US and international companies” and that graduating to the new market from OTCQB is an “important milestone” and enables firms to build visibility among US investors. Zoetic also said that it is currently evaluating additional opportunities to improve investor relations and communications in North America In addition to the OTCQX trading, the company also revealed it has been included in the UK MSCI Microcap Index.

EQTEC PLC (LON:EQT) said that together with its German engineering, procurement and construction (EPC) partner ewerGy it has signed a memorandum of understanding (MoU) with Greek construction group Nobilis Pro Energy which provides for the collaborative development of the firm’s pipeline of opportunities in the country. The energy-from-waste technology firm said the MoU will allow the firms to work together to deliver advanced gasification projects in the Nobilis pipeline, starting with a 0.9 megawatt electric (MWe) gasification plant in the town of Almyros. EQTEC said the collaboration will be underpinned by a joint venture between the firm and everGy which is expected to source and provide funding and delivery capabilities for any projects provided by the Nobilis pipeline.

Walls & Futures REIT PLC (LON:WAFR) saw its net asset value rise to £3.96mln as at the end of September 2020, up from £3.30mln a year earlier The ethical housing investor and developer revealed in its half-year results that rents received in the six months to the end of September rose to £79,023 from £67,650 in the same period of 2019. The loss before tax narrowed to £52,293 from £92,200. The company also said it had sold its leasehold property in Southfields for £660,000 (before costs), a price that represents a 5.7% discount to the property’s valuation as at the end of March 2020.

88 Energy Limited (LON:88E, ASX:88E) said it is set to expand its footprint in Alaska as the group has been named as the high bidder on the Tract 29 area, via the 2021 Coastal Plain Lease Sale. Tract 29 is positioned as a 23,446 acre area adjacent to the company’s Yukon leases. The company described the expansion as “a logical step in the company’s aggregation strategy” in the North Slope region.

ADES International Holding PLC (LON:ADES) said Khaled Hassan has resigned as the group’s chief financial officer. The oil & gas drilling and production services provider said Hassan has decided to step down from his position to pursue a greater role outside of the group, although he will be sticking around for a while to ensure an orderly transition. The board has already begun the search process for a successor and is confident of being able to recruit a high-quality replacement.

Canadian Overseas Petroleum Limited (LON:COPL) is advancing its deal to acquire Atomic Oil & Gas LLC and said it has achieved two important milestones. The company said it had paid US$8mln as the second payment under the agreement to buy Atomic, which secures it a 15% interest in Atomic’s leases. At the same time, COPL confirmed it had closed an equity issue to raise £3mln which is in addition to a £6mln raise announced at the end of December 2020. The share issue is at the same price and same terms.

Pembridge Resources PLC (LON:PERE) has said it is to raise £570,000 by issuing shares to some existing shareholders and directors at 4p a pop. As well as issuing 14.25mln shares to raise fresh capital, the company has issued 308,793 shares to satisfy a liability. Pembridge chief executive and chairman Gati Al-Jebouri has subscribed for 3mln shares, taking his holding up to 15.4mln shares, which is equivalent to 30.7% of the company’s share capital. The mining company said the money raised will enable it to fund its operations without requiring any additional financing to meet its current operating costs and those related to maintaining a public company.

Power Metal Resources PLC (LON:POW) the AIM-listed metals exploration and development company said it has received notices to exercise warrants over 23,090,600 new ordinary shares of 0.1 pence each in the company at an exercise price of 1.0p each and the exercise of 5,500,000 warrants at an exercise price of 0.7p each. Subscription monies of £217,156 have been received by Power Metal in respect of these exercises.

Supermarket Income REIT PLC (LON:SUPR), the real estate investment trust providing secure, inflation-protected, long income from grocery property in the UK, said its board has declared an interim dividend in respect of the period from October 1, 2020, to December 31, 2020, of 1.465p per ordinary share, payable on or around February 26, 2021. The ex-dividend date will be January 21, 2021, with a record date of January 22, 2021. This dividend will be paid as a Property Income Distribution (PID) in respect of the company’s tax-exempt property rental business. At the group’s annual general meeting held on November 11, 2020, shareholders approved the introduction of a scrip dividend scheme. The scrip dividend alternative price is to be calculated using the average of the closing middle market quotations for an ordinary share for the five consecutive business days commencing on the ex-dividend date and will be announced and detailed on the company’s website on January 28, 2021.

Red Rock Resources PLC (LON:RRR), the natural resource development company with interests in gold, copper, cobalt, manganese, and other minerals, has said it will conduct a moderated online question and answer session with chief executive Andrew Bell on Tuesday, January 12, at 7.00pm GMT. Any shareholders or others wishing to attend or submit questions should go to: https://www.bigmarker.com/share-talk/Share-Talk-Presents-A-Live-Q-A-Session-with-Red-Rock-Resources-Plc. Questions may be submitted either in advance or during the webcast.

6.50am: Positive first week of 2021

The FTSE 100 index is set to add to the previous session’s modest gains on Friday, albeit ahead of the US jobs release for December.

Spread betting quotes point to the UK blue-chip index opening around 50 points higher at 6,907.

Yesterday, President Trump – or someone purporting to be him – acknowledged that he had lost the election and that a new administration would take over on January 20, 2021.

All it took was for social media companies to take his accounts away from him.

“With the Democrat clean sweep confirmed, financial markets hitched themselves onto the last stimulus train out of town overnight, helped along by a contrite (by his standards) President Trump promising an orderly transition of power. Equity markets powered higher, oil gained, and the US Dollar debasement conspiracy theorists pumped Bitcoin to a new high above $40,000.00 per digital coin,” summarised Jeffrey Halley as OANDA.

Overnight, the Dow Jones industrial average rose above 31,000, closing at 31,041, up 212 points. The index has recently added 1,000 points in record time – just 29 trading days.

The S&P 500 index hardened 56 points to 3,804 and the Nasdaq Composite put on 327 points at 13,067.

Asian markets picked up the baton on Friday with Japan’s Nikkei 225 594 points to the good at 28,085 and Hong Kong’s Hang Seng 210 points firmer at 27,759.

Trading in London could possibly be subdued until the US jobs data is out, however.

“Economists are expecting the headline reading for December to be 71,000, which would be a huge fall from the 245,000 registered in the previous report. In November, the unemployment rate fell to 6.7% – the lowest reading since March – but the consensus estimate for December is 6.8%. Average earnings are tipped to hold steady at 4.4%,” reported CMC’s David Madden.

“Given the upheaval in the labour market, the participation rate has been given extra attention. The metric fell from 61.7% in October to 61.5% in November and that could be seen as a sign that there is falling confidence in the jobs market. During economic downturns, some people who are out of work get so feed up the weak labour market they stop searching, and that contributes to a falling participation rate,” Madden explained.

Closer to home, the Halifax house price index report will be revealed at 8.30am and economists are expecting the index to have risen 0.5% month-on-month, after increasing by 1.2% in November.

The end of the first full week of 2021 brings updates from retailer Marks and Spencer Group PLC (LON:MKS), housebuilder Barratt Developments PLC (LON:BDEV).

Around the markets:

  • Sterling: US$1.3568, up 0.04 cents
  • Gold: US$1,908.70 an ounce, down US$4.90
  • Oil: US$54.66 a barrel, up 28 cents
  • Bitcoin: US$38,279, down US$1,317

6.45am: Early Markets – Asia / Australia

South Korea’s Kospi led gains among the Asian markets on Friday by jumping 3.97% higher after Wall Street surged to new record highs overnight.

The Hang Seng index in Hong Kong gained 1.20% but mainland Chinese stocks dipped with the Shanghai composite shedding 0.29%.

In Japan, the Nikkei 225 advanced 2.36% while Australia’s S&P/ASX 200 rose 0.68%.

READ OUR ASX REPORT HERE

Proactive Australia news:

Creso Pharma Ltd (ASX:CPH) (OTCMKTS:COPHF) (FRA:1X8) has welcomed recent news of the US Democratic Party winning the balance of power in the US Senate – an outcome which increases the likelihood of the decriminalisation of cannabis and passing of the Marijuana Opportunity Reinvestment and Expungement (MORE) Act.

Venture Minerals Limited (ASX:VMS) has recently completed a trenching program that delivered substantial mineralised intervals of up to 31 metres at 1.0 g/t gold and 20 metres at 0.6 g/t at the 100% owned Kulin Gold Project in Western Australia.

Auteco Minerals Ltd (ASX:AUT) (OTCMKTS:MNXMF) has appointed experienced mining executive Darren Cooke as its new chief operating officer to lead the campaign to grow the company’s 1-million-ounce resource at the Pickle Crow Gold Project in Canada.

Cardiex Ltd (ASX:CDX) is gearing up to expand its products and market access in 2021, after successfully completing a share purchase plan at $0.05 per share to raise $3.207 million.

Auroch Minerals Ltd (ASX:AOU) (FRA:T59) is fully funded headed into the new year after raising $2.9 million in late September last year to fund aggressive exploration plans across its high-grade nickel assets.

engage:BDR Ltd (ASX:EN1) is well-funded after raising $2.37 million through a placement and almost $1.9 million through a strongly supported share purchase plan in December 2020 with the aim of driving growth in the CTV (Connected TV) and advertising realms.

Lake Resources NL (ASX:LKE) (OTCMKTS:LLKKF) (FRA:LK1) has formally begun preparing a definitive feasibility study (DFS) for Kachi Lithium Brine Project in South America’s Lithium Triangle from which the company aims to produce clean lithium for the growing new-age battery market.

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