EUROPEAN STOCKS EXPECTED TO RETURN UP FOR THE WEEK START
by Laetitia Volga
PARIS (Reuters) – Major European stock markets are expected to rise at the open on Monday, paring some of the previous session’s losses following the US employment figure while awaiting fresh clues on inflation trajectories.
The first available indications speak of 0.52% for the Paris CAC 40, 0.51% for the Dax in Frankfurt, 0.34% for the FTSE in London and 0.59% for the EuroStoxx 50.
Friday’s unexpected announcement of a sharp acceleration in job creation in the United States to 528,000 in July, accompanied by a fall in the unemployment rate to pre-pandemic levels, has allayed recession fears but also raised the prospect that the Fed would continue to act quickly work will raise his interest rates.
“Employment showed the complete opposite of a slowing economy…which means it will be very difficult to support the idea of a Fed rate cut before the end of next year,” said Thomas Tzitzouris, research manager at Strategas.
The very strong US jobs data raised the stakes only for monthly consumer price (CPI) data due Wednesday, which Reuters consensus could show inflation moderating slightly to 8.7% but further acceleration in “core CPI”- Index.
ON WALL STREET
The New York Stock Exchange ended in mixed order on Friday, with the Nasdaq being punished by technology stocks after strong jobs data in the United States revived fears of swift monetary tightening by the Fed.
The Dow Jones Industrial Average rose 0.23% to 32,803.47 points, the broader S&P 500 lost 0.16% to 4,145.19 points and the Nasdaq Composite fell 0.50% to 12,657.56 points.
Tesla fell 6.6%, weighing heavily on the S&P 500 and Nasdaq. Meta, owner of Facebook, lost 2% and Amazon 1.24%.
US Treasury yields rose as the likelihood of a rate hike increased by 75 basis points in September, pushing bank stocks like JPMorgan (+3%) higher.
Lyft rose 16.62% after reporting a record quarterly profit and said it expects adjusted operating income of $1 billion for 2024.
Futures signal a flat session on Monday.
On the Tokyo Stock Exchange, the Nikkei edged up (0.31%), helped by the solid outlook for several companies.
Suzuki Motor rose 10.09% after reporting a 36.8% rise in quarterly operating profit, while games maker Bandai Namco rose 4.16% after raising its half-year profit forecast.
In China, the CSI 300 fell -0.4% as the health crisis and tensions with Washington made the market nervous.
Tourism-dependent Hainan Island has placed more districts under lockdown amid a resumption of the COVID-19 epidemic.
The US 10-year Treasury yield fell slightly to 2.8231%, retaining most of the gains made in reaction to the jobs data. It was up 2.869% on Friday, its highest level since July 22.
The dollar is steady against a basket of major currencies after gaining 0.88% on Friday and the euro is trading around $1.0185
After hitting their lowest level in several months, oil prices rose slightly as US jobs numbers and Chinese export data eased recession fears.
Brent rose 0.46% to $95.36 a barrel and US light oil (West Texas Intermediate, WTI) rose 0.38% to $89.35.
(Written by Laetitia Volga, edited by)