The first of two major US unemployment indicators were released yesterday, along with the minutes from the Federal Reserve meeting. Yesterday's figures revealed that more jobs had been created in the US markets, with today's non-farm payroll showing how many individuals in the US are actually out of work. Whilst low unemployment is great for society, full employment drives wages, spending, and in turn, inflation – something that’s less desirable for the economy. As a result, markets were down, in fear of further interest rate hikes to come.
Oil and natural gas giant, Shell, has warned of a drop in their second quarter trading figures. The natural gas arm of their business, which drives up to 25% of their profits, is what seems to be really letting them down. Some of this could be seasonal, as generally in warmer months, we don’t need as much natural gas to heat our homes. It could also be due to field maintenance. Either way, the share price is likely to look less rosy off the back of the news and the hopes of hefty windfall taxes may dwindle for the UK government.
Currys, a UK-based electronics company, fell over 9% in trading yesterday after announcing a cut to their dividends. The move was made to plug the growing gap in their books, essentially caused by some strains showing in the Nordic side of their business. The Scandinavian arm is struggling to outweigh local competitors, whilst the UK and Ireland business is surprisingly strong (despite the issues of the cost of living crisis). Whilst the cut to the dividend won’t be popular in the short term, it’s hoped that it can recover some much needed cash for longer term gains.
Sources: AJ Bell, IG, Bloomberg, BBC, Yahoo Finance