Miners weigh on the FTSE 100

Rate hike fears took hold of British investors last week. They saw every bit of good economic data in the US as a sign that he Fed would turn more hawkish to cool down inflation and the economy. The labor market is still very tight in America. Indicators published on Friday showed the unemployment rate dropped to 3.6% last month, which is lower than the 3.7% expected.

However, payrolls increased by 209,000 instead of the 230,000 expected, which eased worries a bit. But average hourly earnings for all employees on private nonfarm payrolls rose by 12 cents, or 0.4 percent, to $33.58. Over the past 12 months, average hourly earnings have increased by 4.4 percent. The FTSE 100 fell 0.3% on Friday and 3.6% for the week.

This morning, the blue-chip index was struggling to bounce back, inching up 0.1%, hampered by mining stocks due to concerns about Chinese growth after a set of disappointing data.

Real estate companies were also underperforming after HSBC published a bearish note on the sector.

In other news, Thames Water announced that its shareholders have agreed to inject a new funding of £750 million. The company is in trouble, with a debt reaching $14 billion and crumbling infrastructure.

Investors will be watching tonight Chancellor Jeremy Hunt’s Mansion House speech this evening, as he’s due to unveil several reforms to boost the attractiveness of the City.

 

Things to read today:

Financial storm bears down on US commercial real estate (Financial Times)

Labour’s plan will not transform Britain’s poor economic prospects (Financial Times)

Five Ways the Bull Market Makes Investors Nervous (WSJ)