Europe closes in red after US jobs report
(Reuters) – European stocks closed in the red and Wall Street fell mid-session on Friday after better-than-expected US jobs data, fueling speculation of another rapid monetary policy tightening by the Federal Reserve in September.
In Paris, the CAC 40 closed down 0.63% at 6,472.35 points. Britain’s FTSE lost 0.11% and Germany’s DAX fell 0.65%.
The EuroStoxx 50 Index lost 0.88%, the FTSEurofirst 300 Index lost 0.72%, and the Stoxx 600 Index lost 0.82%.
At the time of closing in Europe, Wall Street was also moving in the red, the Dow Jones lost 0.38%, the broader Standard & Poor’s 500 Index fell 0.79% and the Nasdaq Composite lost 1, 23%.
The department’s monthly report on Friday showed that the US economy added significantly more jobs than expected in July and the unemployment rate fell to 3.5%, returning to the pre-COVID-19 epidemic level. The world’s largest economy is not in a recession. [L8N2ZH4GO]
This official report shows 528,000 non-farm jobs were created last month while economists and analysts polled by Reuters expected an average of 250,000 with the 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 will keep raising interest rates. Bonds are crashing. Stocks are going down.”
Over the course of the week, the Stoxx 600 Index recorded a decline of 0.44% and the CAC 40 Index of 0.55%, bringing its decline since the beginning of the year to 10.32%.
In Europe, the technology division showed the largest sectoral decline (-2.39%), followed by the media (-2.04%), penalized by the global advertising giant WPP which fell by 8.75% after publishing inadequate results and forecasts in the eyes of analysts. In the aftermath, Publicis fell 3.84% in Paris.
Among the biggest gains in the Stoxx 600, Deutsche Post stock rose 4.56% after reporting quarterly results that beat expectations.
Eurozone benchmark yields rebounded on Friday amid speculation of a September interest rate hike by the Federal Reserve.
German 10-year bonds ended the day at 0.9350%, up nearly 16 basis points.
The situation is comparable in the US market, where the 10-year rose by about 19 basis points to 2.8636%.
Speculation about an interest rate hike by the Federal Reserve also favors the dollar, which is up 1.044% against the other major currencies.
The euro fell 0.87% to $1.0154.
Oil prices recovered some of their weekly losses, but were still expected to close on Friday near their lowest levels since February, as fears of a possible recession and lower fuel demand continued to rattle markets.
Thus, the price of Brent crude rose by 1.77% to $ 95.79 a barrel and US light crude (West Texas Intermediate WTI) 1.74% to $ 90.08, but nevertheless they show a weekly decrease of just over 4%.
(Reporting by Kate Enteringer; Editing by Jean-Michel Belleau)