Market Wrap

Market Wrap: US job openings soar to record high, while EasyJet shares fall after failed takeover bid

Annie Charalambous, Friday, 10 September 2021

Estimated reading time: 6 minutes

ETX Capital Market Wrap

US employers struggle to hire workers as job openings rise to a record high, and EasyJet insists it’s on the path to pandemic recovery.

JOLTs data at a record 10.9 million job openings

After disappointing nonfarm payroll data (August), the US Bureau of Labor Statistics published its latest Job Openings and Labor Turnover survey results this week (for July), recording 10.9 million vacancies in the US.

While both hires and separations (lay-offs, discharges, quits, etc.) remained mostly unchanged, job openings hit the fifth consecutive series record (in the 20 years the data has been recorded), up by 749k jobs, or 6.9%.

Joltsdata
Source: https://uk.investing.com/economic-calendar/jolts-job-openings-1057

The health care and social assistance sector saw the largest increase (+294k openings), followed by finance and insurance (with +116k openings), and accommodation and food services logging a close third, at +115k openings. Medium-sized businesses (employing between 50-249 people) accounted for the biggest surge in openings, while larger companies’ (with 5,000+ employees) rate fell from the previous month. Hiring did fall slightly, from a rate of 4.7% to 4.5%, with retail being the hardest hit (with -277k job openings in July). What this points to is that there isn’t a shortage of jobs, but a lack of people, further evidenced by the rise in willing separations (quits) – of the 5.8 million separations logged over July, 4 million were quits.

EasyJet announces £1.2 billion fundraiser and rejected takeover

EasyJet shares plummeted over 10% Thursday after news of an ‘unsolicited’ takeover bid from an unnamed competitor, rejected by the company’s board. While it’s not confirmed, it is widely rumoured the bid came from Hungarian airline, Wizz Air, which is now worth more in market cap.

$WIZZ is up over 38% over the last 12 months, and worth just under £5 billion, compared to a modest 17% gain for $EZJ over the same period, and a market cap of £3.17 billion.

The company also announced it was seeking to raise £1.2 billion from shareholders to aid in their post-pandemic recovery plan, adding in the investors’ note that they were “well‐placed to emerge from the pandemic with renewed strength”. The funds will be put towards structural advantages, i.e., taking up more space in primary airports across Europe; expanding on easyJet Holidays, and investing in sustainability with a “new-generation aircraft” to reduce its carbon footprint.

EasyJet lost over £2 billion last year from grounded flights, marking the first loss on record for the company in its 25 years.

Movers and shakers

🔼 Apple (AAPL) gained almost 2% Tuesday, hitting a new all-time intraday high. The company announced its Apple Event for September 14th. Check out Forbes for expected products

🔽 Coty Inc. (COTY) fell 8% in Wednesday’s session after announcing a secondary offering of Class A common stock this week. Read more on MarketWatch

Stock of the week 🚲

Peloton Interactive launched its own apparel line this week, called... Peloton Apparel. Catchy! As a result, shares are up over 5.5% today and almost 17% since Thursday's open, thus making it our Stock of the Week.

Mark your calendars – times below are in GMT

Monday 13 September kicks off the week with the early 12.50am announcement of Japan’s Q3 BSI Large Manufacturing Conditions – a key indicator of the strength of the Japanese economy. At 12pm, the OPEC Monthly Oil Market Report will be released to cover major issues affecting the world oil market and offer a look at crude oil market developments for the coming year. Then at 1pm, India will reveal its Consumer Price Index (CPI) for August, forecast to be up 5.60% YoY.  The US Federal Budget Balance for August, expected to be -$307bn, will be confirmed at 7pm.

At 7am on Tuesday, the UK will reveal its Average Earnings Index figure for July, expected to be 8.2%. This measurement gives some indication of recent personal income growth. Also at 7am, the UK will announce its Claimant Count Change data for August, which calculates the change in number of unemployed people receiving unemployment benefits. The US will reveal its CPI for August at 1.30pm, predicted to be up 4.2% YoY.

Wednesday opens with the UK revealing its own CPI figure at 7am, thought to be up 2.9% YoY, and leads into Canada announcing its CPI figure at 1.30pm. Then at 3.30pm, the US will announce its latest Crude Oil Inventory levels.

Thursday, 1.30pm will see the US announce the number of Initial Jobless Claims for the past week – with those bullish hoping for a decline from the previous 310k new applicants. At the same time, the US will announce its Retail Sales for August, forecast to be down 1.0% from the previous month.

Finally, at 10am on Friday, we’ll learn of the Eurozone’s CPI YoY figures for August – expected to be 3%. 10am will also set the stage for the Eurozone’s annual inflation rate announcement, which is predicted to accelerate to 3% in August from 2.2% in the previous month.

Share article