(Sharecast News) - Stocks are set for a big drop at the start of trading after US lawmakers failed to bridge their differences over the size and shape of a fourth government stimulus package and following news that the US President and his wife have tested positive for Covid-19 and will now have to quarantine.
"Having built hopes higher steadily over the past few sessions that the US Republicans and Democrats were edging closer to a new fiscal stimulus package, a sense of Deja vu has swept markets this morning," said Jeffrey Halley, senior market analyst for Asia Pacific at Oanda.

"By my reckoning, the stimulus spread was at $1.6 trillion/$2.2 trillion as of yesterday, far apart, but less insurmountable then previous weeks. Sadly, it appears there is no sign that either side is prepared to cross the spread, or even meet in the middle ahead of a soft Thursday deadline US time."

Against that backdrop, FTSE 100 futures were falling by 52.50 points to 5,798.0, while those tracking the American S&P 500 were down by 45.0 points at 3,322.75.

Stimulus talks on Capitol Hill aside, the focus at the end of the week was set to be on the September non-farm payrolls report which was due out at 1330 BST.

The median consensus forecast was for a 865,000 increase in non-farm payrolls during the month of September following a rise of 1.37m during the month before.

Unemployment meanwhile was expected to continue trending lower, from 8.4% to 8.2%, alongside a one tenth of a percentage point gain in the year-on-year rate of growth in average hourly earnings to 4.8%.

Heavy investor appetite for IAG rights issue

IAG said all the shares in its €2.74bn (£2.5bn) rights issue were taken up by investors after demand for additional shares exceeded supply. The British Airways owner' said shareholders took up 92.75% of new shares during the pre-emptive subscription period which ended on 26 September. The rest of the shares were allocated on a pro-rata basis after investors requested more than double the number of new shares remaining.

AstraZeneca announced on Friday that 'Farxiga', or dapagliflozin, has been granted 'Breakthrough Therapy Designation' in the US, for patients with chronic kidney disease, with and without type-2 diabetes. The FTSE 100 pharmaceuticals giant said the Food and Drug Administration (FDA) granted the designation based on clinical evidence from the DAPA-CKD trial.

James Fisher and Sons said its specialist technical business had won a multi-million-pound five-year Royal Navy contract to service life-support diving equipment. There were no specific figures on the contractual amount. The company said the deal builds on a 20-year relationship with the Royal Navy, reflecting JFD's breadth of expertise and commitment to capability development and safety improvements in military diving.