Europe ends in red after US employment
By Claude Chenjou
PARIS (Reuters) – European shares fell on Friday, excluding Frankfurt, and Wall Street fell mid-session after the release of a jobs report that highlighted U.S. job creation. From another notable monetary tightening by the US Federal Reserve (FED).
In Paris, the CAC 40 index decreased by 0.17% and ended at 6,742.25 points. British Footsie lost 0.03%. The German Dax gained 0.27%, supported especially by industrial stocks.
EuroStoxx 50 index fell by 0.17%, FTSEurofirst 300 by 0.14% and Stoxx 600 index by 0.15%.
Overall, the CAC 40 gained 0.44% and the Stoxx 600 gained 0.80% for the week, thanks in particular to expectations of a slowdown in interest rate hikes in light of Wednesday’s statements by Jerome Powell, the Fed president.
Figures released by the U.S. Labor Department on Friday rekindled optimism in markets as the U.S. economy added 263,000 nonfarm payrolls in November, wage gains rose 5.1% and the unemployment rate held steady at 3.7%. .
Economists polled by Reuters had on average forecast 200,000 job creation, average hourly wages of 4.6% and unemployment of 3.7%.
“Strong job creation and strong wage growth reinforce the Fed’s case that more needs to be done to get inflation under control,” said James Knightley, chief economist at ING.
According to the FedWatch real-time barometer, investors now rate the probability of a limited 50 basis point increase in US borrowing costs on December 14 at 87%, up from 91% before the release of the jobs report.
In bond and money markets, long-term U.S. yields rose and the dollar continued its advance, while interest-rate-sensitive tech stocks such as Apple and Nvidia slipped 1.4% to 3.1%.
At the close in Europe, the Dow Jones was down 0.17%, the Standard & Poor’s 500 was down 0.41% and the Nasdaq was down 0.67%, while most major S&P-500 sectors were in the red.
In Europe, the new technology sector was among the biggest decliners in the Stoxx 600.
Infineon, BE Semiconductor and ASML fell 0.7%, 1.04% and 1.29% respectively, while Capgemini and Worldline fell 0.53% and 2.31% in Paris.
In corporate news, Sanofi fell 1.92% after it said a bid for biotech company Horizon Therapeutics would be all cash.
Credit Suisse rose 9.3% as its president, Axel Lehmann, reassured investors of the bank’s capital outflows.
Bond yields, which had been lower for most of the session, turned after the release of the US jobs report.
The ten-year German Bund rose more than three basis points to 1.85%, and the two-year rose more than seven basis points to 2.11%.
The U.S. ten-year Treasury yield US10YT=RR was up nearly five points to 3.57%, and the two-year was up 8.4 points to 4.34%.
The dollar rose against a basket of currencies after falling to its lowest level in the session since June 29, reacting to U.S. employment figures.
“Larger-than-expected hiring could give the Fed more time to stay aggressive,” said Joe Manimbo, market analyst at Convera.
The euro fell to $1.0429, its highest level since late June, after rising as high as $1.0544.
Oil prices are volatile, struggling to find clear direction as OPEC and its allies meet on Sunday and Europe otherwise tries to keep Russian oil below $60 a barrel.
At the close of auctions in Europe, Brent rose by 0.18% to $87.04 a barrel, American light oil (West Texas Intermediate, WTI) increased by 0.48% to $81.61.
(Writing by Claude Chendjou, Editing by Sophie Louet)