London pre-open: Stocks seen down ahead of payrolls

London stocks were set for a weaker open on Friday as investors eyed the release of the latest all-important US non-farm payrolls report.

The FTSE 100 was called to open 39 points lower at 7,684.

The payrolls report for December is due out at 1330 GMT, along with the unemployment rate and average earnings. Before that, the S&P Global/CIPS December construction PMI for the UK is out at 0930 GMT.

CMC Markets analyst Michael Hewson said: "Today attention turns to the December payrolls report. The November’s payrolls report saw a decent improvement on the October report, with 199k jobs added, while the unemployment rate slipped to 3.7%.

"With the participation rate returning to 62.8% and wages remaining at 4%, the idea that the Federal Reserve could look at cutting rates as early as March comes across as fanciful in the extreme. Weekly jobless claims are also trending in the low 200k’s and just before Christmas US Q3 GDP was confirmed at 5.2%.

"It is true that US jobs growth has been slowing in recent months, with the ADP payrolls report slipping to 101k in November despite yesterday’s rebound to 164k this week, however that is quite normal after such a long economic expansion. We’ve also seen improvements in recent manufacturing and services survey data which has shown that economic activity has been holding up reasonably well, and in some cases has been improving.

"For today’s December payrolls report expectations are for 171k jobs to be added and for the unemployment rate to nudge higher to 3.8%."

On home shores, data out earlier showed that British shoppers headed out more reluctantly during the usually busy holiday period, with retail footfall seeing a notable decline.

According to BRC-Sensormatic IQ, total UK footfall saw a 5% year-on-year decrease from 26 November to 30 December - a marked decline from November's -0.7% year-on-year change.

High street footfall saw a 4.2% drop in December compared to the same month the prior year, with November reporting a more modest -1.7% change.

Retail parks saw a 4.8% fall in footfall in December, a significant drop compared to the -1.0% change recorded in November.

However, shopping centres were hit the hardest with a substantial 7.4% decline in footfall in December, marking a notable drop from November's -2.2% change.

"December's heavy rain left many shoppers reluctant to brave the elements, who instead opted to browse online before making final purchases, or shop online altogether," said British Retail Consortium chief executive officer Helen Dickinson.

"This led to a substantial decline in footfall levels compared to December 2022, when there was significant pent-up demand for in-store shopping post-Covid restrictions.

"Some cities, such as Edinburgh, bucked the trend, and saw footfall levels rise in December thanks to recent investment in new, exciting shopping destinations."

Investors were also mulling the latest figures from Halifax, which showed that house prices rose again in December as mortgage rates fell.

House prices picked up 1.1% on the month following a 0.6% increase in November. This marked the third monthly jump in a row following six consecutive declines, and left the average price of a home at £287,105.

On the year, house prices rose 1.7% in December following a 0.8% decline the month before.

In corporate news, shipping services provider Clarkson lifted annual guidance after strong trading during the final quarter of 2023 driven by its broking division.

Underlying profit before tax was now expected to be at least £108m for the 12 months to December 31, the company said in a short trading update.