Mixed stock market close in Europe, Wall Street volatile after American employment

by Claude Chendjou

PARIS (Reuters) – Wall Street was in disarray late Friday morning in New York after the publication of a mixed report on American employment, while the European stock markets, apart from the CAC 40 and the Stoxx 600, ended in slight decline in a volatile session where the indices set records.

In Paris, the CAC 40 ended with a gain of 0.15% to 8,028.01 points, after hitting an unprecedented peak at 8,048.09. The German Dax, which rose the day before to a record peak of 17,879.11 points, ended Friday down 0.16%. The British Footsie, weighed down by industrial stocks (-0.15%), notably Melrose Industries (-2.49%), dropped 0.43%.

The EuroStoxx 50 index fell by 0.21% and the FTSEurofirst 300 by 0.02%. The Stoxx 600, driven by finance (+1.0%), also reached a record during the session at 504.6 points, before reducing its closing gains to 0.03%.

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Over the week as a whole, the CAC 40 gained 1.18% and the Stoxx 600 1.15%.

At the close in Europe, the Standard & Poor’s 500 and the Nasdaq, which both reached record highs during the session, now fell by 0.09% and 0.32% respectively, while the Dow Jones rose by 0.21%. All three indices were part of the session in the green.

Market sentiment is mixed after the monthly US jobs report, which showed the unemployment rate rising to 3.9% in February and wage growth slowing to 0.1% month-on-month , but an acceleration in job creation to 275,000.

“Overall, this is a rather accommodating result because we have recorded salary increases at a slower pace,” however, underlines Cameron Dawson, investment director at NewEdge Wealth.

In the euro zone, where the European Central Bank (ECB) opted on Thursday, as expected, for the status quo on its rates, the governors of the central banks of Germany, France, Finland and Lithuania raised on Friday the possibility that the ECB will soon reduce borrowing costs.

Some ECB officials are even informally pleading for a reduction in interest rates in June and July, sources told Reuters.

VALUES IN EUROPE

Vivendi dropped 2.29% after the publication of its annual results and the absence of additional information on its proposed split into four separate companies, the feasibility of which the group is still studying.

HelloFresh fell by 42.1% after revising its medium-term forecasts.

DS Smith jumped 5.16% after a takeover offer of 5.14 billion pounds made by the British packaging group Mondi (-2.28%).

TODAY’S INDICATORS

Producer prices in Germany showed a less marked decline than expected over one year in January, of 4.4%, according to the Federal Statistical Office.

German industrial production increased more than expected in January, by 1.0% compared to the previous month, the Federal Statistical Office announced.

The euro zone economy remained stable in the fourth quarter, according to the final estimate of gross domestic product (GDP) published by Eurostat.

CHANGES

The dollar index, down 0.03% on Friday and around 1.2% for the week as a whole, was heading towards its biggest weekly decline since mid-December. The greenback is reacting to expectations of a drop in interest rates in the United States, following the comments of Jerome Powell, the president of the Fed, and the latest macroeconomic indicators.

The euro stands at 1.0938 dollars (-0.07%) after the various declarations from members of the ECB.

The yen advances 0.56% to 147.2 per dollar while the Bank of Japan (BoJ) could end its negative rates in March, according to sources.

Bitcoin hit a historic peak at 70,175 points thanks to the craze for spot ETFs backed by cryptocurrency, which were recently approved in the United States.

RATE

The ten-year German Bund yield fell by around three basis points, to 2.267%, and the two-year yield, more sensitive to rate expectations, fell by 6.4 points, to 2.7372%. while the market is now betting with a probability of 98% on a drop in borrowing costs in the euro zone in June.

The yield on ten-year US Treasury bonds is almost stable at 4.0943%, while the two-year yield declines by three points to 4.484%, with traders estimating the probability of a decline at 81.1%. of Fed rates in June, compared to a probability of 74.4% before the publication of the employment report, according to the CME Group’s FedWatch barometer.

OIL

Oil prices are volatile on Friday but are heading towards a weekly decline due to concerns over Chinese demand for crude.

Brent fell 0.81% to $82.29 per barrel and American light crude (West Texas Intermediate, WTI) lost 0.98% to $78.16.

The two oil benchmarks lost at this stage respectively 0.6% and 1.3% over the whole week.

(Written by Claude Chendjou, edited by Sophie Louet)