Wall Street higher on positive US jobs data and strong Apple results
A look at how the major markets are performing on Friday
All three indexes in the US opened in the green following a stronger-than-expected US jobs report and upbeat earnings from Apple, while the FTSE 100 and European stocks remained higher at market close as investors also digested new economic data.
The Dow Jones (^DJI) rose 1.13% to 33,502.45 points, while the S&P 500 (^GSPC) climbed 1.06% to 4,104.12 points. The tech-heavy NASDAQ (^IXIC) also gained- by 1.07% to 12,094.89.
FTSE 100 and European stocks
Across the pond, investors continued to assess the impact of rate hikes by the European Central Bank (ECB) and US Federal Reserve.
Traders also considered the impact of European Central Bank (ECB) inflation projections and April construction purchasing managers' index (PMI) figures – which showed the UK sector growing, despite the weakest house building activity in almost two years.
At market close, the FTSE 100 (^FTSE) was up 1.01% to 7,780.40. The CAC 40 (^FCHI) in Paris also closed higher - by 1.31% to 7,436.94 points – and in Germany, the DAX (^GDAXI) was up 1.42% to 15,956.92.
“After slumping to a one-month low on Thursday, the FTSE 100 was trading higher lifted by British Airways’ parent company IAG which has taken to the skies following first quarter earnings,” Victoria Scholar, head of investment at Interactive Investor, said.
BP was also at the top of the FTSE 100 basket after the energy giant reported a first-quarter profit of $4.96bn this week, which beat analysts’ expectations of $4.3bn.
Read more: UK construction output rises in April as house-building drag intensifies
In Asia, the major markets were mixed overnight with mainland Chinese markets slipping after a weak Caixin services PMI reading for April.
Tokyo’s Nikkei 225 (^N225) gained 0.12% to 29,157.95 points, while the Hang Seng (^HSI) in Hong Kong rose 0.49% to 20,046.91. In mainland China, the Shanghai Composite (000001.SS) was in the red, down 0.61% to 3,329.51 points.
The pound (GBPUSD=X) gained against the US dollar by 0.50% to 1.26 as traders opted for the currency amid fresh concern in the US banking sector. Against the euro, the sterling (GBPEUR=X) also rose, by 0.18% to 1.14.
In commodities, crude prices edged higher on Friday after losing ground this week.
US crude oil, or West Texas Intermediate (CL=F), rose 1.14% to $69.34 a barrel, while Brent crude (BZ=F) gained 1.19% to $73.36 a barrel.
“However, oil is still on track for its third week of losses reflecting uncertainty about the global economic outlook and the threat of weaker demand, particularly from China,” Victoria Scholar, head of investment at Interactive Investor, said.
Read more: Oil prices edge higher but on track for third week of losses
The monthly US employment report, or non-farm payrolls, was released on Friday showing how many jobs the country’s economy created in April. It showed that 253,000 jobs were added, well above expectations of 185,000.
“Anyone hoping that we were going to get an indication on the future outlook of US interest rate policy from the monthly United States employment report has had their hopes dashed because the headline jobs number has provided all the help that the Fed could have needed to bide their and wait for clarity from more future economic data releases,” Jameel Ahmad, chief analyst at CompareBroker.io, said.
Ahmad further noted that the headline number does not provide substance to support the view that the fastest cycle of US interest rate increases in a generation would lead to a sharp loss of life for the US employment sector.
“This can be seen even more clearly from the unemployment rate coming in at 3.4%, below expectations of 3.6%,” he added.
Meanwhile, investors were also taking in the latest activity data in Britain's construction sector, which increased in April.
The S&P Global/CIPS UK Purchasing Managers' Index for the construction industry came in at 51.1 in April, up from 50.7 in March.
However, growth was lopsided as residential house-building suffered its steepest decline since May 2020 as a result of weaker demand and higher mortgage rates.
Also on Friday, the European Central Bank released its quarterly Survey of Professional Forecasters, a key input in policy deliberations.
It revealed the ECB now sees 2023 inflation at 5.6%, down from the 5.9% expected three months ago, while the 2024 projection was cut to 2.6% from 2.7%.
The 2025 figure was lifted to 2.2% from 2.1% and the "longer term" figure, which refers to 2027, was kept at 2.1%.
Furthermore, retail sales in the eurozone were also released by Eurostat.
The data showed retail sales volumes in the 20 nations sharing the euro currency fell by 1.2% in March from the previous month, outpacing the 0.1% drop seen in a Reuters poll of economists.
The sports retail giant reported first quarter sales of €5.27bn on Friday, beating analysts’ expectations. Adidas (ADS.DE) put it down to strong demand for the Terrace shoe as well as the Samba and Gazelle.
Meanwhile, its operating profit hit €60m, quadrupling consensus forecasts for €15m. However, it reported a net loss from continuing operations of €24m – and gross margins declined.
“There appears to be green shoots of optimism for the sportswear giant which is still reeling from the Yeezy / Kanye West crisis after its partnership with Ye ended last year. This resulted in a €400m dash to sales, hitting North America hardest and leaving Adidas with a huge pile of unsold shoe inventory,” Scholar commented.
Adidas also said it has been struggling with cost inflation and the softening consumer backdrop, which has led to greater discounting.
“Although shares fell sharply in October after its Yeezy deal terminated, shares have been rebounding over the last six months. Investors are also optimistic about new CEO Bjørn Gulden thanks to his impressive CV including his recent nine-year term at Puma at which he helped spearhead the brand’s revival,” Scholar added.
Watch: Apple results better than expected amid shaky economy
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