Investment market update
UK stocks are expected to open higher this morning as they react positively to weaker than expected US jobs data, reducing the likelihood of a rate rise.
Global markets across the board were up on Friday and overnight, after weaker than expected US jobs data, announced on Friday, undermines the case for the Federal Reserve to raise interest rates. Gains in the US were led by energy and raw material companies. Elsewhere, Pfizer Inc. and Chevron Corp. climbed more than 3.8%, while Caterpillar Inc. added 2% with the profitability of those companies benefitting from the weaker dollar. In the UK, gold miners rallied as the price of the precious metal climbed, with Randgold Resources Ltd. and Fresnillo Plc up at least 4.2%. Experian Plc slid 3.8% after saying hackers gained access to a database run by the company.
The government is set to press ahead with plans for a retail offer of shares in Lloyds Banking Group, after putting plans on ice over the summer of 2014 due to volatile market conditions. The government plans to offload at least £2bn of shares to retail investors, with all proceeds used ‘to pay down the national debt”. Members of the public will be offered a discount of 5% of the market price, with a bonus share for every 10 shares for those who hold their investment for more than a year.
Sweden’s Skandia Fonder is evaluating its Volkswagen stake as the emissions crisis prompts a growing number of investors to step back from the German carmaker. The minority shareholder also signalled it might be open to investing separately in Scania, a Swedish truck maker that was the target of a hostile takeover by VW last year, should the scandal result in a divestment of the unit.
Federal Reserve Bank of Boston President Eric Rosengren said the US economy needs to be growing at a 2% pace in the second half of the year to justify an interest rate increase by December. The slower rate of job gains in September and weaker exports validated the Federal Open Market Committee’s concerns about international growth when it decided not to raise interest rates at its September meeting, Rosengren said.