(Reuters) – European stocks ended in the red and Wall Street fell mid-session on Friday after better-than-expected U.S. jobs data came in, bolstering speculation of another rapid tightening Federal Reserve (Fed) monetary policy in September.
In Paris, the CAC 40 ended down 0.63% at 6,472.35 points. The British Footsie lost 0.11% and the German Dax fell 0.65%.
The EuroStoxx 50 index lost 0.88%, the FTSEurofirst 300 0.72% and the Stoxx 600 0.82%.
At the time of the close in Europe, Wall Street was also moving in the red, the Dow Jones index lost 0.38%, the wider Standard & Poor’s 500 fell 0.79% and the Nasdaq Composite lost 1, 23%.
The U.S. economy added far more jobs than expected in July and the unemployment rate fell to 3.5%, returning to its pre-COVID-19 pandemic level, the department’s monthly report showed on Friday. du Travail, which offers the most convincing proof to date that the world’s largest economy is not in recession. [L8N2ZH4GO]
This official report shows 528,000 non-agricultural job creations last month while economists and analysts polled by Reuters forecast an average of 250,000 with an unemployment rate unchanged at 3.6%.
“This is very hot jobs data,” said Peter Cardillo, chief economist at Spartan Capital Securities in New York. “That means the Fed is going to keep raising interest rates. Bonds are getting crushed. Stocks are going down.”
Over the week, the Stoxx 600 posted a drop of 0.44% and the CAC 40 a drop of 0.55%, bringing its decline since the start of the year to 10.32%.
VALUES
In Europe, the technology compartment shows the largest sectoral drop (-2.39%), followed by the media (-2.04%), penalized by the global advertising giant WPP which fell by 8.75% after the publication insufficient results and forecasts in the eyes of analysts. In its wake, Publicis fell 3.84% in Paris.
Among the biggest risers in the Stoxx 600, Deutsche Post climbed 4.56% after reporting quarterly results that beat expectations.
RATE
Benchmark eurozone yields rebounded on Friday on speculation of a September Federal Reserve rate hike.
The ten-year German Bund ended the day at 0.9350%, up nearly 16 basis points.
The situation is comparable on the American market, the ten-year rises by nearly 19 basis points to 2.8636%.
CHANGES
Speculation around a rate hike by the Fed also favors the dollar, which is up 1.044% against other major currencies.
The euro thus fell 0.87% to 1.0154 dollars.
OIL
Oil prices recouped some of their week’s losses but were still expected to close Friday near their lowest levels since February as worries about a possible recession and lower demand for fuel continued to rattle markets.
Brent thus took 1.77% to 95.79 dollars a barrel and American light crude (West Texas Intermediate, WTI) 1.74% to 90.08 dollars, but they nevertheless show a weekly decline of just over 4%.
(Written by Kate Entringer, edited by Jean-Michel Bélot)
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