Market Report: UK hiring activity slows, London set to lose another name
- FTSE 100 opens marginally higher, reports show UK hiring activity slowed in August
- Competition probe wipes hundreds of millions off pet-stock valuations
- Smurfit Kappa in talks to merge with American firm in another blow to London
- Apple loses $200bn on reports of China iPhone ban
- Extended production cuts push Brent crude towards $90 a barrel
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown: “The FTSE 100 has squeaked out some gains in early trading, despite mixed trading in the US. The KPMG and REC UK report has shown that hiring activity cooled in August, with permanent roles falling at the fastest rate in three years. This contraction suggests heat may be coming out of the economy in a more pronounced way, which would suggest interest rates are having the desired effect and adds weight to the argument we’re near the top of the cycle. A looser labour market helps to keep wage expectations and bargaining power down, which in turn can help to keep inflation on a more favourable trajectory.
The Competition and Markets Authority’s decision to launch a review of the pet sector is a welcome move for pet owners, who will appreciate answers on whether or not they’re receiving fair pricing and information. With vet pricing shooting upwards faster than inflation, it’s a valid question. It’s less good news for companies that operate in the sector though, with half a billion pounds wiped off the stock market value of a leading veterinary group yesterday, with limited respite from the rout today. Sentiment towards the sector is likely to remain negative until the CMA reports its findings in a few months – at which point details about proposed changes will be clearer. There’s hope that recommendations will be easy to handle, for example making group branding more apparent and offering more information on pricing.
London could face losing another big name, with FTSE 100 paper packaging giant, Smurfit Kappa, in talks to merge with a smaller American company. Such a move could see the group drop its premium London listing and focus on the US instead. While this development isn’t a direct result of London’s PR problem, it certainly doesn’t help. The pull of London simply isn’t compelling enough to attract and retain the best of the best, or at least that’s how it’s starting to look from some angles.
Apple shares have fallen 3% following a report China’s looking at curbing the usage of iPhones for state employees. In the last two days, the group has shed $200bn of its market value. The changes in China on their own aren’t the end of the world, but the market is concerned this move suggests an acceleration of policy against the use of western tech and products. China is becoming increasingly domestic focussed, and a reduction in the value and usage of Apple’s brand in China could become a bigger problem. There is of course plenty of growth potential left in other regions around the world for the tech giant, but this is certainly a development it could do without.
Brent crude has climbed back towards $90 a barrel, in a blow to consumers. Extended production cuts from OPEC+ are largely to blame, and there may well be further gains in the coming days, as markets figure out how meaningful these changes are.”
