It's a rather unusual scenario: the bond markets continue to deepen their losses, but Wall Street emerges from the red, with the S&P500 up 0.1% at 5,350 (+1.4% on the week) and the Dow Jones at +0.3%, while the Nasdaq returns 'flat'.
The Paris Bourse cut its losses from -1.2% around 2.45pm to -0.4%, climbing back above the 8,000Pts mark at the same time.000Pts (vs. 7,945 2 hours earlier).
The small 'cold shower effect' following the publication of a stronger-than-expected 'NFP' (with 100,000 more jobs created than expected) did not last, and the European stock markets are better positioned than before the US employment figures.

The Euro-Stoxx50 is a little more resilient with -0.1% (towards 5,065) and gains +1.5% over the week: it is ASML that has made the difference and played - to a lesser degree - the same role as Nvidia for the Nasdaq.
The CAC40 continues to be penalized by declines in Vinci and Renault (-2.2%), Engie (-3.1%) and Orange (-3.6%).

The session ended with a sharp rise in yields, erasing more than half the gains made at the start of the week: +15pts on T-Bonds to 4.427% (vs. 4.50% last Friday).
In Europe, Bunds rallied +8pts to 2.624%, our OATs +8pts to 3.12% (vs. 3.15% 1 week ago), Italian BTPs +10pts to 3.9650%.

A development that may come as a surprise in the wake of the ECB's first rate cut since 2019.
Yesterday, 'the rate cut reinforced the idea that global monetary policy was now moving towards an easing cycle, with further cuts on the horizon', points out Jim Reid, analyst at Deutsche Bank.

This is an important change of direction compared with the policy of the last two years, during which central banks rapidly raised rates to curb inflation", he adds.

The support measures unveiled yesterday by the ECB should also bolster the nascent recovery of the European economy, with growth now expected by the institution at 0.9% this year, compared with 0.6% hitherto.

The US rate hike could weigh before the weekend, but for the time being, Wall Street is resisting on the grounds that the US economy remains robust: it generated 272,000 non-farm jobs in May, according to the Labor Department, a number well above market expectations, which were generally in the region of 175,000.000.
Non-farm job creation for the previous two months was revised slightly downwards, from 315,000 to 310,000 for March and from 175,000 to 165,000 for April, for a total balance of -15.000 for these two months.
The unemployment rate rose by 0.1 points to 4%, where economists were expecting stability at 3.9%, while the labor force participation rate stood at 62.5% (NB: the unemployment rate had been below 4% for more than two years, the first time this had occurred since the 1950s).
The other negative indication is that average hourly earnings rose at an annual rate of 4.1% instead of 3.9%.
It will be difficult for the Fed to adopt a dovish tone for next week's FOMC meeting... but beyond the employment figures, investors know that a rate cut in the US is essentially conditional on inflation returning below the symbolic 3% threshold, which is far from a given.

In Europe this time, 1st quarter 'seasonally adjusted' GDP rose by 0.3% in both the eurozone and the EU, compared with the previous quarter, according to Eurostat, which thus confirms its previous estimates.

In the eurozone, growth was driven by positive contributions from household final consumption expenditure (+0.1 points) and foreign trade (exports minus imports, +0.9 points).

These factors more than offset negative contributions from gross fixed capital formation and changes in inventories (-0.3 points each), while the contribution from general government final expenditure was negligible.
The Euro fell back heavily after the NFP, by -0.75% to 1.0810, and the Dollar, which was in a delicate situation (an incursion below 1.0900 -which happened this morning- could have marked a swing in the downward trend on the greenback).

On the energy market, Brent crude stabilized at $80 a barrel, but lost 2% over the week.
Gold fell back nearly -3% (to 2.311) in the space of a few hours, visibly impacted by the sharp rise in rates.
In French company news, Renault Group presents its new-generation 100% automated logistics tool, equipped with a system from Exotec, a French industrial robotics company, at its largest after-sales warehouse in Villeroy.

Renewable energies group Neoen announces that at the close of the exercise period, which was open from May 22 to June 5 inclusive, 74.53% of rights had been exercised in favor of payment of its dividend in shares.

Finally, LDC announces the conclusion of an asset purchase agreement with Konspol Holding, a subsidiary of the Cargill group, with a view to acquiring the Konspol brand in Poland and its Nowy Sacz plant, which generated sales of 35 million euros in 2023.

Copyright (c) 2024 All rights reserved.