The FTSE 100 was weaker on Monday as investors once again felt the pressure of interest rate hikes and UK house price data knocked the FTSE 100’s housebuilders.

The FTSE 100 was down 0.45% to 7,531 at the time of writing.

Another robust US jobs report released on Friday showed average wage growth was still running hot in July suggesting the Federal Reserve will continue to increase interest rates to control inflation. US stocks fell on Friday and Asia started the week in the red as a result.

European shares were set for a weaker start on Monday and the FTSE 100’s decline was exacerbated by downbeat house price data released by Halifax. Halifax said UK house prices had fallen 2.4% in the year to July.

“The big move higher in UK rates continues to have a dampening effect on the UK housing market. Figures from Halifax unsurprisingly showed a fourth straight month of declining prices. With mortgages becoming less affordable it is proving increasingly difficult for people to get a leg up on the property ladder or even join the ladder in the first place,” said AJ Bell investment director Russ Mould.

“Housebuilder Taylor Wimpey was among the top fallers on the FTSE 100 this morning. The sector faces a very different environment today after years of strong property prices, cheap mortgages and state support for first-time buyers.”

UK equity bulls had little to get excited about on Monday with few stocks making convincing gains. Rolls Royce was the top riser, gaining 1%, as the engineering firm continued its monumental rally.

Against the backdrop of Clinton Cards talking about going into administration it was a very pleasant surprise for investors in Card Factory (LON:CARD) to see the positivity in today’s Trading Update.

Its shares have opened 16.5% higher at 103.5p.

The £304m capitalised group, which is the UK’s leading specialist retailer of greetings cards, gifts and celebration essentials, reported that trading in the first half to end July was materially ahead of Board expectations.

That is even more impressive when the group states that the macro-economic environment continues to be uncertain, despite which it is expecting that the second half year to end January 2024 will show its strong performance continuing to result in far better than the market’s estimates.

Competitor Clinton Cards has been recently reported to be looking to close around a fifth of its stores in order to stave off insolvency.

Trade publisher Retail Gazette has mentioned that part of Clintons plans could see it close 38 stores., on top of the 156 shops it closed back in December 2019 as part of a pre-pack administration, when its previous owner, the Weiss family that owns US giant American Greetings, snapped it back up.

The Wakefield-based Card Factory, which now turns over nearly £10m each week, started its operations way back in 1997 with just one shop, has expanded mainly through its organic growth into now having a nationwide presence.

The group now has over 8,800 employees and has around 1,020 stores in the UK and Ireland.

The UK market for greetings cards is some £1.4bn a year.

Estimates exist for the group to make around £51.5m pre-tax in the current year on the back of some £500m sales, worth 11p in earnings per share.

Next year estimates suggest £532m revenues and £56.1m profits and 12p earnings.

The company’s shares bottomed out in late August last year, down to 40.40p, and peaked at 114.80p in early May this year.

The average consensus view from the four analysts that follow the group is that the shares will go at 126p in due course.

This morning they have opened at 103.5p, up 16.5%.

Beacon Energy shares jumped on Monday after providing an update on its drilling operations for the Schwarzbach-2(2.) well in the Erfelden field in Germany.

The company is currently drilling a deviated sidetrack of the well, which is part of the development of the Stockstadt Mitte segment of the Erfelden field.

Beacon Energy shares were 11% higher at the time of writing.

The primary objectives of the Schwarzbach-2(2.) well are to test reservoir targets and Beacon expects to reach total depth (TD) in the coming days. Once drilling is completed, the company will conduct testing to determine if the well can produce commercial quantities of oil and gas.

The drilling results will provide important information on the productivity potential of this section of the Erfelden field, which is a key asset for Beacon Energy in Germany.

Beacon Energy shares were readmitted to AIM in April this year after completing the reverse takeover of Rhein Petroleum.

Tern (LON: TERN) soared 127% to 8.5p when it announced on Friday that investee company Wyld Networks is exploring potential areas of collaboration with SpaceX. Tern owns 27% of Wyld Networks.

Orcadian Energy (LON: ORCA) shares gained upward momentum during the week. On Wednesday it said that it did not know why the share price is increasing and pointed out more cash will need to be raised. The supportive news from the government about the North Sea oil sector has attracted investors to Orcadian Energy. There are discussions with potential partners for the Pilot project or it is possible that it will be sold outright. The share price jumped 96% to 4.9p.

Scirocco Energy (LON: SCIR) is near to completing the disposal of its interest in the Ruvuma project in Tanzania. The tax liability has been assessed as $150,000. The licence will eventually be transferred to ARA Petroleum. A payment of $2.5m will be received on completion. A further $13m is payable depending on achieving targets and a revenue share on production. The share price increased 64.3% to 0.575p.

Former ITM Power (LON: ITM) boss Dr Graham Cooley has increased his stake in Light Science Technologies (LON: LST) from 3.3% to 4.8%. The share price recovered 36.8% to 2.12p.

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Fallers

Deltex Medical Group (LON: DEMG) returned from suspension on Wednesday and fell to a new low of 0.21p before ending the week down 79.2% to 0.25p. The blood circulation monitoring devices developer raised £1.9m at 0.2p/share. The focus is on creating recurring revenues and marketing the company’s new monitor. There will also be cost cutting to reduce the cash outflow.

Aptamer Group (LON: APTA) is raising £3.6m at 1p/share to provide working capital to cover losses. The share price slumped 52.6% to 2.25p. The annual costs will be reduced from £6.4m to £3.5m. Cash breakeven is anticipated in the year to June 2025. Four directors have resigned, and four new directors appointed, including the return to the board of former chief executive Dr Arron Tolley. Dr David Bunka will switch to chief scientific officer on lower pay. A new chief executive will be appointed. The formal sale process has been ended.

Supercapacitor supplier Cap-XX (LON: CPX) has been hit by shipping delays and it expects 2022-23 revenues to decline by 29% to £2.1m. The share price slumped 42.6% to 1.35p, which follows a recent recovery in the share price.

Phil Terry has taken a 3.14% shareholding in cash shell Itsarm (LON: ITS). The share price dipped 41.3% to 1.85p after the previous week’s jump, but it remains a multiple of its level two weeks ago.

The FTSE 100 reversed early losses on Friday as markets attempted to balance upbeat results from tech giant Amazon and the lower than expected Non-Farm Payrolls report released on Friday.

WPP shares sank after lowering their guidance for the year, and Rolls Royce shares logged more flying hours, gaining another 5% on Friday. Rolls Royce shares are up 117% year-to-date.

Non-Farm Payrolls

The Non-Farm Payrolls report is the financial market’s most highly anticipated economic data point. It provides an up-to-date insight into the US jobs market and is positively correlated with the growth of the world’s largest economy.

In July, the US added 187,000 jobs, lower than the predicted 200,000 jobs.

S&P 500 futures ticked higher after the announcement, and the FTSE 100 bounced from the worst levels of the session, London’s leading index was trading 0.1% higher at the time of writing.

Missing jobs expectations is typically a bearish signal for stock markets, but we are in a climate where bad news for the US economy is perceived as good news for the next move by the Federal Reserve and stocks. A slower US economy would warrant pausing rate hikes and fire up equity bulls.

In addition, many are looking for a soft landing in the US economy which would be evident in a steady reduction in the number of jobs created, as opposed to a hard landing and a sharp decline in job creation.

FTSE 100 movers

Investors dumped WPP shares on Friday after the advertising giant said US technology companies held back on spending in the last quarter.

“UK advertising giant WPP has downgraded full year like-for-like revenue guidance to 1.5% – 3.0%, from 3.0% – 5.0%. Technology spending, especially in the US, has slowed, leading to a dent in performance from the group’s substantial integrated creative agencies,” said Sophie Lund-Yates, lead equity analyst at Hargreaves Lansdown.

“This outcome is unwelcome but not wholly surprising, given that corporations are in wait-and-see mode when it comes to splashing the cash and handing margin over, at a time when demand is very tough to profile.

“While demand for WPP’s suite of services hasn’t been totally washed out, it has faded this half, and investors will be wanting to see a clear path to return to full colour. Harnessing AI correctly, and swiftly, could be one way to propel large amounts of growth, but change of this magnitude always comes with risk.”

WPP shares were down over 6% at the time of writing.

Rolls Royce shares were logging more flying hours as the engine-maker continued the ascent from yesterday’s release of their half-year report. Rolls Royce is seeing early success in their transformation strategy with improved free cash flow and upgraded guidance for the full year. Rolls Royce shares were up 5% on Friday and are the FTSE 100’s top performer in 2023, gaining 117%.