by Diana Mandia
(Reuters) – European stock markets ended a session higher on Friday without much catalyst due to the All Saints’ Day public holiday and after three consecutive sessions of decline, while investors turn their attention to what promises to be a week intense with the American presidential election.
In Paris, the CAC 40 gained 0.80% to 7,409.11 points. In Frankfurt, the Dax gained 0.92% and in London, the FTSE 100 increased by 0.83%.
The EuroStoxx 50 index ended with a gain of 1.03%, the FTSEurofirst 300 gained 1.05% and the Stoxx 600 increased by 1.11%.
Over the week, the Stoxx 600, however, lost 1.50% and the CAC 40 lost 1.18%.
European stock markets regained some momentum on Friday, putting an end to three consecutive sessions of decline at the end of a busy week of corporate results which weighed on the morale of investors on both sides of the Atlantic, in particular in the technology sector.
In addition to the financial results, investors’ attention was focused on the United States, with Americans due to go to the polls on Tuesday to elect their next president, in an election that promises to be close between the Democratic vice-president Kamala Harris and Republican candidate and former President Donald Trump.
Even though polls show them neck and neck, recent increases in Treasury bond and dollar yields indicate, according to some traders, that the markets are instead anticipating a victory for Donald Trump.
The presidential election will also take place on the eve of another important moment next week, the start of the November meeting of the Federal Reserve (Fed), even if its outcome will be much more predictable, a reduction in interest rates. 25 basis points seeming to be acquired.
Friday’s release of US labor market data, which showed that job creation slowed sharply in October due to the impact of hurricanes and strikes, has not yet affected these bets. especially since the unemployment rate remains stable, which reassures investors about the resilience of the world’s largest economy.
“Under normal circumstances, this report would be extremely damaging to the dollar and the possibility of a 50bp rate cut would have suddenly returned to the forefront. But markets are rightly avoiding an overreaction,” wrote in a note Kyle Chapman, analyst at Ballinger Group.
VALUES
Societe Generale, which already jumped on the stock market on Thursday after a better than expected third quarter, gained 3.3% after Morgan Stanley raised its recommendation on the stock, and signed the best performance of the CAC 40.
Viridien for its part lost 4%, the group specializing in subsoil exploration having reported on Thursday a drop of 3% in its turnover from activities over the first 9 months.
Elsewhere in Europe, Lufthansa dropped 2.9% after HSBC lowered its recommendation from “buy” to “hold.”
German meal kit company HelloFresh gained 4.6% on an increase in recommendation from JP Morgan.
A WALL STREET
The New York Stock Exchange rebounded on Friday after recent fears about the costs of investments in artificial intelligence (AI) which weighed on technology-related stocks.
At closing time in Europe, the Dow Jones gained 0.96%, the Standard & Poor’s 500 0.77% and the Nasdaq Composite 1.11%.
Amazon, the American online commerce giant, soared 6.6% after the publication Thursday evening of its quarterly results above expectations which reassured the markets.
TODAY’S INDICATORS
In the United States, the monthly report from the American Department of Labor showed on Friday 12,000 non-agricultural jobs created in October, a figure well below the expectations of analysts, who expected an average of 113,000. The unemployment rate stood at 4.1% in October, stable compared to September, as expected.
The day’s other major indicator, the monthly survey from the Institute for Supply Management (ISM), showed that manufacturing activity deteriorated unexpectedly in October, hitting a 15-month low , while prices paid for inputs accelerated more than expected.
RATE
Sovereign yields were somewhat feverish on Friday, reacting sharply lower to the US jobs report, which reinforced market expectations for Fed rate cuts, before easing towards the end of the session in Europe.
The yield on the ten-year German Bund rose 1 basis point to 2.4020%, while that of its two-year counterpart, which had risen the day before on higher-than-expected inflation data in the euro zone , fell almost 4 basis points to 2.2770%.
In the UK, bond yields have been under pressure this week as the new Labor government’s tax-and-spending budget sparked market fears of a surge in inflation.
Yields on two-year gilts rose 26 basis points during the week and before the meeting of the Bank of England, which is expected to reduce its rates by 25 basis points next Thursday.
In the United States, the yield on ten-year Treasuries, now focused on the increase in prices paid for inputs and the risks linked to the American presidential election, has turned upwards, and gained around 5 basis points at 4.3371%. The yield on the two-year bond showed a gain of 0.6 basis points to 4.1723%.
CHANGES
The dollar increased by 0.19% against a basket of reference currencies, with caution required before the electoral meeting, while the euro lost 0.3% to 1.0850 dollars.
OIL
Oil prices rose on Friday, reaching their highest level in a week, following a report published by the American site Axios according to which Iran was preparing a retaliatory strike against Israel from Iraq in the coming days.
Brent rose 0.84% ​​to $73.42 per barrel and American light crude (West Texas Intermediate, WTI) advanced 0.85% to $69.85.
(Written by Diana Mandiá)
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I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
