London pre-open: Stocks to edge down ahead of payrolls

(Sharecast News) - London stocks were set to edge down at the open on Friday as investors eye the latest US non-farm payrolls report. The FTSE 100 was called to open 12 points lower at 7,177.

CMC Markets analyst Michael Hewson said: "Asia markets also saw decent gains; however, the shooting of former Prime Minister Shinzo Abe has seen the Nikkei 225 give up some of those gains, with his condition currently unknown. This late in the day weakness is set to translate into a mixed European open.

"In the last week or so we've seen increasing evidence of US economic weaking in the latest ISM reports from June. In the manufacturing sector the ISM employment component slipped further below 50 to 47.3 and the lowest since August 2020. It was a similar story in the services sector which also saw similar weakness.

"It was notable that ADP slowed to 128k in May, the weakest number since December 2020, and with these reports not due to return until August while the calculation is readjusted it's not immediately clear which jobs report accurately reflects how the US labour market is doing.

"If the US labour market continues to hold up well, we could well be looking at a Fed funds rate that could double by the end of Q3, however the inflation numbers next week could undermine that narrative.

"Weekly jobless claims have been slowly rising over the last few weeks, while the latest June payrolls is expected to see jobs growth slow from 390k in May to 265k, a number that has come down from where it was two weeks ago and remains at a sizable risk of a miss to the downside."

The payrolls report is due at 1330 BST, along with average earnings and the unemployment rate.

In corporate news, housebuilder Vistry said it expected price rises to drive margins above full year targets after a first half driven by strong demand.

The company added that it continued to expect adjusted annual pre-tax profit to be at the top end of market forecasts of £417m.

Sports and fashion retailer JD Sports tapped Andy Higginson to take over as chairman of the group following an extensive search process.

JD Sports said that Higginson, the former chair of William Morrison Supermarkets, will take up the role on 11 July.