In a week marked by the publication of various macroeconomic data in the world’s largest economy, the market was particularly anxious to know Friday’s figure, since it was the same one that triggered the stock market storm in early August due to fears of a recession in the United States. The August employment report did not have the same impact as last month, but the general sentiment was once again one of nervousness over the weakness of North American employment, and this was reflected in the same way in the stock markets. In a week that has had in red the main parquet floors here and across the Atlantic, the ibex 35 expands muscles and it is the Stock Exchange which lost the least over these five days, with a weekly drop of 2.01% against 4.44% for the EuroStoxxthus reiterating its position as the most bullish index of the year, with 10.6%, which surpasses the Milan Stock Exchange. On Wall Street, S&P 500 and Nasdaq 100 record worst week of the year, with data at the end of Europe.
The August jobs report showed that 142,000 nonfarm jobs were created that month, a figure volume lower than expected. Although the report also said unemployment fell by a tenth, to an expected rate of 4.2%, the general sentiment is one of concern over the weakness in North American employment and this mixed tone was cited in stock markets on Friday.
This shared sense of weakening puts more pressure on the Federal Reserve to make its first interest rate cut, which will come at its September meeting, to 50 basis points instead of the usual 25. Indeed, Jerome Powell said in his speech at Jackson Hole that the central bank was once again more concerned about the deteriorating labor market than controlling inflation, and these data tilt the balance a little more toward a sharper cut.
The odds that the Fed will deliver a 50-basis-point rate cut are similar, rising to 47% on Friday from 39% on Thursday. “Friday’s employment report shows that the labor market remains at a solid, if slower, pace, giving the Fed room to cut interest rates by 25 or 50 basis points at its September policy meeting. The Fed’s decision on the depth of the crisis Whether rates will start to be cut in September will also depend on the August CPI report, which will be released next week. We expect stock market volatility to remain high and a lot of that depends on the data and headlines leading up to and during the presidential election,” BMO analyst Carol Schelin said in remarks obtained by Bloomberg.
Let’s return to the performance of the main indices, and as expected, the weekly decline of more than 5% of the S&P 500 and almost 6% of the Nasdaq 100, with data at the European close, leads it to record its worst annual week. For the year, the balance of the S&P is about 13.5% and the technological balance is about 10%.
In Europe, the main Spanish benchmark has already gained twice as much as the EuroStoxx since the beginning of the year, with a rise of 10.6% compared to 4.79% for the pan-European benchmark. Despite the latest corrections, the only negative stock market of the year is the French CAC, with -2.53% in 2024.
Puig falls by more than 10%
The Ibex 35 managed to close the week with fewer losses than its European counterparts despite the strong setback of Puig, which lost up to 13% in the session after its first results as a listed company.
The net profit of the Catalan premium beauty company contracts up to 26% over one year going from the 209 million euros recorded in the first half of 2023 to the 154 million it achieved during this first half of 2024. All this, even though sales increased by almost 10% to 2,171 million euros.
Over the week, Puig has lost 15% and is, by far, the most bearish company in the index. The high-end beauty company is followed by Grifols and Banco Sabadell, with declines of more than 6% in both cases. On the other side of the table, in a week that has not brought much joy to the stock markets, are Inmobiliaria Colonial, with an increase of almost 6%, Merlin, with almost 4% per week, and Acciona Energía, which scores around 6%. 3.5% in the last five days.
In addition to Puig, Nvidia was another of the stars of the week, and not thanks to its good data. The technology giant has lost more than 13% in the last five days and suffered on Wednesday the biggest loss of market capitalization ever seen in a session for a US company. With the signing of processors, other companies in the sector such as Taiwan Semiconductor Manufacturing and SK Hynix, in Asia, were dragged down, which led the Nikkei, the main Japanese reference, to lose more than 4% in a single session and mark the worst session since the big crash in August. ASM International or ASML Holding were one of the most affected companies in the segment in Europe, ending the week among the most bearish, along with oil companies.
Oil also suffered sharp declines this week (down more than 10% over five days) and its price reached its lowest level of the year, at 70.7 dollars per barrel. The price of crude oil fell due to the forecast of a surplus in the second half of the year due to the slowdown in demand and the constant increase in supply in America (USA, Guyana, Canada…).
