by Claude Chendjou

PARIS (Reuters) – European stock markets, weighed down by new technologies and real estate, ended in mixed order on Thursday, while Wall Street was in the green at mid-session, reassured by the statistics on jobless claims which removes the prospect of an imminent recession in the world’s largest economy.

In Paris, the CAC 40 ended down 0.26% at 7,247.45 points with notable declines for Teleperformance (-4.47%), L’Oréal (-1.28%) and Unibail-Rodamco-Westfield (-0.98%). The British Footsie dropped 0.27% with a 4.01% drop for BT Group. The German Dax, on the other hand, rose 0.29%.

The EuroStoxx 50 index gained 0.01%. The FTSEurofirst 300 gained 0.06% and the Stoxx 600 gained 0.08%.

At the time of the European closing, the Dow Jones advanced by 1.34%, the Standard & Poor’s 500 by 1.79% and the Nasdaq by 2.26%, the indices being pulled by an indicator on employment in the United States which suggests that the risk of a recession is not imminent.

The U.S. Labor Department said Thursday that jobless claims fell to 233,000 last week from 250,000 the previous week and a consensus of 240,000.

The lower-than-expected number of Americans filing for unemployment benefits is reassuring investors after last week’s monthly U.S. jobs report triggered a panic selloff in stocks across global markets.

“Since Friday’s jobs report, everyone has been worried about a recession…. Claims for unemployment benefits have been lower than expected, partly alleviating fears of a complete reversal in the labor market,” said Thomas Hayes, president of Great Hill Capital.

For Florian Ielpo, head of macroeconomics at Lombard Odier Investment Managers, the unemployment registration figures in the United States are not easy to interpret.

“It is difficult to read a meaningful message in these data,” he said. “At least the latest figure remains comparable to the previous one, without reversing the upward trend in weekly jobless claims,” ​​he added.

The appetite for risky assets remains measured, as evidenced by the still high levels of volatility indices on Wall Street (at around 25 points) and on the EuroStoxx (around 22 points).

Ahead of today’s U.S. jobs report, JPMorgan raised the probability of a U.S. recession by the end of this year to 35% from 25%, citing easing labor market pressures.

Meanwhile, in Japan, where the recent crisis in the financial markets also originated, the minutes of the Bank of Japan’s (BoJ) latest monetary policy meeting suggest further rate hikes, reviving caution on risky assets.

The rebound on Wall Street did not fully benefit Europe, where stock market indices reduced their losses without all managing to turn green at the close, weighed down in particular by the real estate sector (-0.68%) and that of new technologies (-0.10%) in the wake of the decline in the sector in Asia.

VALUES IN EUROPE

Deutsche Telekom gained 1.88% as the telecoms operator reported a 7.8% increase in second-quarter operating profit, in line with analysts’ consensus.

Allianz ended in the green (+1.59%) after a 7.5% increase in its net profit in the second quarter.

Zurich Insurance fell 1.25% as concerns over losses from natural disasters overshadowed its record first-half profit.

Deliveroo climbed 10.51% after reporting better-than-expected first-half profit and announcing a share buyback plan.

Entain rose 5.08% after the British gambling group raised its full-year forecast on Thursday after a better-than-expected second-quarter performance.

CHANGES

The dollar edged up 0.12 percent against a basket of benchmark currencies after the employment report, but is still close to Monday’s eight-month low of 102.69.

The euro fell 0.07% to $1.0914, while the pound gained 0.4% to $1.2741.

RATE

The yield on the 10-year German Bund ended virtually flat at 2.271%, the day after its biggest single-session rise in five weeks.

The ten-year US Treasury bond rate rose 2.4 basis points to 3.9915% after the publication of unemployment benefit figures.

“This is a very positive result for the markets as a whole. It reinforces the fact that labor market dynamics are not slowing down as much as the employment report indicates, and it also reinforces the absence of very large layoffs in the economy,” said Gennadiy Goldberg, head of U.S. rates strategy at TD Securities.

Bond yields fell after Friday’s monthly jobs report showed an unexpected increase in the unemployment rate.

OIL

The oil market continues to rise after two sessions of gains, as risks to Middle East supply outweigh concerns about global demand.

Brent rose 0.55% to $78.77 per barrel, and US light crude (West Texas Intermediate, WTI) rose 1% to $75.97.

(Written by Claude Chendjou, edited by Sophie Louet)

Copyright © 2024 Thomson Reuters