FTSE 100 Continues To Fall As Traders Consider Soft US Open

If equity buyers were hoping US markets would give a boost, they seem to be disappointed

  • FTSE 100 slides 32 points
  • US indices will open lower
  • Commodity prices under pressure

US stocks are expected to open slightly lower on Monday, coming back from record highs last week, as a drop in commodity prices indicated investor unease over the strength of the economic recovery despite a non-farm payroll stronger than expected Friday in July.

Futures for the Dow Jones Industrial Average were down 0.2%, while futures for the larger S&P 500 index were also down 0.2%, and Nasdaq-100 futures were relatively stable.

Benchmark Brent crude oil prices have fallen nearly 4% following a UN climate change warning as China introduced new virus crackdowns.

Meanwhile, gold and silver prices fell briefly before regaining most of the ground lost amid rising bond yields and dollar strength following the latest jobs report which should lead to a decrease in the Federal Reserve’s share as soon as possible.

Investors also have the earnings season underway to watch, Tyson Foods and vaccine developer BioNTech are expected to report ahead of the New York opening bell, while AMC Entertainment is expected to report earnings after markets close. Well-known names like Walt Disney and Airbnb are also expected to report later this week.

A JOLTS report on job vacancies in June will also be on the lookout for more information on the labor market.

In London, either my screen has frozen or the FTSE 100 is stuck in concrete.

After a quick screen refresh, it looks like the Footsie has moved in the last hour; it is a little lower, at 7,090, down 33 points (0.5%).

11:10 am: OPA activity brightens up the debates

It’s been a lackluster start to the week in London, but there has been plenty of takeover activity – real, imagined or threatened – to spice up the proceedings.

In addition to the previously mentioned interest in SSE and Entain (see previous reports), US queer maker Philip Morris International has increased its supply for (), the respiratory drug group, and outpaced the group’s supply of private equity Carlyle Group which had supported by the board of directors of Vectura.

It’s a little strange to see a tobacco group bid on a company with the stated goal of improving human health, but Philip Morris, whose best-known brand is Marlboro, has increased its offer to 165p per action against 150p, valuing Vectura at £ 1.02 billion.

Carlyle’s rival bid was launched at 155 pence per share, itself an increase from an initial offer of 130 pence per share that Vectura’s board of directors was happy enough to accept in May in this which now looks like a colossal error in judgment.

Another bidding war is escalating against Morrison (Wm) Supermarkets PLC, where US private equity giant Fortress increased its agreed bid to 272p from its previously agreed bid of 254p.

The acquisition panel has given Clayton, Dubilier & Rice (CD&R) more time to decide whether to make a competing offer. The “set up or close” deadline for CD&R was today, but it has now been extended to August 20.

(), the security checks engineer, lost 0.2% to 2,893 pence after announcing it had recently completed three acquisitions for £ 48.8million and sold Texeco for £ 65million.

Finally, (), the fast food delivery company whose initial public offering at the start of the year failed dramatically, rose 8.6% this morning after its German rival (,) revealed that he owns a 5.09% stake in the company.

The FTSE 100 lost 20 points (0.3%) to 7,103.

9:50 a.m .: A bit of excitement in the lackluster utility industry

Footsie’s slow start to the week continued; when the top three top-notch risers are utilities, you know it’s a “risk-free” day.

The London heavy stocks index lost 21 points (0.3%) to 7,102, with the investment platform operator (), down 9.9% to 1,478p, leading the pullback after the disappointment of its annual results.

Group CEO Chris Hill boasted that he had a record 223,000 new (net) customers in the year, but operating costs, which were expected to rise as the customer base grew. , increased by 24%, while the number of customers increased by 17%.

Ahead of this week’s results, (), the owner of the Ladbrokes and Coral brands, is down 1.6% to 1898.5p, returning some of the recent gains seen following rumors that MGM is giving a new kicked off the tires and was considering making an offer for the company.

In the other direction, (), () PLC and United Utilities PLC, all good companies, no doubt, but as boring as seawater.

SSE, up 3.4%, was the best performer of the three ASes, activist investor Elliott Group reportedly acquired a significant stake in the energy company.

READ SSE considers possible takeover target as activist steps up stake – report

Severn was up 1.2% and UU was up 1.0% in sympathy.

Among mid caps, recruitment firm () PLC was down 4.5% to 2,047.29p[aprèsquesesintérimairesn’aientpasréussiàobtenirlegrade[afteritsinterimsfailedtomakethegrade

“In general, recruiting companies offer decent insight into the health of the economy, as companies look to hire when times are good. Thus, the reestablishment of the first half dividend at PageGroup and a strong recovery in revenues and earnings reinforces the idea that there has been a significant global rebound in the first six months of 2021, ”said Russ Mold, Managing Director of AJ Bell’s investments.

In a way, I feel that there is a “but” to come …

“The bad news is that PageGroup does not look as optimistic for the rest of the year, as the emergence of new variants of Covid means that restrictions remain in place in several of its markets.

“It’s also possible to note a degree of uncertainty as to whether recent growth is a short-term effect driven by pent-up demand or something more lasting,” Mold said.

8:20 a.m .: Mixed start

As expected, the FTSE 100 opened the first trading session of the new week in negative territory, taking inspiration from major Asian markets.

The dip in the red was marginal and supported by low trading volumes.

The miners were offered early on after fairly anemic Chinese trade data over the weekend.

The drop in gold to levels last seen in May seemed to have little impact on the sector, while the drop in crude oil had a marginal effect on BP (LON: BP).

At first glance, the results of the funds of the supermarket group Hargreaves Lansdown () appeared robust. The market, however, was not impressed with the shares falling 7.1% in opening trade.

6:50 a.m .: Half-hearted departure announced

The FTSE 100 looks set for a smooth start, taking inspiration from major Asian markets (well, those of them are open).

With the shutdowns of Japan and Singapore, trade volumes were a bit weak in the region as traders took stock of the impression of better-than-expected Friday jobs and some lackluster Chinese trade data over the weekend. -end.

The drop in the price of gold to its lowest level in five months has attracted attention.

More difficult to understand was the most often cited cause, the breakdown of a level of technical support for the precious metal.

“With zero to no liquidity this morning, it’s clear that when gold broke through $ 1,750 an ounce, it triggered a cascading negative feedback loop of stop-loss selling in a market with no offers,” said Jeffrey Halley, analyst. at OANDA.

The drop in crude oil prices was easier to understand – fears that this spread of Covid’s delta variant could put kibosh on travel appear to have been the trigger for the 1.9% drop.

Looking ahead, the company’s schedule for the week promises to be busy with updates from Deliveroo (), a flurry of insurers, bookies, travel company TUI () and InterContinental Hotels. () planned for the coming week.

Around the markets

  • Pound $ 1.3869 (-0.02%)
  • Bitcoin $ 43,637.38 (-1.66%)
  • Gold $ 1,740.50 (-1.22%)
  • Brent crude $ 69.39 (-1.85%)

6:50 a.m .: Early Markets – Asia / Australia

Inventories in the Asia-Pacific region were mostly higher on Monday, with Australia reporting 280 new cases of COVID-19 on Sunday, most of them in the populated state of New South Wales.

About 15 million people, or 60% of Australia’s population, are under strict lockdown.

China’s Shanghai Composite gained 1.07%, Hong Kong’s Hang Seng index rose 0.63%

In Japan, the Nikkei 225 gained 0.33% while South Korea’s Kospi fell 0.15%.

Australian stocks rose with the S & P / ASX 200 trading up 0.07%.

READ OUR ASX REPORT HERE

Comments are closed.