Equity markets are firmly in the red as traders are concerned about the state of the global economy.
The US jobs report was a mixed bag. The headline non-farm payrolls figure showed that only 20,000 jobs were added in February, which grossly undershot the expectation of 180,000. The January report was revised higher to 311,000 from 304,000, while the unemployment rate slipped to 3.8%, from 4%. Average earnings grew by 3.4% and 0.4% on a yearly and monthly basis respectively. Outside of the dreadful headline figure, it was a solid update, and it should benefit the US economy in the medium term.
China posted disappointing trade numbers overnight. Exports and imports declined by 20.7% and 4.8% respectively. The poor numbers added weight to the argument that the global economy is cooling down. In London, mining stocks are in the red due to the weak import numbers. China is a major importer of minerals, and dealers are worried China’s demand for metals will wane. It is worth remembering that China celebrated the Lunar New Year last month, so the figures might not be a true reflection of trade in China.
The Norwegian sovereign wealth fund is going to cut its exposure to the oil and gas sector, as the fund will exit its positions in energy companies that operate in the upstream industry exclusively. Major oil companies like BP and Royal Dutch Shell have integrated upstream and downstream operations, so they are safe for now.
Debenhams shares jumped today after Mike Ashley made a play to takeover over the struggling retailer. Debenhams issued yet another profit warning this week, and that encouraged Mr Ashley to call an extraordinary general meeting. He is aiming to oust the vast majority of the board of directors and install himself as the CEO of the company.
GVC shares sold off today after the CEO and chairman solid a combined 3 million shares in the company. CEO Kenneth Alexander sold 2.1 million shares, and Lee Feldman, the chairman, sold 900,000 shares, but the management confirmed they are committed to the company.
SIG shares are in demand today after the company’s showed its restructuring plan is paying off. Full-year revenue dropped by 4.86% to £2.74 billion. The group swung to a pre-tax profit of £28.5 million from a loss of £54.7 million last year. The group sold-off six non-core businesses as part of its restructuring programme, and the headcount was cut by 20.4%. When you remove the costs associated with the sale of businesses, the firm registered a profit of £75.3 million. Further changes are in the pipeline for 2019 too. The firm has made an impressive turnaround, and given that the stock has reached an eight month high this today, investor confidence is ticking up too.
Bodycote shares jumped today after the company posted a 12% jump in full-year pre-tax profit to £136.4 million. Revenue edged up by 5.6% and free cash flow increased by 17%. The group upped the ordinary dividend by 9% to 19p, and it declared a special dividend of 20p. Bodycote maintained its outlook for 2019 too, so the group is clearly confident in its ability to perform.
EUR/USD is higher on the back of the sell-off in the US dollar. There was some mixed data from the eurozone today. Germany industrial orders dropped by 2.6% in January, which majorly undershot the 0.5% increase that economists were expecting. On the other hand, French industrial orders jumped by 1.3% in January, which comfortably topped the 0.1% forecast, but it is worth noting the December figure was revised lower to 0.0% from 0.8%.
USD/CAD is lower due to the mixed US jobs update, and the respectable jobs announcement from Canada added to the move. Canadian unemployment remained at 5.8% meeting forecasts. The employment change jumped by 55,900, and that was made up of 67,400 full-time jobs and a drop of 11,600 part-time jobs.
Oil is in the red as traders are worried about global demand. Yesterday’s European Central Bank growth downgrade for the eurozone, China’s poor trade figures, and the dismal headline US unemployment rate hurt sentiment.