Europe closes in the red after US jobs report
EUROPE CLOSES IN RED FOLLOWING US LABOR REPORT
(Reuters) – European stocks ended lower and Wall Street fell mid-session on Friday after better-than-expected US jobs data came in, bolstering speculation of another rapid monetary tightening by the Federal Reserve (Fed) in September.
In Paris, the CAC 40 closed down 0.63% at 6,472.35 points. Britain’s Footsie lost 0.11% and Germany’s Dax fell 0.65%.
The EuroStoxx 50 Index lost 0.88%, the FTSEurofirst 300 0.72% and the Stoxx 600 0.82%.
At the close, Wall Street in Europe was also down, with the Dow Jones Index down 0.38%, the broader Standard & Poor’s 500 down 0.79% and the Nasdaq Composite down 1.23%.
The US economy added far more jobs than expected in July, and the unemployment rate fell to 3.5%, returning to pre-COVID-19 pandemic levels, the department’s monthly report on Friday du Travail showed, the provides the most compelling evidence yet that the world’s largest economy is not in recession. [L8N2ZH4GO]
This official report shows that 528,000 non-farm payrolls were added last month, while economists and analysts polled by Reuters forecast an average of 250,000 with the unemployment rate unchanged at 3.6%.
“This is very hot job data,” said Peter Cardillo, chief economist at Spartan Capital Securities in New York. “That means the Fed will keep raising rates. Bonds are crushed. Stocks are going down.”
Over the week, the Stoxx 600 was down 0.44% and the CAC 40 was down 0.55%, bringing its year-to-date decline to 10.32%.
VALUES
In Europe, the technology department shows the largest sectoral decline (-2.39%), followed by the media (-2.04%), which has been penalized by the global advertising giant WPP, which after publishing insufficient results and forecasts in the eyes of Analysts plummeted 8.75%. As a result, Publicis fell 3.84% in Paris.
Among the biggest climbers in the Stoxx 600, Deutsche Post rose 4.56% after releasing quarterly results that beat expectations.
EVALUATION
Euro-zone benchmark yields rallied on Friday amid speculation of a US Federal Reserve rate hike in September.
The 10-year German Bund ended the day at 0.9350%, up almost 16 basis points.
The situation on the American market is comparable, with ten-year bonds rising by almost 19 basis points to 2.8636%.
CHANGES
Speculations of a Fed rate hike are also benefiting the dollar, which is up 1.044% against other major currencies.
The euro fell 0.87% to $1.0154.
OIL
Oil prices recouped some of their weekly losses but were expected to close near their lowest levels since February on Friday as concerns over a possible recession and lower demand for fuel continued to rock markets.
Brent was up 1.77% at $95.79 a barrel and West Texas Intermediate (WTI) was up 1.74% at $90.08 a barrel, but are still down just over 4% on the week.
(Written by Kate Entringer, edited by Jean-Michel Bélot)
