London pre-open: Stocks to rise as investors eye payrolls report

(Sharecast News) - London stocks were set to rise at the open on Friday following heavy losses in the previous session, when bond markets sold off amid inflation fears, as investors turned their attention to the latest US non-farm payrolls report.

The FTSE 100 was called to open around 30 points higher, having ended down 1.7% on Thursday after the 30-year gilt yield hit 6% for the first time since 1998, and as oil prices surged.

Oil prices had eased early on Friday and at 0710 BST, Brent crude was trading down 0.1% at $102.20 a barrel and West Texas Intermediate was 0.3% lower at $93.60.

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

Danske Bank expects 100,000 jobs to have been added in September and for the unemployment rate to have ticked down to 4.0% from 4.1%.

"We think that the labour market is heating up despite a softer-than-expected JOLTS report on Tuesday," it said.

"Other employment indicators, such as ADP's weekly pulse and the PMI employment index, have been strong pointing to solid September job growth. Unemployment claims being at their lowest level since 2023, low labour market participation rate, and high job growth all support a further drop in unemployment."

Kathleen Brooks, research director at XTB, said some analysts think that payrolls could surprise on the downside because the 162,000 reading for August was down to seasonal factors that may have been erased last month.

"Due to monthly revisions in the payrolls data, the focus could shift to the wage data," she said. "While the Fed could look through another month of hot jobs growth, if we get stronger signs of wage pressures building, this will be harder for the Fed to ignore."

On the corporate front, JD Wetherspoon reported a slump in annual profits, weighed down by higher costs.

The pub chain saw revenues rise 5.2% in the 52 weeks to 26 July, to £2.24bn, or by 4.2% on a like-for-like basis. However, pre-tax profits before separately disclosed items slid 28% to £58.6m following a 5.3% spike in costs, including wages, repairs and business rates.

Looking to current trading, and Wetherspoons said underlying sales had jumped in the nine weeks to 27 September by 8.6%, including a 7.7% uplift in August, on the back of the unusually warm summer weather.

Low cost airline Wizz Air said it carried 7.78 million passengers in September, an increase of 24.2% year-on-year, with capacity rising 25.3% to 8.46 million seats.

The load factor for the month was 92.0%, down 0.8 percentage points year-on-year, although this in part reflected a stronger pricing environment, with a notable improvement seen in the month compared to earlier periods, the carrier said.