(Reuters) – European stocks ended higher on Friday as the resilience of the U.S. labor market fueled optimism over the economic outlook although it dampened expectations of a Federal Reserve rate cut.
In Paris, the CAC 40 ended up 1.26% at 7,432.93 points. The British Footsie took 0.98% and the German Dax 1.44%.
The EuroStoxx 50 index gained 1.23%, the FTSEurofirst 300 1.02% and the Stoxx 600 1.07%.
Over the week, the Stoxx 600 lost 0.30% and the CAC 40 0.78%, the two indices recording their second weekly loss in a row.
As concerns about the health of the US banking sector persist, the latest US jobs report released on Friday showed a bigger-than-expected increase in job creation in April, helping to ease markets at the end of the month. a week marked by interest rate hikes from the Fed and the European Central Bank (ECB).
Widely followed by investors, the report reported 253,000 non-farm payrolls last month, while economists and analysts polled by Reuters predicted an average of 180,000.
“In the past we have seen a very positive jobs report drag the market down, but today the market is holding its gains thinking the glass is half full, a soft landing is possible and that ‘A recession is not so imminent,’ said Gina Bolvin, president of the Bolvin Wealth Management Group.
These figures, while tempering expectations that the US central bank will end its monetary tightening cycle, provide some relief to the markets in a week when fears about the health of US regional banks have resurfaced.
VALUES
The banks ended Friday with a gain of 2.9%, the strongest of the Stoxx 600, with in particular Unicredit taking 4.8% and BNP Paribas 3.4%
IAG, owner of British Airways, gained 2.3% as the airline forecast a profit above its expectations this year thanks to a strong rebound in demand.
Air France-KLM, which published an operating loss slightly above expectations, on the other hand dropped 2.6%
Adidas for its part jumped 8.9%, after the publication of quarterly results better than expected.
Telecom Italia has granted itself 8% while, according to sources, the Italian Treasury is ready to support a proposal to buy the fixed network of the operator by KKR and the Italian Caisse des dépôts (CDP).
AT WALL STREET
At closing time in Europe, the Dow Jones took 1.19%, the Standard & Poor’s 500 1.43% and the Nasdaq Composite 1.73%, with the giant Apple rising 4.9% after publishing Thursday quarterly results above expectations.
The American regional bank PacWest, which fell more than 50% on Thursday, takes 78%.
THE INDICATORS OF THE DAY
Industrial production in France fell in March, according to data published Friday by INSEE, with a significant decline in coking-refining due to strikes that affected refineries.
In Germany, factory orders recorded a much sharper-than-expected contraction in March, the sharpest one-month contraction since 2020, at the height of the COVID-19 pandemic, according to the Federal Statistical Office.
Retail sales in the 20 countries sharing the euro also fell more than expected month on month in March, according to Eurostat data, as inflation and rising interest rates took a big bite out of disposable income and limited purchasing power.
CHANGES
The dollar index, which measures its evolution against a basket of reference currencies, fell by 0.1 after the official report on employment in the United States.
The euro rose 0.1% to $1.1024.
RATE
Bond yields rose after stronger than expected US job creation data dampened expectations of a Federal Reserve rate cut.
In Europe, the ten-year German Bund yield rose 9 basis points to 2.2% while its two-year equivalent rose more than 8 basis points to 2.6%.
In the United States, the yield on ten-year US government bonds rose more than 10 basis points to 3.4% after falling below 3.3% on Thursday, for the first time in a month, on fears on banks.
Its two-year equivalent is up 20 basis points at 3.9%
OIL
Oil prices are up but are set to suffer a third consecutive week of losses in response to concerns over a weakening US economy and Chinese demand.
Brent crude, down around 5% over the week, rose 3.35% to $74.93 a barrel, while US light crude (West Texas Intermediate, WTI) rose 3.56% to 70.99 dollars but posted a weekly decline of 7%.
(Written by Diana Mandiá, edited by Matthieu Protard)
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