Equity markets rally into the weekend as non-farm figures loom

Equity markets rally into the weekend as non-farm figures loom.

- A Chinese bank holiday helps Asian markets stay calm

- Food retailers drive FTSE higher over the week

- Glencore and Volkswagen remain clouds on the horizon

Two days into the last quarter of the year and markets are already set to face their first hurdle, this afternoon will see the US release the latest non-farm payroll figures. These figures will rightly get the headlines, however recent speeches from Fed chair Janet Yellen and a number of FOMC voting members have highlighted the importance they are giving to Average Hourly Earnings in their decision making with regards to interest rate rises. With China enjoying its second day of a long weekend bank holiday, there has been less opportunity for Asian markets to become de-railed. Mounting expectations that increased assistance will be given to Chinese consumers looking for financing for either properties or automobiles has certainly given a bounce to optimism. This might not be the strong ‘whatever it takes’ stance advocated by the ECB, but it is certainly proactive enough to ease fears.

Volatility has certainly returned to equity markets with several sectors acting as catalysts. A look at the big weekly movers in the FTSE shows four out of five stocks that have risen the most coming from the food retailers, following the release of Sainsbury’s quarterly figures at the beginning of the week. Considering this ‘victory’ is based around them holding onto rather than improving market share, it might be a little early to start popping any of those discount cava bottles just yet. Miners and car manufacturers, with Glencore and Volkswagen being the focus, have also seen a bounce over the week. However, in both instances the worries over contagion and an inability to believe there are no more problems yet to be unearthed should ensure an absence of over exuberance from traders. We are expecting the Dow Jones to open 60 points higher from Thursday’s close at 16,284.