by Claude Chendjou

PARIS (Reuters) – European stock markets closed higher on Friday and Wall Street was also in the green at mid-session, as a rebound in major U.S. technology stocks helped ease the risk aversion that has rocked markets during the week.

In Paris, the CAC 40 ended up 1.22% at 7,517.68 points. The British Footsie gained 1.21% and the German Dax gained 0.68%.

The EuroStoxx 50 index rose by 1.07%, the FTSEurofirst 300 by 0.87% and the Stoxx 600 by 0.87%.

Over the week as a whole, the CAC 40, however, suffered a loss of 0.24%, while the Stoxx 600, by gaining 0.59%, narrowly returned to green, avoiding a second consecutive weekly decline.

At the time of the European closing, the Dow Jones advanced by 1.74%, the Standard & Poor’s 500 by 1.15% and the Nasdaq by 0.98%, thanks in particular to 3M (+18.83%) and a large part of the “Magnificent Seven”, the American behemoths.

Victims at the beginning of the week of fears of overvaluation, technology and semiconductor stocks regained some of the lost ground on Friday before an avalanche of new results expected next week, including those of Microsoft, Meta, Apple and Amazon.

“Next week is an even busier week for financial releases than this week (…) after a tough week,” said Rick Meckler, partner at Cherry Lane Investments, suggesting that Friday’s rebound could be temporary.

The Wall Street volatility index, which climbed to a 14-week high on Thursday, fell 9.69% to 16.67 points on Friday, while its equivalent on the EuroStoxx fell 4.63% to 16.14 points at the close, a sign of renewed appetite for risk.

The publication of the PCE consumer price index in the United States for the month of June, which came out in line with expectations, also reassured investors about an imminent cut in rates by the Federal Reserve (Fed).

“From the Fed’s perspective, cumulatively, we think the data show enough progress – both on inflation and labor market conditions – for policymakers to open the door to a September rate cut at next week’s FOMC meeting,” writes Rubeela Farooqi, economist at High Frequency Economics.

VALUES IN EUROPE

Hermès advanced by 3.38% after having outperformed its competitors in the second quarter with sales up 13.3%. This allowed the European luxury segment to rebound by 2.87% with Kering (+2.17%) and LVMH (+1.60%).

Capgemini fell by 2.45% after lowering its annual revenue target, while the new technologies sector (+0.86%) recovered in the wake of the Nasdaq.

Bureau Veritas climbed 8.0% after better-than-expected first-half financial results.

EssilorLuxottica jumped 7.38% after the CEO confirmed Meta’s intention to eventually take a stake in its capital.

The results of Air Liquide (+1.51%), Spie (+0.72%), Amundi (+1.28%), Vallourec (+2.95%) and Bouygues (+0.96%) were applauded.

Mercedes-Benz, after an initial decline linked to the reduction of its profit margin forecast for its main automobile division, finally ended in the green (+0.1%). BASF fell 2.31% despite the group’s commitment to regain its pricing power in order to accelerate its growth.

CHANGES

The dollar fell slightly, by 0.03%, against a basket of reference currencies, while the euro gained 0.13%, to 1.0858 dollars. The yen, which is trading at 153.8 to the dollar, is heading for its best weekly performance in nearly three months on Friday, against a backdrop of suspicions of intervention by the Japanese authorities on foreign exchange.

RATE

The yield on 10-year US Treasury notes fell about five basis points (bps) to 4.2094%, a one-week low after the country’s PCE inflation figures.

The yield on the German Bund of the same maturity ended virtually flat on Friday at 2.407% but posted its biggest weekly decline since mid-June. A series of macroeconomic data reinforced investors’ conviction that the European Central Bank (ECB) will accelerate the pace of its monetary easing by the end of the year.

OIL

Oil prices fell by more than two dollars on Friday due to the drop in Chinese demand and hopes of a ceasefire agreement in the Gaza Strip: Brent fell by 2.05% to 80.68 dollars per barrel and American light crude (West Texas Intermediate, WTI) by 2.02% to 76.70 dollars.

(Written by Claude Chendjou, edited by Kate Entringer)

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