European stocks and U.S. equities futures were under pressure on Friday, following a big loss for Wall Street after Federal Reserve Chairman Jerome Powell revealed that the central bank was not ready to halt long-term bond yields.
Investors are also looking out for U.S. jobs data to be paid for later.
Adhering to a weekly gain of 0.8%, the Stoxx Europe 600 SXXP,
fell 0.8% to 408.24. The index slipped 0.4% on Thursday. The German DAX DAX,
and French CAC 40 PX1,
fell 1% each and the FTSE 100 UKX,
lost 0.8%. The euro EURUSD,
and GBPUSD pound,
both fell like the DXY dollar,
strengthened.
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US stock futures ES00,
YM00,
NQ00,
he said sales sentiment was not going away after Thursday’s technology-driven approach. Powell told the Fed that a chaotic move in the bond market would be worrying, but did not suggest that the central bank was still scared, in comments made at The Wall Street Journal Jobs Summit.
Investors are concerned that bond yields will continue to soar amid similar concerns and, consequently, weight stocks.
“The markets were asking for suggestions on what the central bank would do if the situation got worse, and when that didn’t happen, equities hit,” Connor Campbell, Spreadex’s financial analyst, said in a note to clients. “That has been brought into the European open, confirming that the hope of reversal that opened the week (and month) has completely vanished. ”
Bands were still under pressure. Yield on 10-year Finance note TMUBMUSD10Y,
moving forward at one-year highs of 1.54%, while yields for Germany’s 10-year TMUBMUSD10Y,
bundled up one base point to -0.297%, a level not seen since nearly June last year.
Upcoming economic data later is expected to show that 210,000 U.S. jobs were added last month, according to economists surveyed by Dow Jones and The Wall Street Journal. In Europe, German manufacturing orders rose 1.4% better than expected in January, following a revised fall of 2.2% in December.
As European stocks moved, weakness spread across almost every region, with airline stocks under pressure. Shares of Deutsche Lufthansa LHA,
IAG International Converged Airlines,
which operates British Airways and other carriers, and Ryanair RYAAY,
RYA,
down more than 3% each.
Energy companies failed to get lift from CL00 crude futures,
up more than 1%. U.S. prices reached their highest end since 2019 on Thursday, after the Organization of Petroleum Exporting Countries and its allies said they would release conventional output cuts until the end of April. Royal Dutch Shell shares RDSA,
RDS.A,
fell 0.6% and those for BP BP,
BP,
they were almost taller.
Dassault Aviation AM,
shares fell 3%, after French aircraft manufacturer said profit and revenue fell in 2020 as the aviation industry continues to struggle under the pressure of a pandemic COVID-19. Dassault said it said higher sales are expected in 2021. Shares of rival Airbus AIR,
pretty much the same thing happened.
Shares of the London LSEG Stock Exchange,
fell 5%. The exchange operator said pretax 2020 profit rose 5.2% on the back of higher revenues, and confirmed more shares. But net profit came in at 5% lower than consensus on heavier tax expense, noted Citi analyst Andrew Coombs.
“2021 revenue management appears to be in line with expectations, but cost management appears to be heavier than expected. There is also no update on existing financial targets. Overall, the set of results is disappointing, ”Coombs said in a note to clients.