Europe midday: Shares flat as investors eye US payrolls data

By Frank Prenesti

European shares were flat at midday on Friday on weaker US and Asian markets, with investors turning their attention to the weekly US nonfarm payrolls report.
The pan-regional Stoxx 600 index had barely moved the needle, with major bourses mixed. Minutes from the European Central Bank’s last meeting released on Thursday highlighted worries about the surging inflation in the euro zone and the need for aggressive rate rises to bring it under control.

“These slips are squarely the result of gathering recessionary fears, as markets set their sights on US jobs dater due later on,” said Hargreaves Lansdown analyst Sophie Lund-Yates.

“The reason this data set is a big one, arguably the biggest since markets began to unravel, is because the data will show if the Fed’s enthusiastic interest rate hikes are now being felt in the jobs market.”

“Today’s news will shape the Federal Reserve’s monetary decision in November. As a leading economic indicator, jobs data is a crucial barometer for the health, and future movements within the economy. While things on this front at least have looked stronger than feared over recent months, the concern is that the wheels are about to come off.”

In economic news, German retail sales edged higher last month if changes in prices are not taken into account.

According to the Federal Office of Statistics, in seasonal and calendar adjusted terms, retail sales rose at a month-on-month pace of 0.1% in August against a consensus view of -1.0%). In comparison to the year earlier period they were 5.4% higher.

However, once price changes are taken into consideration sales were in fact 1.3% lower on the month and by 4.3% in annual terms.

In equity news, chipmakers fell after South Korea’s Samsung and US chipmaker Advanced Micro Devices reported disappointing earnings and forecasts.

Infineon, STMicroelectronics, BE Semiconductor, ASML and ASMI were all lower.

Credit Suisse surged after the bank said it would buy back up to $3bn of senior debt securities, making a show of strength as it seeks to reassure investors after a tumultuous week.

Pub group Wetherspoons traded up after saying it narrowed annual losses and that like-for-like sales in the first nine weeks of the current financial year were up 10%. The company posted a loss of £30.4m before tax and exceptional items compared with a £167m loss in 2021 when Covid lockdowns were in place.

Reporting by Frank Prenesti at Sharecast.com

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