By Barbara Kollmeyer
European stocks slipped Friday, after a monthly U.S. jobs report that fell short of expectations and following a mixed batch of data from the single currency region ahead of next week’s European Central Bank meeting.
The Stoxx Europe 600 index (STOXX:XX:SXXP) was down 0.2% to 473.51, and was set to log a gain of almost 0.3% for the week. On Thursday, the index closed 0.2% off its record close of 475.83 reached on Aug. 13. The German DAX (XEX:DX:DAX) was flat, the French CAC 40 index (PAR:FR:PX1) fell 0.5% and the FTSE 100 index (FTSE:UK:UKX) was up 0.2%.
The pound (XTUP:GBPUSD) and the euro (XTUP:EURUSD) were both up about 0.1% against the dollar.
U.S. jobs data for August showed an employment gain of 235,000 , far below the forecast for 720,000 new jobs, which may push out the Federal Reserve’s path to unwind its easy-money strategy and potentially shake up global equities. The data also included an upward revision for July jobs to more than 1 million.
In Europe, a final reading of the August eurozone IHS Market service sector purchasing managers index was revised down to 59.0, from a preliminary 59.7 and below the 59.8 in July. A reading above 50 indicates an expansion an activity, while below this threshold signal
Elsewhere, data showed eurozone retail sales falling in July after rising the previous two months as economic reopening effects faded and consumers began to spend more on services.
The data come ahead of next week’s meeting of the European Central Bank, which comes against a backdrop of rising prices, notably in Germany. “After an overly dovish summer, ECB hawks are sending signals to the market. They are pushing for some kind of exit strategy,” said Saxo Bank’s chief investment officer, Steen Jakobsen, who explained in a note to clients how that may evolve next week.
“The ECB will mostly upgrade its staff macroeconomic projections and discuss the pace of bond purchases for the last quarter of this year, which should be slower than previously, given that the ECB had already declared the intent to “front-load” purchases earlier this year,” he said.
Among stocks on the move, Ashmore Group (LON:UK:ASHM) was one of the Stoxx 600’s worst performers. The U.K. investment manager that focuses on emerging markets reported higher pretax profit for fiscal 2021, and expressed confidence about the year ahead, but underlying earnings before interest, taxes, depreciation and amortization fell short of consensus. Shares fell over 3%.
“In our view, the investment case for Ashmore today is little changed — there is still significant potential to outperform in the coming years, with improving longer-term investment performance a critical support,” said Stuart Duncan and Robert Sage, analysts at Peel Hunt, who rate Ashmore a buy.
Among the gainers, shares of Allfunds Group (AMS:NL:ALLFG) , which reported a first-half rise in assets under management and revenues. Allfunds began trading as a public company in Amsterdam in April.
French stocks were pressured by a nearly 1% drop in shares of luxury group LVMH Moet Hennessy Louis Vuitton (MIL:IT:LVMH) and a similar fall for multinational aerospace company Airbus (PAR:FR:AIR) . German stocks were supported by a 1.7% rise for multinational conglomerate Siemens (ETR:XE:SIE) .
AstraZeneca shares (LON:UK:AZN) (NAS:AZN) rose 0.6% after the pharmaceutical company said it had reached a deal with the European Union for millions more COVID-19 vaccine doses by early 2022, ending months of litigation between the two over shortages that initially slowed the rollout of the region’s vaccination programs.
Swedish automaker Volvo (OME:SE:VOLV.B) warned of a weaker second half, citing shortages of semiconductor components and other materials that forced a temporary halt of production at facilities in several countries. But the company said annual targets for continued growth in sales volume and revenue remained intact. Shares rose 1.6%.