London pre-open: Stocks seen lower as investors eye payrolls
By Michele Maatouk
Date: Friday 07 Feb 2025
(Sharecast News) - London stocks were set to fall at the open on Friday following a record close a day earlier, as investors eyed the latest US non-farm payrolls report.
The FTSE 100 was called to open down around 30 points.
Ipek Ozkardeskaya, senior analyst at Swissquote Bank, said: "This week's US jobs data has so far given mixed signals with lower job openings in December, lower job cuts during the course of last year but a jump in terminations in January, weaker labour productivity, a weaker-than-expected jump in labour costs, and a stronger-than-expected ADP employment figures.
"Today, the official US jobs data is expected to print 169,000 new nonfarm jobs added last month, with a slightly slower wages growth and a stable unemployment rate near the 4.1%. But investors will also focus on the annual revisions to the jobs figures. Note that, the early estimates in August hinted that the US jobs numbers could see a downward revision of more than 800,000 jobs. Economists expect that the downward revision will rather be around 600-700,000 jobs.
"If that's the case, the week will end with the narrative that the US jobs market is healthily slowing - a scenario that would allow the Fed to continue cutting the rates but not hurriedly, and keep the market sentiment at a sweet spot. A weaker-than-expected NFP figure, and/or rising wages would weigh on sentiment, while a stronger-than-expected NFP - if combined to softening wages would reinforce the goldilocks scenario."
The payrolls report for January is due at 1330 GMT, along with the unemployment rate and average earnings.
On home shores, industry data showed retail footfall jumped in January as shoppers braved winter weather to hit the January sales.
According to the latest BRC-Sensormatic footfall monitor, total UK footfall increased by 6.6% last month, comfortably reversing December's 2.2% decline.
All types of destinations saw an uptick in footfall, led by retail parks and shopping centres.
Footfall had been flat in December in retail parks, but jumped 7.9% in January, while shopping centres saw a 7.4% increase following a 3.3% decline a month earlier.
On high streets, footfall rose by 4.5%, compared to a 2.7% dip in December.
Helen Dickinson, chief executive of the British Retail Consortium, said: "Store visits increased substantially in the first week of the month, as many consumers hit the January sales.
"Despite snowy weather and Storm Eowyn causing disruption in some areas, footfall was still positive across major UK cities over the whole month."
In corporate news, Victrex held guidance after a solid first-quarter performance saw revenues rise 9% but warned trading conditions remain mixed, with medical revenues continuing to be subdued on a year-to-date basis, driven by ongoing industry destocking among its customers.
The company said guidance remained for at least mid-single digit volume growth for fiscal 2025, with underlying pre-tax profit growth ahead of volume growth.
Legal & General said it will sell its US protection business to Japanese peer Meiji Yasuda, with the latter taking a 5% stake in L&G in a deal worth $2.3bn.
The transaction will kickstart a long-term strategic partnership between the two companies to support growth ambitions in US Pension Risk Transfer and asset management markets. L&G intends to launch a £1.0bn buyback following completion, which is expected towards the end of 2025.
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