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Europe Bubbly, FTSE Held Back By DS Smith, Dow Jones Prepares For Nonfarm Thursday

Published 02/07/2020, 12:13
Updated 21/10/2020, 09:15

Anticipating a very interesting nonfarm jobs report, and still riding high on the Pfizer/BioNTech vaccine news, Europe strode forth on Thursday.

The DAX continued to lead the pack, a 1.8% increase keeping it within touching distance of 12500. The CAC was only a smidge behind, the French index’s 1.6% push leaving it just shy of 5000.

The FTSE was unable to keep pace with its Eurozone rivals, posting a comparatively disappointing 0.7% rise. That’s in part because of a 9% slide from DS Smith (LON:SMDS), the company announcing it is cancelling its dividend despite annual pre-tax profit jumping from £350 million to £368 million year-on-year, following an Amazon-led surge in packaging-heavy home deliveries. DS Smith blamed ‘macroeconomic uncertainty’ for the dividend decision, claiming it would be ‘premature’ to continue payments at this time.

Looking to this afternoon and the Dow Jones is heading for a 220 point increase – though that could well change dependent on how the day’s data pans out.

The headline nonfarm figure – coming a day early due to tomorrow’s US bank holiday – is set to show a further 3.037 million jobs were created in June, hot on the heels of May’s 2.509 million comeback. Investors will not only be paying close attention to the latest reading, but whether last month’s number undergoes any major revisions.

The unemployment rate, meanwhile, is set to drop from 13.3% to 12.4% – way off the 19.4% initial forecast for May. As for wage growth, that’s expected to improve slightly, from -1.0% to -0.8%.

There’s also the usual Thursday jobless claims reading, which have been lurking around the 1.5 million mark for the last few weeks. Analysts are estimating that another 1.35 million Americans filed for unemployment for the 7 day period ending June 27th.

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