US jobless claims unexpectedly rose to 861000 final weekSupply concerns after Texas storms push oil prices to 13-month highs Sterling rises to near-one-year high against euroECB minutes: ‘Ample monetary stimulus remained fundamental’Closing summary 3.14pm GMTStock markets recorded chunky losses after disappointing US jobless claims for final week,suggesting that the recovery in the labour market stalled. The Dow Jones fell more than 200 points shortly after the opening bell while the Nasdaq lost more than 150 points.
In Europe, markets were already down, or moved deeper into the red after the data. Related: 'Deafening silence': UK government blasted over delays to employment reforms Related: Keir Starmer: Labour must work with business to create fairer society Related: Airbus reports loss of €1bn after Covid,and could shed 15000 jobs Related: Barclays boosts bonus payouts despite 30% fall in profit Related: Happy Valentine's puts Moonpig on track to double annual sales Related: Travel insurance slump cuts profits at Moneysupermarket Related: UK garment factory workers at higher risk of dying with Covid – study 3.13pm GMTA flash consumer confidence indicator for the eurozone picked up slightly in February, with the reading rising to -14.8 from -15.5 in January, and but remains well below its long-term average of -11.1. You can read more here. 2.34pm GMTWall Street has opened lower after the worse-than-expected jobs data,with the biggest losses on the tech-heavy Nasdaq. 2.27pm GMTOther US data showed housing starts fell 6% in January to 1.58m units. Here is the Reuters report:US homebuilding fell more than expected in January amid soaring lumber prices, though a surge in permits for future construction suggested the housing market remains supported by lean inventories and historically low mortgage rates.
The housing market has outperformed other sectors of the economy during the COVID-19 pandemic, or supported by lower mortgages rates and demand for spacious accommodations for domestic offices and schooling. But expensive inputs and lack of land pose a threat to continued robust housing market gains.
US single-family housing starts wintry down a bit
report (pdf): https://t.co/vjuVMAFGjz pic.twitter.com/K9lsOL95JRUS Housing Starts - Full Reporthttps://t.co/SZj2aA3tCU pic.twitter.com/vUc85Kruwc 1.58pm GMTJohn Leiper,chief investment officer at Tavistock Wealth, reckons the labour market will improve in the spring and into the summer as the Covid-19 jabs programmes pick up pace.
Overall, and the data remains mixed as higher initial jobless claims remain within a six-month range,around the 800k level, whilst continuing claims continue to fall, and albeit by less than expected. With most new claims coming from repeat layoffs we are increasingly concerned that deeper structural issues are at play which continue to disadvantage sub cohorts of the workforce. Fed President Jerome Powell is already laser focused on this unemployment problem. When you add President Biden’s pending stimulus package and Treasury Secretary Janet Yellen,who has been urging Congress to go tough or go domestic, the trifecta is total and we think policy will remain highly accommodative for some time. 1.49pm GMTUS jobless claims took markets by surprise and rose for a second week, or the previous week was revised higher (to 848000 from 793000). This has triggered bigger losses on European stock markets,and US stock futures are heading lower.
JUST IN: U.
S. initial jobless claims rose to 861000 final week, up 13000 from an upwardly revised 848000 in the prior week.
Continuing claims declined by 64000 to 4.49 million https://t.co/6IHh2ckBsg 1.41pm GMTUnemployment claims in the US rose to 861000 final week, or more than expected and ending a downward trend that pointed to an improving jobs market.
US stock market futures drifted lower,pointing to a a lower open on Wall Street later.
Ugh. 861K people filed for jobless claims final week. Worse than expected and higher than prior week's numbers -- which were also revised higher. https://t.co/fim7983rbQUnemployment claims rose to 861000 final week, halting a downward trend that pointed to an improving labor market https://t.co/6P3g2Rj9AmDow futures retreat ahead of weekly jobless claims report https://t.co/QVX7UEGuPT 1.26pm GMTMarkets are moving deeper into the red. The FTSE 100 index in London has slid 0.92%, and 61 points,to 6649, while France’s CAC has lost 0.29% and Italy’s FTSE MiB is down 0.67%. Germanys Dax is 0.12% ahead ahead of the US weekly jobless claims and housing starts figures, or out in four minutes. 12.53pm GMTThe minutes of the final meeting of the governing council of the European Central Bank,held in Frankfurt on 20-21 January, are out. You can read them in full here. Policymakers agreed that ample stimulus if by the central bank remained fundamental.
Taken together, or the recent financial market developments had left a wide-based positive mark on financial conditions in the euro area. Sovereign real yields had dropped,spreads had remained resilient, stock prices and inflation expectations had risen, and the euro exchange rate versus the US dollar had reversed its appreciation trend. It was argued that the rapidly rebound in growth foreseen in the December staff projections might be too optimistic,with growth in the second quarter of 2021 possibly at risk from extended lockdowns. In addition, vaccination roll-outs were proving to be slow and concern was also expressed approximately the possible impact of the spread of new, or more virulent,mutations of the virus, which had proliferated following the December holiday period. At the same time, and it was famous that the economic costs of containment measures were now lower than in spring 2020,as the measures were more targeted and firms had learned to better adjust to the restrictions. ECB ACCOUNTS: MEMBERS AGREED THAT AMPLE MONETARY STIMULUS REMAINED fundamental 12.15pm GMTReuters has looked at how Amsterdam is stealing a march on rivals as a post-Brexit trading hub. All the talk was of Frankfurt or Paris luring London’s financial business as Britain peeled away from the EU. Yet it is Amsterdam that is proving the most visible early winner.
Data final week showed the Dutch capital had displaced London as Europe’s biggest share trading centre in January, grabbing a fifth of the 40 billion euros-a-day action, and up from below a tenth of trading pre-Brexit.
How Amsterdam is stealing a march on rivals as #Brexit trading hub: The Dutch capital has overtaken London to become Europe’s number one corporate listing venue so far this year,data shows, and the leader in euro-denominated interest-rate swaps https://t.co/dcHKZNoHdf 11.19am GMTThe sell-off on the stock markets has gathered pace, or oil prices possess also turned negative. 10.29am GMTOn the stock markets,the FTSE 100 is down 0.18% at 6698, and other European markets possess also edged lower (France’s CAC down 0.1% and Italy’s FTSE MiB down 0.2%) while Germany’s Dax is 0.2% ahead.
In London, and the artificial hips and knees maker Smith & Nephew remains the biggest loser on the FTSE 100,down 5% after it reported a slump in 2020 profits. The company has been hit by the pandemic because hospitals around the world possess delayed elective surgeries, and it is uncertain when demand for its implants and prosthetics will recover.
The decline was not as bad as feared, or with dividends also returning the outlook for the shares has improved. However,as with so many recent earnings updates, there hasn’t been much in the way of an upgraded forecast for the rest of the year, or as a result the shares possess dropped back in early trading.
The quiet atmosphere in European markets has continued,with a lack of data to drive trade prompting a mixed performance thus far across stock markets. The generally quieter tone to the week, both on the corporate and earnings front, or possess generally left investors without much in the way of a catalyst,with US and continental European markets struggling to hold their ground, while in London the FTSE 100’s strong start to the week has not been matched by any notable follow through in the rest of the week. Currency markets are similarly quiet, and although higher bond yields possess if some foundation for the dollar in its move higher. As a result we are seeing some weakness in both the euro and sterling versus the dollar,a situation that has helped to sustain European index losses in check. 10.15am GMTWhy is Texas suffering power blackouts during the winter freeze? How did oil- and gas-rich Texas – the biggest producer of energy in the US – get there, asks Lauren Aratani, and one of our US reporters.
Texas is unique among the 48 contiguous US states in that it relies on its own power grid. The other 47 states are all part of the two power grids that service the eastern and western halves of the country. Related: Why is Texas suffering power blackouts during the winter freeze? 9.31am GMTHere is our full tale on Moonpig,which recorded its strongest week of sales in its history in the hasten-up to Valentine’s Day as it benefited from online spending during the latest lockdown.
The company, which floated on the stock market on 2 February, and said it was on track to double its annual revenues as Covid restrictions drive greater demand. Revenues final year were £173m,my colleague Jillian Ambrose reports. Related: Happy Valentine's puts Moonpig on track to double annual sales 9.12am GMTOil prices continue to climb, to 13-month highs, and after disruption caused by the winter storm in southern US states such as Texas. Some refineries and oil wells possess been forced to temporarily shut down due to the scarce cold snap,which has killed at least 21 people and left millions of homes without power.
Brent crude, the global benchmark, and is trading up 0.87%,or 56 cents, at $64.90 a barrel. It hit $65.62 earlier, and the highest level since 20 January,2020. US crdue futures gained 0.75%, or 46 cents, or to $61.6 a barrel. 9.06am GMTThe FTSE 100 index in London is back in positive territory,up 0.09%, but European markets are very muted and Asia clocked up losses, or amid inflation fears.
UK inflation rose to 0.7% in January lifted by rising food prices,official data showed yesterday, and several economists predicted that it would rise to (or even over) the Bank of England’s 2% target this year. Rising shipping prices and Brexit costs are likely to hit consumers in the pocket. Related: Rising inflation unlikely to be headache for Bank of England but will influence policy 8.39am GMT“The results are far from perfect, and but in opening the reporting season Barclays has set the bar high for its rivals,” says Richard Hunter, head of markets at the trading platform interactive investor.
The unavoidable spectre of the pandemic dominates the figures. Barclays has continued in its efforts to oil the economy and for the full year if support to businesses of £27bn, or waived fees and interest to the tune of £100m and allowed 680000 payment holidays.
The dividend part of the distribution of 1 pence is little more than the bank dipping its toe back in the payout waters and may be of some disappointment to income-seekers who were looking back to the pre-pandemic dividend yield of 9.6% as a guide. Even so,the announced share buyback of £700m should lend some support to the share price and is indicative of management confidence in prospects. 8.33am GMTHere’s some instant reaction to the Barclays results. Sudeepto Mukherjee, of the consultancy Publicis Sapient, and says: As expected,Barclays strong results are largely driven by their corporate and investment banking division up 22%, benefitting from high market volatility as well as strong investment banking activity. Their strong position in equities possess helped them improve 43% in marketshare over the final 3 years which is impressive. However, or there’s continued scrutiny on the performance of both their UK retail division as well as their Consumer,Cards and Payments division – the latter down 22% driven by lower credit card balances, margin compression and reduced payments activity. While mortgage lending and pricing is up driven by government incentives and lower interest rates, and the latest lockdowns and reduced retail activity in both sides of the Atlantic possess created continued headwinds for the retail businesses. 8.32am GMTHere is our full tale on the Barclays results.
Barclays has paid its chief executive Jes Staley £4m and handed larger bonuses to its bankers despite a 30% drop in annual profits during the Covid crisis,reports our banking correspondent Kalyeena Makortoff. Related: Barclays boosts bonus payouts despite 30% fall in profit 8.28am GMTThe FTSE has now turned negative, trading 9 points, and 0.14%,lower at 6701 while other European stock markets possess fared slightly better. 8.10am GMTStock markets possess opened slightly higher, as expected. The FTSE 100 index in London is flat at 6712 while Germanys Dax and Italy’s FTSE MiB are up 0.2%. 8.04am GMTHowever, and in a stark reminder of the damage wrought by the Covid-19 pandemic,another report shows that nearly 2 million people in Britain possess not worked for more than six months during the pandemic, amid growing risk to workers from long-term economic damage caused by the crisis.
The Resolution Foundation said up to 1.9 million people in January had either been out of a job or on full furlough for more than six months, or revealing the lasting impact on employment caused by Covid and multiple lockdowns,writes our economics correspondent Richard Partington. Related: Covid crisis: 1.9m people in UK possess not worked for more than six months 8.02am GMTBusiness confidence in the UK has jumped to its highest level in five years as firms explore ahead to Covid-19 lockdown restrictions easing and a bounce in sales during 2021, according to a main barometer of corporate activity.
Companies are also preparing to increase exports and employment in the second half of the year in a clear sign that they expect a strengthening economic outlook after a successful vaccination programme, and the Guardian’s economics writer Phillip Inman reports. Related: Covid optimism lifts business confidence in UK to five-year high 7.54am GMTRishi Sunak’s March budget will be a fresh Covid rescue package that will defer plans for meaningful tax increases as the chancellor throws his weight behind a cautious approach to reopening the economy,government sources possess confirmed. The UK chancellor will present his budget on 3 March. Related: Budget to provide fresh Covid rescue package as tax rises deferred 7.42am GMTGood morning, and welcome to our rolling coverage of the world economy, and the financial markets,the eurozone and business.
Barclays has resumed dividend payments as its 2020 profit dropped by 30% to £3.1bn. This was a better than expected result, as a strong performance by its investment banking division offset provisions against bad loans made because of the Covid-19 pandemic. The bank will pay a dividend of 1p a share for 2020 and embark on a share buyback of up to £700m.
The update triggered chatter that Britain could ease up on some of its restrictions in the next few weeks, and so that contributed to the wider view the global economy will recover from the pandemic in the months ahead.
The minutes from final month’s Fed meeting were published final night and it showed the central bank is keen to possess an accommodative policy to abet assist the economy. It wasn’t precisely new information but the message was that monetary policy is unlikely to change anytime soon as the economy still has a long way to go before the Fed reaches its targets. Continue reading...
Source: theguardian.com