by Claude Chendjou
PARIS (Reuters) – European stock markets ended higher on Friday with luxury goods and Wall Street was volatile late morning in New York after a series of mixed economic data in the United States, including the American employment report.
In Paris, the CAC 40 ended with a gain of 1.32% to 7,526.55 points. The British Footsie advanced by 0.57% and the German Dax by 0.78%.
The EuroStoxx 50 index increased by 1.11%, the FTSEurofirst 300 by 0.78% and the Stoxx 600 by 0.74%.
Over the week as a whole, the CAC 40 gained 2.45% and the Stoxx 600 1.30%, the fourth week in a row of increases for the latter.
At the close in Europe, the Dow Jones fell by 0.01%, the Standard & Poor’s 500 by 0.06% and the Nasdaq by 0.04%, the session being up and down after the monthly figures of the employment in the United States.
The US Department of Labor announced early this afternoon that the US economy had created more jobs than expected in November, 199,000, a sign of a certain robustness in the labor market while the US Federal Reserve (Fed ) seeks to curb demand to curb inflation.
The unemployment rate fell to 3.7% after 3.9% in October, while the increase in average hourly wages slowed to 4.0% year-on-year after 4.1% the previous month.
“We have not seen a disproportionate increase in the average hourly wage, which is the inflation element of this report. We have seen the creation of a significant number of jobs,” commented Art Hogan, strategist markets at B. Riley Wealth.
“This is the definition of a soft landing where inflation is going in the right direction and we have not killed the job market,” he added, to explain the volatility of American stock indices .
Household morale in the United States has also improved more than expected since the beginning of December, with a University of Michigan index at 69.4.
On the bond market, expectations of rate cuts from the Fed, which meets next week, have been postponed from March to May. Traders still expect the federal funds rate to fall from a range of 5.25%-5.50% to a range of 4.0%-4.25% by the end of 2024.
VALUES IN EUROPE
The positive trend in Europe was supported by the luxury sector (+2.01%) against a backdrop of hopes of a future rate cut from the European Central Bank (ECB). LVMH and Hermès gained 3.28% and 1.48% respectively while Richemont, Salvatore Ferragamo and Moncler each took around 2.5%.
The announcement of the return of Vivendi (+2.41%) to the CAC 40 to replace Worldline (-1.26%) was welcomed by the markets.
Sainsbury (+1.62%), benefited from the raising of Goldman Sachs’ advice from “neutral” to “buy”.
On the downside, Anglo American plunged 18.96%, the mining group having reduced its production target for 2024 and announced its intention to reduce its investments by 2026.
RATE
The yield on the ten-year German Bund ended Friday up about seven basis points, at 2.275%, but it showed its biggest two-week decline since mid-March.
The money markets estimate with a probability of 70% that the ECB, which meets on December 14, will reduce its interest rates next March and that they could fall by 140 basis points in 2024.
The yield on US Treasury bills of the same maturity rose around 12 points to 4.2583% at the time of stock market closing in Europe. But it was still above 5% in October.
CHANGES
The acceleration of job creation in the United States supports the dollar which advances by 0.47% against a basket of reference currencies. The greenback is heading for a weekly gain after three consecutive weeks of decline.
The euro is trading at $1.0749 (-0.40%) and is expected to decline throughout the week.
The pound sterling is trading at $1.2535 (-0.44%), also on track to post a loss for the week as a whole.
OIL
Oil is rebounding, driven by Russia and Saudi Arabia, which have called for a reduction in OPEC+ production.
Brent rose 2.36% to $75.8 per barrel and American light crude (West Texas Intermediate, WTI) rose 2.62% to $71.16.
However, the two oil benchmarks are expected to record a seventh consecutive weekly loss over the entire week, the first time in five years, due in particular to fears of excess supply and weak Chinese demand.
TO BE CONTINUED ON MONDAY:
(Written by Claude Chendjou, edited by Bertrand Boucey)
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