We received weaker-than-expected data from the United States yesterday about last week’s new unemployment compensation applications and the state of industry. Among Wall Street’s main indexes, the S&P 500 fell by 1.4 percent and the Nasdaq by 2.3 percent. In Europe, too, skiing was done yesterday at a speed of two percent.
The exchange rate slide was also extensive in Asia on Friday. In Japan, the monetary policy of the central bank, which has become clearly more hawkish than before, put a particularly severe pressure on exchange rates, and the broad TOPIX index ended up with a 6.1 percent slide.
European stock markets opened lower on Friday. The broad Stoxx Europe 600 index was down 1.5 percent in the morning. Of the industries, utility services were the only ones with a slight increase. The deepest declines were in technology stocks, down 3.6 percent, and the financial sector and engineering firms in declines of 1.8 percent.
The European financial world is witnessing a significant arrangement when a French insurance company Axa (+1.0%) is selling its asset management business to a French company BNP Paribas -bank (-1.4%) with 5.1 billion euros. The merger of BNP Paribas and Axa’s asset management businesses is making it Europe’s third largest asset manager in terms of assets under management. Only the French remain ahead Amundi and Swiss UBS. After the acquisition, BNP Paribas manages approximately EUR 1,500 billion in assets.
CEO of Axa Thomas Buberl justified the sale of the asset management business in an interview with Bloomberg with economies of scale. At Axa, asset management has played a supporting role in the insurance business, and according to him, the size class was not large enough to get enough benefits out of it. Asset management is a highly scalable business, because as the assets under management grow, expenses such as employee salary costs rarely rise anywhere near the same pace. The growth of assets managed in this way and the resulting commission income typically flow strongly to the profit line.
However, the competition between asset managers is fierce, and in funds and ETFs, for example, the cost competition is fierce. Axa and BNP Paribas agreed on strategic cooperation in connection with the transaction, where Axa will acquire asset management services from BNP for 15 years.
The most anticipated market event of the day is the US labor market report for July, which will be published in the afternoon Finnish time at 15:30.
The number of new non-agricultural jobs is expected to have declined to 175,000 jobs from 206,000 jobs in June. The unemployment rate is expected to remain at 4.1 percent, as in June. The increase in wages is expected to have increased by 0.3 percent from the previous month, which was also the growth rate of wages in June.
Wall Street’s Index futures were falling sharply in anticipation of a red stock market opening in the United States. The S&P 500 future was down 1.0 percent and the Nasdaq future was down 1.6 percent.
Source: www.arvopaperi.fi
