London pre-open: Stocks seen higher ahead of payrolls
London stocks were set to rise at the open on Friday following losses in the previous session, as investors eye the latest US non-farm payrolls report.
The FTSE 100 was called to open 33 points higher at 6,374.
The payrolls report, unemployment rate and average earnings are due at 1330 BST.
CMC Markets analyst Michael Hewson said: “Today’s May payrolls report is expected to see 8m additional jobs lost on top of the 20.5m in April, though we can hope given the lower ADP number earlier this week, that we might see the unemployment rate peak shy of the 20% level, at 19.1%, or possibly a little lower, after the sharp rise to 14.7% seen in April.
“With certain sections of the US economy slowly reopening, there is a hope that we could start to see the unemployment rate start to plateau as more and more people return to work after being furloughed.
“Average hourly earnings look set to rise further, to 8.5%, after last month saw a rise to 7.9%. This unexpected jump in wages appears to be a result of the widespread loss, or furloughing of lower paid jobs as a result of the economic lockdowns. As these same workers start to return to work this figure should start to come down again, though it is also true that some of those lost jobs may never come back. This is one of many data points that the Federal Reserve will be keeping an eye on in the coming months, as it keeps an eye on inflationary pressures.”
In UK corporate news, scientific engineer Renishaw scrapped its final dividend in response to the coronavirus crisis as it looked to control costs.
The company said it would “review its position on dividends during the next fiscal year with the intention of reinstating the dividend as soon as it is appropriate to do so”, adding that current trading remained in line with expectations.
Taylor Wimpey said its order book was strong with a healthy increase in reservations in recent weeks and strong demand for appointments at reopened show homes.
The FTSE 100 housebuilder said most of its construction sites, sales centres and show homes had reopened. Scottish construction sites are preparing to reopen in line with guidance. The UK order book has continued to increase and was £2.8bn at the end of May, up from £2.5bn a year earlier.
Morgan Advanced Materials updated the market on its trading amid the Covid-19 pandemic, reporting that sales for the 21 weeks from 1 January to 24 May were 8.8% lower on an organic constant-currency basis, compared to the same period last year.
The company said that reflected a 3.2% decline in the first quarter, largely driven by shut-downs in China, followed by a decline of 19.5% in April and May, as the impact of Covid-19 was felt more widely across the group.