FTSE 100 to drift lower after yesterday’s US jobs excitement

Its all quiet on the Western front this morning, with US markets closed for the day.

Today would normally be the day on which the US jobs numbers for last month are released but because of the market holiday, they were released yesterday and provided a boost for the market.

The effect seems to be fading today, however, with the FTSE 100, which rose 82 points yesterday to close at 6,240, set to drift 6 points lower to 6,234 at the outset.

US markets lost some of their early enthusiasm yesterday but the Dow still closed with a 92 point gain at 25,827 while the S&P 500 rose 14 points to 3,130.

This morning, Asian markets have the Chinese Caixin/Markit services Purchasing Managers Index to chew on and are generally in fine fettle.

In Japan, the Nikkei is up 54 points at 22,200 and in Hong Kong the Hang Seng is 120 points firmer at 25,244.

The Caixin/Markit services PMI rose to 58.4 in June from 55.0 in May; a value above 50 indicates an increase in activity.

The rise was attributed to the easing of coronavirus-related lockdowns, and was the highest reading since 2010.

“This bodes well for Chinese consumer demand. A sub-index shows that new export business also expanded for the first time since January, something we have yet to see in the manufacturing sector,”observed Danske Bank.

If tomorrow is a big day of celebration for the “septics” across the pond, many in England will be celebrating the reopening of the pubs so it is perhaps appropriate that pubs group Fuller, Smith & Turner PLC (LON:FSTA) is bringing out its full-year results.

With the reopening imminent, investors are likely to focus on the companys outlook as it emerges from lockdown, as well as the full extent of the damage lockdown has inflicted on its finances.

On the macro front, there will also be June UK services PMI data for investors to chew over as it will provide additional clarity to how hard the sector has been hit by the slowdown as well as any signs of recovery as restrictions have eased.

Significant announcements expected

Finals: Fuller, Smith & Turner PLC (LON:FSTA)

Economic data: UK services PMI

Around the markets

  • Sterling: US$1.2461, down 0.08 cents
  • 10-year gilt: yielding 0.188%, down 2.27 basis points
  • Gold: US$1,786.70 an ounce, down US$3.30
  • Brent crude: US$42.70 a barrel, down 44 cents
  • Bitcoin: US$9,104, up US$17

Business headlines

Financial Times[hhmc]

The US jobless rate declined to 11.1% after 4.8mln new workers were added to payrolls in June, as the economic rebound from the initial coronavirus shock gathered pace.

Deutsche Bank is collaborating with German regulators on a possible rescue of Wirecard Bank, the deposit-taking unit of the crisis-torn payments group.

Shares in Lemonade, the insurance start-up backed by SoftBank, more than doubled on their first morning of trading, putting the companys value at more than $3 billion.

Tesla shares revved higher after it revealed it had ridden out the coronavirus shutdown far better than anticipated.

Novartis is to pay US$642mln in settlement of a dispute with the US authorities over claims it had bribed US doctors and improperly funded drug purchases.

The Times[hhmc]

The restaurant group Casual Dining Group was tipped into administration with the loss of 1,900 jobs.

Meggitt has hailed initial signs of a recovery in the struggling aviation sector after coronavirus disruption knocked its sales by 15%.

McLaren has reached an agreement with its bondholders and called off a legal battle after receiving a £150 million financiaRead More – Source

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