It seems the FTSE has lost its spark. An explosive start to the year has petered out in the last couple of sessions, once again leaving the UK index way off the pace of its European and US cousins.
Though the UK’s mid-caps are looking pretty perky – the FTSE 250 rose 1%, striking 21,150 for the first time since the end of February last year – the FTSE 100 failed to really move after the bell, eking out a 0.2% increase.
Its sprint out of the gate in 2021 still means it is on track for its best ever start to a year. However, it certainly seems like momentum has dissipated. We will find out next week whether this is indicative of a post-splurge breather or wider concerns over the rapidity of the year’s early growth.
Putting the UK to shame, the Eurozone indices continued to chug ahead. The DAX, which stuck its pinkie finger across 14,000 for the first time last night, is heading for another record this Friday, climbing 130 points to 14,125. The CAC, meanwhile, is back above 5,700, a price last seen in February 2020.
The Eurozone indices benefited from the euro dropping against dollar and pound alike, even as both French and German industrial production readings beat estimates.
Like the DAX, the Dow Jones is regularly hitting fresh highs, surging past 31,100 on Thursday evening. And it is heading for a 120 point rise this afternoon.
Yet those gains are maybe a tad premature. Between now and the US open sits the first nonfarm jobs report of the year – well, technically final set of figures from 2020 – and it’s not looking good.
Analysts are expecting a mere 60,000 jobs to have been added across December – a weak number at any point in time, not only during a pandemic, and already down from previous forecasts of 65k. And that is potentially the best case scenario – the ADP (NASDAQ:ADP) nonfarm reading was expected to hit similar levels, only to show that 123,000 jobs were lost during the final month of last year.
On top of that the unemployment rate is set to creep up from 6.7% to 6.8% – the first month-on-month increase since that huge leap between March and April. It is worth noting, however, that the figure is on an 8-month streak of better than expected readings.
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