LONDON — European stocks gave back earlier gains by the end of the session Friday, as markets reacted to a surprisingly strong U.S. jobs report.
The pan-European Stoxx 600 closed flat, having earlier climbed more than 0.7%. Autos added 1.1% to lead gains while oil and gas stocks fell 1.4%.
The easing came after the U.S. Labor Department's January jobs report showed employers added 353,000 positions to the payroll, well above expectations of 185,000 in a Dow Jones survey of economists. The upside surprise casts doubt over market hopes for an imminent interest rate cut from the Federal Reserve.
On Wednesday, the Fed left policy unchanged and Chair Jerome Powell poured cold water on speculation about a potential first interest rate cut in March.
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The Bank of England on Thursday held interest rates steady with an unexpected split vote that highlighted the tricky outlook for policymakers as inflation moves closer to target.
Preliminary inflation data for the euro zone on Thursday revealed the annual increase in the headline consumer price index eased slightly in January, while core figures declined less than expected and services inflation held steady.
Corporate earnings have been a key driver of individual share price movement in Europe throughout the week, with the likes of Deutsche Bank, BNP Paribas, Adidas and Volvo Cars making significant moves on Thursday.
Money Report
Friday was quieter on the earnings front, with Spain's CaixaBank among the biggest names reporting. No major corporate earnings or economic data releases are due from Europe.
U.S. stocks open mixed
U.S. stocks were mixed in early deals Friday following the release of fresh economic data and company earnings.
The Dow Jones Industrial Average dipped 0.3% while the S&P 500 rose 0.4%. The tech-heavy Nasdaq also rose 0.9%, with Meta shares leading the charge, up 17% after announcing its first-ever dividend.
— Karen Gilchrist
European rally fizzles after U.S. jobs surprise; Fed March rate cut 'must be off the table'
The European stocks rally of Friday lost momentum by the middle of the afternoon, after the January nonfarm payrolls report showed the U.S. labor market remained surprisingly strong.
The pan-European Stoxx 600 was up 0.3% by mid-afternoon, after climbing more than 0.7% earlier. Autos added 1.8% to lead gains while mining stocks fell 0.8%.
The easing came after the U.S. Labor Department's January jobs report showed employers had added 353,000 positions to the payroll, well above expectations near 185,000, according to a Dow Jones survey of economists.
The resilience of the labor market casts doubt over whether the Federal Reserve could cut interest rates sooner rather than later.
"On the basis of today's jobs report, there is absolutely no sign of a softening labour market or weakening wage pressures. It wasn't just a strong January, it turns out that previous months were stronger than initially believed," said Seema Shah, chief global strategist at Principal Asset Management.
"Throw in the sharp move higher in average hourly earnings and Fed officials must be wondering if their rate hikes have had any impact on the economy. The dramatic upside surprise to both jobs and wage growth means that a March rate cut must be off the table now, and a May cut is also now potentially on ice."
- Elliot Smith
Superdry shares soar more than 100% as company mulls going private
Superdry shares soared more than 100% on Friday as the embattled British fashion retailer confirmed that co-founder and CEO Julian Dunkerton is considering taking it private.
A recent slump in sales and a falling share price have led to speculation that Superdry, which listed on the London Stock Exchange in March 2010, may become a takeover target.
The company confirmed in a market update on Friday that Dunkerton had requested "permission to begin exploring the possibility of making an offer for the company," and to begin talks with potential financial backers, which the company accepted.
- Elliot Smith
European stocks extend gains
The pan-European Stoxx 600 was up 0.7% by early afternoon, with autos adding 1.9% to lead gains as most sectors and major bourses advanced. Oil and gas bucked the positive trend to fall 0.5%.
Delivery Hero down 9% even as company labels report of Grab deal collapse 'false'
Shares of German food delivery company Delivery Hero fell more than 10% to a record low on Friday, after a media report suggested that talks over the sale of its Southeast Asian business had collapsed.
The shares recouped some of the losses by around noon London time, as the company put out a statement insisting the report was "false," before sliding once again.
Citing sources familiar with the matter, Malaysia's New Straits Times reported that Delivery Hero and Singapore-based Grab could not agree on a valuation for the former's Foodpanda business.
Delivery Hero promptly responded with an ad hoc market update.
"On September 20, 2023, Delivery Hero had confirmed negotiations regarding a potential sale of its foodpanda business in selected Southeast Asian markets covering Singapore, Malaysia, the Philippines, Thailand, Cambodia, Myanmar and Laos," the company said.
"There are market rumors that the negotiations for the Potential Sale have collapsed. We confirm that the negotiations for the Potential Sale are ongoing, and, thus, the rumors are false."
The stock price fall comes after Delivery Hero shares plunged on Tuesday, as the company announced that it would sell its minority stake in British rival Deliveroo at a loss.
-Elliot Smith
Biggest movers: Vallourec up 8%, Danske Bank up 6%, Electrolux down 5%
Vallourec shares jumped around 8% in early trade on Friday to notch a 10-month high after the French steel tubes maker estimated that its full-year earnings would surpass its prior forecasts.
Danske Bank shares jumped around 6% after the Danish lender announced a new share buyback program.
At the bottom of the Stoxx 600, Electrolux shares fell more than 5% after the Swedish home appliance company said it expects consumer sentiment to remain weak in early 2024.
- Elliot Smith
European stocks open higher, led by autos
The pan-European Stoxx 600 was up 0.4% in early trade, with autos adding 1.6% to lead gains as most sectors and major bourses advanced. Oil and gas bucked the positive trend to fall 0.8%.
Here are the opening calls
Britain's FTSE 100 is set to open around 50 points higher at 7,672, Germany's DAX is seen around 107 points higher at 16,966 and France's CAC 40 is expected to add around 31 points to 7,620, according to IG data.
CNBC Pro: Family offices are booming. Here's where they're putting their money now — and in the next 5 years
Family offices have boomed in the last few years, thanks in part to the growing number of wealthy individuals.
There's been a surge in "extreme" wealth in the last three years alone.
UBS told CNBC Pro that "family offices are planning the biggest modifications in strategic asset allocation for several years," adding that this comes "at a time when inflection points spanning policy rates, inflation and economic growth appear likely."
CNBC Pro scoured recent surveys and spoke to family office operators to find out how they're allocating right now and in the next few years — in the face of major global shifts.
CNBC Pro subscribers can read more here.
— Weizhen Tan
CNBC Pro: 'Big opportunity': One pro names his top energy stocks for the long and short term
Energy stocks have had a mixed start to the year as ongoing geopolitical uncertainties and fluctuating oil prices continue to affect the sector.
One chief investment officer, however, sees potential in oil, naming one immediate and one longer-term investment opportunity.
"I think there is a big opportunity in geopolitics," Jevons Global's Kingsley Jones told CNBC's Pro Talks on Jan. 25, naming two stocks he likes.
CNBC Pro subscribers can read more here.
— Amala Balakrishner