by Claude Chendjou
PARIS (Reuters) – The main European stock exchanges, apart from Frankfurt, ended in the red on Friday for the last session of the month, the political context linked to the elections in France having taken precedence over the publication of macroeconomic indicators in Europe in the United States. United.
At the close in Europe, the Dow Jones advanced by 0.16%, the Standard & Poor’s 500 by 0.27% and the Nasdaq by 0.30%, despite the plunge of Nike (-19.01%) which warned about its prospects.
In Paris, the CAC 40 ended down 0.68% to 7,479.4 points, with political risk dominating. The British Footsie, weighed down by the cyclical consumption segment, lost 0.19%. The German Dax gained 0.13%, thanks to technology stocks which offset the decline in the utilities sector.
The EuroStoxx 50 index fell by 0.18% and the FTSEurofirst 300 by 0.21%. The Stoxx 600, down 0.23% at the close, suffered a fourth consecutive session in the red with a sharp drop in the consumption sector.
The risk premium on French government bonds reached 84 basis points on Friday, the highest level since the eurozone crisis in 2012, as the first round of legislative elections in France is scheduled for Sunday.
“There is a broader risk of a slowdown in Europe linked to France depending on the election results,” notes James Reilly, markets economist at Capital Economics.
Still on the political front, in the United States, the Democratic camp spoke of a “disaster” after Joe Biden’s performance against Donald Trump during the first debate ahead of the November presidential election. Behind the scenes, the question of withdrawing the candidacy of the current President of the United States is now being considered by certain Democratic officials.
In a seesaw session, the day’s economic indicators delighted investors for a while, notably PCE inflation in the United States which stabilized in May over one month and slowed to 2.6% over one year. . After the publication of this statistic, the probability of a rate cut by the Federal Reserve (Fed) in September increased to 68% from 61% previously.
American household morale also deteriorated in June, but at a slower pace than expected in the first estimate, according to the final results of the University of Michigan survey.
In France, the harmonized consumer price index (HICP) to European standards was also reassuring, since it came out in line with expectations, up 2.5% year-on-year in June after +2.6% in may.
In Great Britain, gross domestic product (GDP) grew by 0.7% in the first quarter of 2024 compared to the previous quarter, compared to a Reuters consensus of +0.6%.
In Germany, on the other hand, the number of unemployed increased more than expected in June, bringing out an unemployment rate of 6.0%, in a context of economic weakness which is weighing on the labor market.
VALUES IN EUROPE
In the wake of Nike, which announced that it expected a drop in its turnover in 2025, JD Sports dropped 5.42%, Puma 2.57%, while Adidas reduced its closing gains to 0.18% after a morning increase of 1.5%.
Nokia gained 1.53% following the acquisition of American Infinera Corp for an enterprise value of 2.3 billion dollars.
L’Oreal fell 3.02% as Chief Executive Nicolas Hieronimus said he expected the market to grow by 4.5% to 5%, compared with more than 5% previously, due to an anticipated rebound in China that failed to materialise, according to a JPMorgan note.
Atos fell 15% after announcing that it had been informed of the resignations with immediate effect of David Layani and Helen Lee Bouygues from its board of directors and of Onepoint’s desire to exit its capital.
Air France-KLM lost 1.82% following a lower recommendation from Barclays.
Fortum fell 4.65% as Goldman Sachs downgraded its advice on the Finnish group to “sell” due to limited upside in the stock’s potential and earnings outlook.
CHANGES
The dollar fell 0.03% on Friday against a basket of reference currencies after the publication of the monthly PCE price index in the United States.
The euro gains 0.07%, to 1.071 dollars, but is heading towards a loss of 1.3% against the greenback over the whole month, the most significant decline since January, due to political risk in France.
The pound sterling is trading at $1.2639 (+0.01%) and is on track to record its biggest monthly increase (+0.6% at this stage) against the euro since January. The British currency is supported by GDP data published this Friday and the prospect of political stability with the expected large victory of Labor in the legislative elections on July 4.
RATE
The ten-year German Bund yield ended up 3.6 basis points, at 2.494%, and that of the French OAT rose by around two points, to 3.294%.
At the time of the close of trading in Europe, the yield on ten-year US Treasury bonds rose by 4.9 basis points to 4.3332% in a volatile session where it fell to 4.261%.
OIL
The oil market was stable on Friday after the US inflation: Brent gained 0.09% to $86.47 per barrel, while US light crude (West Texas Intermediate, WTI) fell 0.33% to $81.47.
Both oil benchmarks are heading for a gain of nearly 2% for the week as a whole and more than 6% for the month.
(Written by Claude Chendjou, edited by Tangi Salaün)
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