Friday, 4 November: Indices in London were on the back foot, as Brent crude slipped lower again to c. $45.50/bbl. Gold saw inflows as we woke up this side of the world, as it has since the start of the week, reflecting investor caution primarily relating to the US Presidential election, but risk off sentiment was not aided by yesterday’s Brexit High Court ruling, and US jobs may well have provoked frayed nerves. Gold is now $35 more expensive sitting at c. $1303.60/oz than seven days prior, reflecting a shift in investor sentiment.
Paddy Power Betfair was one of the larger beneficiaries of trade, as indices in the capital were on the slide. The gambling company was 3.64% higher after delivering good news to investors. Earning guidance was taken up a notch, as work to bring synergies to fruition was tracking ahead of plan. The Group now expects £35.0m of synergy cost savings in 2016, £5.0m more than originally guided.
DFS fell 12% as Private equity firm Advent International Corp sold half its stake in the FTSE 250 sofa retailer. Advent sold 25.7m DFS shares at 240p to raise a total of £61.7m. Shares closed at 263.70p on Thursday.
The announcement of U.S jobs data helped the dollar edge higher, as it was supportive of a potential rise in the fed funds rate. Nonfarm payrolls increased by a seasonally adjusted 161,000 in October from the prior month, following September’s upwardly revised gains of 191,000. The unemployment rate, derived from a separate survey of American households, ticked down to 4.9% last month, from a 5% September read. Average weekly earnings were also on the rise(+2.8%) as firms compete at the margin to attract new labour. The data gave the S&P 500 the impetus to move higher, after it was poised for its first nine-session slide since 1980.
At the close, European indices were down with the FTSE 100 -1.43 the DAX 30 -0.65% and the CAC 40 -0.78%.