It was a relatively bullish end to the week for the European majors on Friday.
The DAX and the EuroStoxx600 rose by 0.39% and by 0.37% respectively, with the CAC40 gaining 0.12%.
While disappointing economic data from the Eurozone pegged the majors back, it was stats from the U.S that provided direction.
A pickup in wage growth and rise in nonfarm payrolls delivered support. For the FED, a more modest rise than the ADP numbers from Thursday may have eased pressure for a more immediate move. This was also a positive for riskier assets, with market angst over the need for an immediate move by the FED easing for now.
It was a quieter day on the economic data front. Eurozone retail sales figures were in focus.
In April, retail sales fell by 3.1%, month-on-month, reversing most of a 3.3% increase from March. Economists had forecast a more modest 1.2% decline.
According to Eurostat,
- The volume of retail trade decreased by 5.1% for non-food products and by 2.0% for food, drinks, & tobacco.
- There was a 0.4% increase in automotive fuel sales, however.
- Slovenia (-10.4%) and France (-6.0%) logged the largest declines in April.
- Portugal (+4.3%), Latvia (+3.8%), and Lithuania (+3.7%) recorded the largest increases in April.
- Compared with April 2020, retail trade had jumped by 23.9%.
- Year-on-year, automotive fuel sales surged by 65.5%, non-food products by 42.6%, and food, drinks & tobacco by a modest 3.3%.
- Luxembourg (+46.1%) and France (+42.1%) recorded the highest annual increases in retail trade.
From the U.S
It was a busier day on the economic calendar, however.
Nonfarm payrolls increased by just 559k in May, falling well short of the ADP’s figures. Economists had forecast a 650k increase following April’s modest 278k rise.
A fall in the participation rate and increase in payrolls supported a fall in the unemployment rate.
In May, the U.S unemployment rate fell from 6.1% to 5.8%. This was not enough to continue supporting tapering bets, however.
The Market Movers
For the DAX: It was a mixed day for the auto sector on Friday. BMW rose by 0.96% to buck the trend. Continental slipped by 0.06%, with Daimler and Volkswagen ending the day down by 0.40% and by 0.46% respectively.
It was a bearish day for the banks. Deutsche Bank and Commerzbank ended the day with losses of 0.81% and 1.09% respectively.
From the CAC, it was a mixed day for the banks. BNP Paribas and Soc Gen fell by 0.57% and by 0.86% respectively, while Credit Agricole rose by 0.32%.
It was a mixed day for the French auto sector. Stellantis NV rallied by 2.80%, while Renault fell by 1.95%.
Air France-KLM followed Thursday’s 4.64% slide with a 2.43% loss, while Airbus SE eked out a 0.13% gain.
On the VIX Index
It was back into the red for the VIX on Friday, marking just a 2nd fall in 5 sessions.
Reversing a 3.20% gain from Thursday, the VIX fell by 8.98% to end the day at 16.42.
The NASDAQ rallied by 1.47%, with the Dow and the S&P500 ending the day up by 0.52% and by 0.88% respectively.