Euro zone bond yields and stocks leapt on Friday after data showed US jobs growth was stronger than expected in September, weakening the case for further outsized interest rate cuts from the Federal Reserve.
As the EU voted to boost tariffs on electric vehicles from China, French president Emmanuel Macron said Europe’s economic model “needs to be reset”.
Dublin
In banking, AIB rose 1.2 per cent to €4.87 a share and Bank of Ireland rose 1.08 per cent to €9.38. Permanent TSB rose marginally by 0.59 per cent to finish at €1.70 at the close of the market on Friday.
Ryanair rose by 2.94 per cent to €16.47. Construction group Kingspan also finished in the green, rising 1.11 per cent to €81.75. Irish Continental Group fell by 1.45 per cent to €5.44. Food suppliers Kerry Group fell 0.77 per cent to €90.40 a share. Glanbia rose slightly by 0.27 per cent to finish at €14.86.
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London
The FTSE 100 finished slightly down after a mixed day on Friday, as rising oil prices and strong US jobs figures prevented deeper losses.
London’s blue-chip index fell 0.02 per cent.
The FTSE was lifted by NatWest, Barclays and Lloyds all being among the top risers, as non-farm payroll figures showed the US economy gained 254,000 jobs last month, beating analyst expectations of 147,000.
The numbers helped ease any lingering fears of a US recession, pushing UK bank stocks up in the process.
Susannah Streeter, head of money and markets at Hargreaves Lansdown, said: “With companies remaining positive and hiring more staff, and fresh interest rate cuts in sight, hopes are rising that the US economy will be blessed with a goldilocks scenario, with growth being maintained, as inflationary pressures are tamed.
“The brighter picture emerging for the US economy has also lifted shares in London, with the internationally focused FTSE 100 reversing earlier losses.”
Meanwhile, Brent Crude futures were up 0.657 per cent to $78.130 as ongoing clashes between Israel and Iran this week added to fears of supply issues.
Europe
The European Union unleashed one of its most powerful economic tools on China, imposing tariffs on electric vehicles in a move that increases the risk of retaliatory measures and backfiring on domestic consumers and companies.
The EU voted on Friday to boost tariffs as high as 45 per cent, arguing that Beijing provides unfair subsidies to its carmakers. While the bloc is aligning with the US’s more aggressive approach to taking on Chinese trade practices, the latest move intends to comply with World Trade Organisation rules.
French president Emmanuel Macron warned this week that Europe’s economic model “needs to be reset”, and failure to account for the US and China’s greater domestic investment and market protections could be an existential threat for the EU. The bloc’s leaders are expected to unveil a new competitiveness roadmap next month.
New York
The case for strong US economic growth got a boost on Friday after labour market data came in far above expectations. The S&P 500 is up 20 per cent this year-to-date and stands near record highs despite recent tumult spurred by rising geopolitical tensions in the Middle East.
A key test for the rally will arrive as corporate results begin rolling in next week. Companies need to post healthy profit growth and strong outlooks for next year to sustain valuations that have crept up in recent months: At 21.5 times future 12-month earnings estimates, the S&P 500 is trading near its highest level in three years and is well above its long-term average of 15.7, according to LSEG Datastream.
S&P 500 earnings are expected to have climbed 4.7 per cent in the third quarter from a year earlier, UBS equity strategists said in a report on Wednesday. However, earnings likely grew 8.5 per cent when factoring in the historical rate of positive earnings surprises, they said.
Data on US consumer prices due next week will give investors another snapshot of the economy. A stronger-than-expected number, on the heels of Friday’s jobs data, could further curtail expectations for how much the Federal Reserve is expected to cut rates in the coming months.
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