The FTSE 100 gained on Friday after stronger-than-expected Non-Farm Payrolls painted a resilient picture of the US economy.

The US economy added 199,000 jobs in November, exceeding economist forecasts of 185,000. The unemployment rate came in at 3.7% compared to estimates of 3.9%.

The conundrum for markets is the jobs report doesn’t support the argument that the Federal Reserve will cut rates in early 2024, but at the same time, it doesn’t support further interest rate hikes.

The FTSE 100 was up 0.5% at the time of writing and will likely remain choppy for the rest of the session. US stocks whipsawed and promised volatility going into the weekend as investors assessed the implications for central bank meetings next week.

The jobs report will influence the Federal Reserve’s thinking on rates and may dictate a more hawkish tone than equity bulls would like.

Anglo American

Anglo American was the FTSE 100’s top faller after the miner said it planned to cut production in the coming years to conserve cash. Mining investors never want to hear about production cuts, and Anglo shares sank over 14% on Friday.

“Mining giant Anglo American is taking the secateurs to its costs, and it plans to reduce expenditure by another $500m next year. The huge increase in the existing plan comes as production from its extensive Copper, iron, platinum, and other commodities will be lower than previously thought,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“Miners are at the mercy of cyclical material costs, and the wheel has been turning against new CEO Duncan Wanblad – with issues compounded by operational headaches too.”

Despite the destruction of Anglo American shares on Friday, the losses were limited mainly to Anglo, with only minor losses in Rio Tinto. Indeed, copper miner Antofagasta was the FTSE 100’s top riser, and Glencore edged higher.

Housebuilder Berkeley Group was among the fallers as investors booked profits after the company released reasonably respectable half-year earnings.

Berkeley Group shares dipped on Friday after the housebuilder said sales volumes had fallen in the six months to 31st October. Yet, the company produced higher profit before tax than in the same period a year ago.

The news encouraged investors to book profit in the FTSE 100 homebuilder after a 20% rally from October lows. Berkeley Group shares were down 2.1% to 4,836p at the time of writing.

Berkeley said the ‘market lacks urgency’ and their sales rates were around a third lower in the half year compared to the prior financial year. The cash due for forward sales declined to £1,964m as of 31st October from £2,136m 30th April 2023.

Despite falling sales volumes, Berkeley Group’s profit before tax rose 4.6% to £298m in the period. The company said it had achieved £10m in operating cost savings and was starting to see build cost inflation stabilise.

Rising profit for a housebuilder is a rarity in 2023 and it will put Berkeley Group in good stead when interest rates are eventually cut and mortgage rates ease.

“Berkeley Group is sitting on some solid foundations, allowing it to weather the cyclical nature of the housing market,” said Aarin Chiekrie, equity analyst at Hargreaves Lansdown.

“High mortgage costs are causing a relative lack of urgency amongst potential buyers, and that’s seen Berkeley’s sales rates fall in the first half, in line with wider trends across the sector.”

“But with Berkeley, there’s scope to outperform its peers on this front in the new year. Domestic and international demand in the key London market is likely to remain more robust than in other areas of the country, and the housing supply shortage doesn’t look to be going anywhere soon. The tight supply of homes on the market and the group’s higher-end product, with higher average selling prices of around £624,000, are helping to offset lower sales volumes.”