MARKET WRAP: FTSE 100 finishes higher, ADP misses estimates, oil falls

imageEconomy33 minutes ago (Sep 01, 2021 16:28)

© Reuters.

Key Points

  • FTSE 100 closing price of 7,150.6, +0.4%
  • FTSE begins month on front foot
  • USD declines amid weak private payrolls report
  • Oil falls as OPEC+ meets
  • Bitcoin steady, DeFi cryptos outperform

By Samuel Indyk – The FTSE 100 began the new month on the front foot as the midcap FTSE 250 hit another record high.

888 Holdings (LON:888) was one of the best performing major UK stocks after a trading update pre-market. The gambling company reported a 39% increase in revenue in the first half of the year and said they were confident that revenue and adjusted EBITDA in the full year would be slightly ahead of expectations.

WH Smith (LON:SMWH) was one of the bigger laggards. The retailer said they anticipate that profitability in the full year ending August 2022 will be at the lower end of current market expectations due to Covid uncertainty affecting the travel business and accounting finance changes relating to previous convertible bond issuance.

The US Dollar Index was trading lower in the wake of the ADP private payrolls data. ADP (NASDAQ:ADP) said private-sector employment increased by 374,000 from July to August, below the expected 613,000. The data comes ahead of the official Nonfarm Payrolls report on Friday, although the correlation between the ADP and official figures has broken down somewhat since the pandemic began.

“The Delta variant of Covid-19 appears to have dented the job market recovery,” said Moody’s Analytics chief economist Mark Zandi. “Job growth remains inextricably tied to the path of the pandemic.”

GBP/USD was relatively steady, finding resistance just ahead of 1.3800 before paring back slightly. The latest IHS Markit manufacturing PMI reading did little to change the needle, despite a slight revision higher to 60.3 from 60.1 previously.

“Although solid gains in output and new orders were achieved, companies reported that production, delivery and distribution schedules were experiencing substantial delays,” said IHS Markit Director Rob Dobson.

WTI and Brent crude futures were both trading lower as the OPEC+ group met to discuss oil the oil market. The Joint Ministerial Monitoring Committee (JMMC) recommended sticking to the supply hike plan for now, according to sources. That plan will see the nations boost oil production by 400,000 barrels per day this month.

The weekly inventory data from the Energy Information Administration (EIA) showed US crude stockpiles dropped by 7.169 million barrels in the latest week, versus expectations for a draw of around 3 million barrels. Gasoline inventories unexpectedly increased by 1.29 millions barrels, versus expectations of a draw of 1.633 million barrels.

Natural Gas futures were outperforming in the energy complex as some production remains offline in the Gulf of Mexico following Hurricane Ida.

Cryptocurrency markets were showing decent gains, particularly those cryptocurrencies linked to decentralised finance (DeFI) projects, such as Ethereum, Cardano, and Solana.

Bitcoin was relatively steady despite comments on regulation from the US Securities and Exchange Commission Chair Gary Gensler.

“At about $2 trillion of value worldwide, it’s at the level and the nature that if it’s going to have any relevance five and 10 years from now, it’s going to be within a public policy framework,” Gensler told the Financial Times in an interview.


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MARKET WRAP: FTSE 100 finishes higher, ADP misses estimates, oil falls

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