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FTSE 100 in the red after Non-Farm Payrolls beat expectations, DS Smith jumps

The FTSE 100 traded negatively as the week drew to a close on Friday after Non-Farm Payrolls beat expectations, suggesting the Federal Reserve was on track to cut rates in the summer.

London’s leading index closed down 0.42% but was well off the worst levels of the session as traders reacted to a jobs report that supported the measured decreases in borrowing rates and the US ‘soft-landing’.

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The headline Non-Farm payrolls jobs added came in at 275,000 vs 200,000 expected – another decent gain in jobs. However, the unemployment rate rose and wages were softer than anticipated suggesting some vulnerabilities to the labor market.

“The February jobs report painted a mixed picture of the US labour market, with headline nonfarm payrolls growth smashing expectations once more, albeit being accompanied by disappointing details on unemployment and earnings, sparking a dovish market reaction, and cementing expectations that the FOMC will begin the easing cycle in June,” said Michael Brown Market Analyst at Pepperstone

DS Smith

DS Smith was the FTSE 100’s top gainer after agreeing on a merger with Mondi to create one of Europe’s leading packaging firms.

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Under the proposed deal, Mondi shareholders would own 54% and DS Smith shareholders 46% of the combined entity, valuing DS Smith at 373p. DS Smith shares were 5.4% higher at 342p at the time of writing.

“The groups say they can see substantial synergies from combining operations, but bizarrely at such a late stage in a deal’s progression, they have not yet quantified these synergies,” said Steve Clayton, head of equity funds, Hargreaves Lansdown.

“That will come later, and in the meantime investors in both companies are left to figure out if they are going to be sufficient to merit DS Smith investors giving up control of the group and Mondi investors roughly halving their exposure to the assets they currently own.”

Informa

Informa has had a strong start to the year, with revenue coming in higher than analyst consensus estimates due to further growth in the India, Middle East, and Africa region.

The group’s events businesses were heavily hit during the pandemic and the subsequent inflationary cycle has done the group no favours. 

That said, the group’s recovery over the past year has been material, and investors should be pleased. The strongest segment was the live events business with revenues in the region of £3bn in 2023 – a major improvement on 2022. Such was the strength in the B2B live events segment last year, the company returned around £700m to shareholders through dividends and share buybacks in 2023.

HSBC’s Global Research team has a 975p price target for Informa, compared to Friday’s price of 808p.

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