Stocks slide towards the close as the US jobs data provided traders with not one but two reasons to sell; the non-farm payrolls missed expectations, while the unemployment figure beat estimates.
The London market got off to a good start this morning when the FTSE 100 opened just shy of the 6700 mark, but despite a huge jump in UK construction PMI traders cashed in their chips ahead of the lunchtime update from the US. The positive ADP and jobless claims from the US earlier this week set the mood for today’s report. The lower-than-forecasted headline figure pushed stocks further into the red and the realisation that unemployment dropped triggered tapering fears.
US equities are holding up relatively well considering they reached all-time highs last night, and it is no secret that the Federal Reserve will curtail their bond-buying scheme once unemployment falls to a more acceptable level. It is now sitting at 7.4% and 6% is their target. Facebook, the prodigal son, has returned to its IPO price; the social media giant is back in favour with investors ever since is reported a massive jump in advertising revenue last week.
Copper appears to be hitting resistance around the 318 cents per pound mark. The red metal has come under pressure as declining Chinese manufacturing levels have got traders worried about demand. Gold received a boost from payroll figures as traders happily flew to the safe haven of the precious metal.
The pound, euro and yen have all made gains versus the US dollar on the back of the non-farms report. The Australian dollar is just above the 89c mark as traders are pricing in a 50:50 change of a rate cut from the Reserve Bank of Australia next week.