The publication on Friday May 3 of US employment figures, down in April, but also of positive corporate results, gave a boost to the world’s stock markets, which opened on Friday. French luxury goods stocks are benefiting.
The week ended rather well for the world’s stock markets.
Buoyed by good corporate results and the eagerly-awaited publication of U.S. employment figures, European indices opened higher on Friday, somewhat offsetting the week’s losses.
At the opening, after three days of decline, Paris gained 0.37%, Frankfurt 0.52% and London 0.30%. And just after 2.30 p.m., the CAC 40 was up 1%, and the Dax 0.56%. But they were still down on the week, by 1.54% for Paris and 1.11% for Frankfurt.
The London Stock Exchange, meanwhile, was up 0.82% at 2.30 p.m., representing a five-day gain of 2.2%.
US employment report crucial for the economy
All observers of the financial world were eagerly awaiting the April US employment report, due at 12.30 pm GMT. This report sets the tone for the Federal Reserve’s monetary policy, which is crucial for the global economy.
In the end, the world’s leading economy created just 175,000 jobs in April, instead of the 240,000 anticipated by the Bloomberg consensus, and after 330,000 in March. As a result, instead of stabilizing, the unemployment rate is expected to rise by 0.1 points, to 3.9% of the workforce, and average hourly wage inflation to stabilize at 0.3% month-on-month, down 0.4% year-on-year.
These data reassured the world’s stock markets, which were not closed on Friday.
In addition to the positive trend on European stock markets, Wall Street’s main indices are also expected to gain more than 1%.
In Paris, the CAC 40 was also buoyed on Friday by the publication of better-than-expected quarterly results by two French banks. Société Générale and Crédit Agricole, and by the soaring sales (+11.1%) of billboard specialist JCDecaux. Their shares rose by 5.5%, 3.9% and 11.1% respectively!
Highs and lows for luxury goods
In the luxury goods sector, while the publication of results for the leading French trio (Lvmh, Kering, Hermès) ended on Thursday April 25 with a very good performance by Hermès, it was a mixed week for these stocks on the stock market.
Paradoxically, the saddler’s stock had been badly hit in the wake of its good results, falling -1.2% on April 25. After continuing on a slippery slope on April 29 (-2.21%) and 30 (-2%), Hermès only regained favor with the CAC 40 on May 2 (+0.45%). On May 3, it was up +2.23% around 3:15pm. It was still down 2.7% over the past week. However, since January 1, 2024, it has remained very buoyant (+19.08%).
Small comfort for Kering
Kering was also able to taste some comfort mid-week. François-Henri Pinault’s group had been heavily punished on the stock market on April 24, with a 6.45% decline, following the publication the previous day of a poor first quarter 2024, worse than analysts’ forecasts. This week, Kering shares fell by a further 0.68% and 1.68% on April 29 and 30. But it recovered slightly on May 2 (+0.72%) and even more so on May 3, with a rebound of +2.51% at around 3:15 pm. Since January 1, 2024, however, it is still down 16.8%!
The Lvmh share had to wait until May 3 to regain its momentum (+2.67% around 3.15pm) after three declines at the start of the week, on April 29 and 30 and May 2 (-1.64%, -0.62% and 0.96%). The luxury goods champion was still down 1.27% on the week, but up +6.61% since the beginning of 2024. In mid-April, Lvmh had published respectable results (with organic growth of +3%) for the first quarter of 2024.
Good corporate results on Wall Street
On Wall Street, the New York Stock Exchange finished higher on Thursday May 2.
The Dow Jones index gained 0.85% to 38,225.66 points, while the broader S&P-500 was up 0.91% to 5,064.20 points, and the Nasdaq Composite, the index of technology stocks, was up 1.51% to 15,840.96 points,
Among these tech giants, Apple’s results were eagerly awaited. The American giant’s sales may have fallen by 4% (and even 10% for its iPhone!) in the first quarter, but they exceeded analysts’ forecasts. The share price of the king of Smartphones, which also announced a return to growth for the quarter, rose by 7% in the wake of its results.
Generally speaking, 77% of companies that published their results in the US exceeded expectations, according to the financial company LSEG.
In addition to this positive trend in corporate performance, analysts also pointed to the comments made by the Fed Chairman the previous day, Wednesday May 1, which they perceived as more accommodative than they had feared.
Indeed, Jerome Powell seemed to rule out any further rate hikes by the US central bank. It remains to be seen whether this doctrine will evolve further in the light of Uncle Sam’s latest unfavorable employment figures for April…
Positive series in Asia
In Asia, the MSCI index of Asian and Pacific stocks (excluding Japan) continued its positive run of almost two weeks. It gained 1% on Friday, thanks in particular to Hong Kong’s Hang Seng index. The latter closed up 1.5%, marking a ninth consecutive day of gains and the longest winning streak since January 2018! This good news is explained by the perception of economic improvement in China, to which government policy, via reforms in particular, is being applied.
Japan’s Nikkei index, on the other hand, closed down 0.1% on Thursday May 2. To commemorate Constitution Memorial Day, the national holiday marking the promulgation of the 1947 Constitution, the Japanese stock market is closed this Friday.
In mainland China, the markets have also closed, but for a longer period, as Labor Day, a precious vacation in communist countries, is celebrated from May 1 to 3…
Weak dollar
On the currency front, the dollar was down Friday morning by 0.05% against a basket of reference currencies, its worst weekly performance (-0.7%) in two months.
The US currency was thus impacted by the yen’s rebound. Whereas the dollar was worth 160 yen at the start of the week, it fell back to around 153.03 yen on Friday, following a probable intervention by the Japanese authorities on the foreign exchange market.
The euro, on the other hand, remained stable (+0.08%) at $1.0734. Sterling was up 0.14% at $1.2548.
Lastly, oil prices were up slightly at the end of the week, as production restrictions by OPEC countries are expected to be extended beyond June.
On Friday morning, Brent crude gained 0.23% to $83.86 a barrel, and West Texas Intermediate (WTI) 0.22% to $79.12 a barrel. But for the week as a whole, the trend was clearly downwards, with Brent down 6.3% and WTI down 5.6%. This was their biggest decline in three months!
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Read also > [STOCK MARKET UPDATE] PARIS STOCK EXCHANGE RISES ON GENERALLY POSITIVE QUARTERLY RESULTS
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