Market Report – FTSE 100 up ahead of key US jobs data
- FTSE 100 recoups some losses as US jobs report due
- Anglo American eyes up production cuts to lower costs next year
- Spotify CFO stepping down amid sweeping job cuts
- Brent crude on track for weekly losses as demand outlook weakens and despite supply cuts
Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown:
“The FTSE 100 has recouped some losses as the market holds its breath ahead of the US non-farm payroll report. The data will help set the tone for next week’s Federal Reserve meeting, with growing hope that the US is ready to keep the pause button pressed on interest rate increases. A slowing jobs market would help cement this enthusiasm.
Mining giant Anglo American is taking the secateurs to its costs, and it plans to reduce expenditure by another $500m next year. The huge increase in the existing plan comes as production from its extensive Copper, iron, platinum and other commodities will be lower than previously thought. Miners are at the mercy of cyclical material costs, and the wheel has been turning against new CEO Duncan Wanblad – with issues compounded by operational headaches too. Anglo’s overall position continues to be strengthened by its exposure to consumer products, meaning it’s partially protected from the worst of industrial slumps, but there is clearly work to be done to keep the ship in good order over the next twelve months.
Members of Spotify’s senior leadership team are the latest to go, including the CFO. The media company has announced sweeping job cuts in recent days, with 1,500 roles affected. The desire for a deep rooted organisational reset is clearly a priority, with the search for a new CFO on the go. Spotify has been peddling incredibly hard to diversify its offerings, including expanding podcasts and audiobooks – to great expense. The issue is, these efforts aren’t yet paying dividends and the group needs to keep the funnel topped up with new subscribers if it’s to prosper. At least some of the job cuts have come from podcast sales, suggesting a row back to more traditional content could be on the cards.
Brent crude is set for around a 5% weekly decline, with the price hovering at $75.50 a barrel. There are mounting concerns about the outlook for Chinese demand, which is more than offsetting planned production cuts. Adding to over supply concerns is the fact that US gasoline inventories jumped by 5.4m barrels last week, much higher than forecasts of 1m barrels.”
