Proactive Investors -
- FTSE 100 down 40 points at 8,242
- Weak US jobs data hits stocks
- British Airways (LON:ICAG) owner revives its dividend
US jobs data hits global stocks
The FTSE 100 was among global indexes to take a battering after US non-farm payroll data, falling 40 points to 8,242.
In the US, the Dow Jones was down 546 points at 39,968 ahead of Friday’s opening bell, while the Nasdaq and S&P 500 fell 463 and 99 points respectively.
Non-farm payroll data from the Bureau of Labour Statistics on Friday showed 114,000 jobs were added to the US economy in July - far off expectations for 175,000.
Unemployment also rose over the month to 4.3%, climbing to its highest level since October 2021.
“Since inflation figures have come into shooting distance of the Fed’s target, [...] the balance of risks has begun to change,” Charles Schwab (NYSE:SCHW) director Richard Flynn commented.
“Today’s figures may stir anxieties that central bankers haven’t moved fast enough to cut rates, nudging the jobs market into a downward spiral.”
Japan’s benchmark Nikkei 225 index had already taken a beating ahead of the data’s release, closing 2,216 points lower at 35,909 on Friday, while markets across Europe also fell into the red on the news.
US economy adds fewer jobs than expected in July
A below-expected 114,000 jobs were added to the US economy in July as the unemployment rate rose to 4.3%.
Expectations were for the US economy to have added a far healthier 175,000 jobs, according to a Reuters poll.
The Bureau of Labour Statistic data comes as fears grow that the Federal Reserve's efforts to stem inflation by holding interest rates this week could put the US at risk of recession.
At 4.3%, unemployment across the US has reached its highest since October 2021, with the addition of non-farm payroll data showing the slimmest growth since April this year.
More Wizz Air woes
Wizz Air (LON:WIZZ) Holdings PLC's bad week continued on Friday as it shed another 5% after the budget airline revealed passenger numbers fell in July while its carbon emissions went up.
It follows a beating for its share price yesterday on a profit warning with interim results that followed it being rated the worst airline for customer service by consumer group Which?
Wizz carried 5.94 million passengers in July, down 1.4% from a year earlier with its load factor or how full its planes are, also down 1% at 93.8%.
The central Europe-based airline has been hamstrung by problems with engines supplied by the GTF consortium, which caused a grounding of its A321neo fleet, while the Crowdstrike/Microsoft IT outage on 19 July disrupted 1% of its scheduled flights.
Carbon emissions also rose in July due to the engine issue with Wizz Air having to use what it said was a suboptimal fleet mix or older and lower gauge aircraft.
Nintendo profits drop with no Switch successor announced
Nintendo shares dropped more than 2% in Tokyo overnight after it revealed profits had dropped by 55% in the three months to June.
With no information imparted regarding a successor to the Switch, Nintendo said sales had fallen in both its game software and machines divisions.
The Switch console has been on the market for eight years now, with the Japenese video game developer having sold around 140 million in that time.
However, attention is now turning to the next generation, with Nintendo's president Shuntaro Furukawa having promised an announcement would be made on the new console by April 2025.
Profits for the Super Mario maker reached 81 billion yen (£427 million) for the quarter, marking a 181 bilion yen drop compared to 2023.
Quarterly sales dropped by over 45% to 246.6 billion yen for the period.
Capita shares tumble
In the world of small caps, business outsourcing expert Capita has sunk 6.5% as its first-half profits were overshadowed by its need to cut costs and further contract losses.
Capita reported it was on track to save £160 million by June next year in its interims.
These results showed pre-tax profits of £60 million for the six months to June, against a £68 million loss last year, though this was aided by a £38.1 million boost from business sales.
Lower bidding activity saw Capita’s total value of contracts won over the half-year fall by 29% to £934.4 million.
Revenue also fell, by 16% to £1.2 billion, which Capita said in part reflected previously announced contract losses.
“We are implementing changes that will make us more competitive and drive growth by becoming more efficient and spending less,” chief executive Adolfo Hernandez commented.