(Paris) Stock markets welcomed US employment figures on Friday, pointing to a deceleration in wage growth in December, which could lead the Federal Reserve to ease its monetary tightening.
In Paris, the star CAC 40 index rose 1.47% to 6860.95 points, its highest closing since the start of the war in Ukraine. London ended up 0.87% to a 3-year high and Frankfurt gained 1.20%, its balance for the week approaching 5%.
While the European indices have focused this week on the reopening in China and the drop in energy prices, on Wall Street investors are instead trying to see how far the American central bank (Fed) will raise its rates.
In New York, the Dow Jones finished up 2.13%, the NASDAQ index, 2.56%, and the broader S&P 500 index, 2.28%.
The US unemployment rate fell in December to 3.5%, a sign of the resilience of the labor market, but what was especially exciting was the lower increase in the average hourly wage (+4.6% compared to to December 2021, compared to +4.8% in November).
“It’s a win-win for the Fed, with wage increases easing while the job market remains stable,” commented Peter Essele of the Commonwealth Financial Network.
The momentum initiated by the employment report was fed, a little later, by another indicator, the ISM index, which showed that activity in services in the United States had contracted in December, for the first time since May 2020.
“We are still in a context where bad (economic) news is welcomed,” explained Nick Reece of Merk Investments, with signs of a weakening US economy that could encourage the Fed to ease off.
For the analyst, the New York market was more sensitive to the ISM than to the employment report, “because it was well below what was expected and below 50” (49.6%) , indicating a contraction in activity.
“That’s what drove down (bond) rates and pulled the stock market,” he said.
The yield on 10-year US government bonds fell sharply to 3.56%, from 3.71%.
As for the 2-year rate, which is more sensitive to monetary policy expectations, it dropped 20 basis points (0.2 percentage point), a rare drop in the bond market, at 4.25%.
Techno at the party
After a sluggish start, all of tech got going, driven by a hunt for bargains and the prospect of a more favorable interest rate environment for the significant financing the sector needs to develop.
Apple (+3.68%), Amazon (+3.56%) and graphics card maker Nvidia (+4.16%) were all celebrating.
Even Tesla, after initially falling to its lowest level in almost two and a half years, managed to take the suction (+2.47% to 113.06 dollars).
On the side of oil and currencies
The dollar was widening its losses on Friday, with US jobs numbers for December pointing to a slowdown in wage increases, easing inflationary pressures and opening the door for a slower rate hike from the Federal Reserve (Fed ).
Around 4:45 p.m. (ET), the greenback was down 1.14% at 1.0643 dollars per euro, after hitting a near-month high of 1.0484 before the report was released. dollar.
Oil prices stalled on Friday after a volatile session between the rebound on Wall Street, the uncertain situation in China and the shutdown of a pipeline in the eastern United States.
A barrel of Brent from the North Sea for delivery in March fell 0.15% to 78.57 dollars.
Its American equivalent, a barrel of West Texas Intermediate (WTI) for February delivery, climbed 0.13% to 73.77 dollars.