In Europe, the CAC 40 wins 0.39% and the Stoxx 600 0.19%. The Footsie remained stable, while the Dax dropped. Wall Street digs its losses at mid-session. The decline of household morale weighs heavily. Full lights on the German election, Ukraine, and customs duties.

European markets closed in a mixed state on Friday, with caution prevailing ahead of the anticipated legislative elections in Germany. The latest macroeconomic indicators from the European continent and the rise in Chinese assets only partially offset the investor nervousness.

In Paris, the CAC 40 ended the day with a 0.39% increase, closing at 8,154.51 points. The British Footsie closed with a decline of 0.04%, while the German Dax finished the session with a drop of 0.23%. The Eurostoxx 50 index closed up 0.19%, the FTSEUROFIRST 300 by 0.47%, and the Stoxx 600 by 0.49%.

Investors are closely watching the situation in Germany, where the formation of a coalition government promises to be complex. The focus will be on the ability of the future government to reform the “debt brake,” which imposes a limit on the country’s deficit. This situation is reminiscent of the political gridlock seen in the U.S. during the debt ceiling debates, where bipartisan cooperation is crucial for economic stability.

Geopolitical tensions also weighed on investor morale. The threat of Donald Trump’s customs duties and the ongoing negotiations between the United States and Russia over a cease-fire in Ukraine have kept investors on edge. The CAC 40 managed to bounce back somewhat during the session after the publication of encouraging business results and the rise of Chinese assets, driven by Alibaba’s promise to invest “aggressively” in generative artificial intelligence.

Investors also had to digest several macroeconomic indicators from the European continent, including the PMI surveys of Global and HCOP S&P. These indicators provide a snapshot of economic health and are closely watched by investors.

In Paris, GTT and Alten soared by 15.2% and 9.3%, respectively, rising to the top of the SBF 120 after their annual results. In London, Standard Chartered climbed 3.25% after announcing a share repurchase worth $1.5 billion and an 18% increase in its annual profit.

Across the Atlantic, the main indicators dug their losses after the publication of the Household Morale index of the University of Michigan, which reached its lowest level in more than a year. At the time of the close in Europe, the Dow Jones fell 0.83%, the Standard & Poor’s 500 by 0.55%, and the Nasdaq Composite by 0.68%.

In values, United Health lost 8% after press information that the American Department of Justice has opened an investigation into group practices in relation to the Medicare program. In its wake, Humana fell by 3.83%.

Retail sales in Great Britain rebounded more strongly than scheduled in January, according to data from the National Statistical Office. In France, the business climate in industry increased more than expected in February, according to INSEE data. However, over the same period, the activity of the private sector contracted more than expected. In Germany, the activity of the private sector accelerated slightly in February, while in the euro zone, it remained sluggish.

Across the Atlantic, household morale saw a more marked decline than expected in February, with its index of confidence reaching a low not seen in more than a year. This decline mirrors similar trends in the U.S., where consumer confidence has been volatile due to economic uncertainties and geopolitical tensions.

The dollar recovered part of its losses against the yen, with investors positioning themselves ahead of data on American inflation next week and pending more indications on customs duties promised by Donald Trump. The greenback strengthened by 0.30% against a basket of reference currencies, while the euro lost 0.49% to 1.0449 dollars.

U.S. bond yields retreated on Friday after Scott Bessent, secretary to the Treasury, reassured concerns about the possibility of an increase in the long-term debt auction. The yield of ten-year Treasuries gave 4.3 basis points to 4.4565%, and the two-year yield retreated 2.1 basis points to 4.2448%. Two days before the anticipated legislative elections in Germany, the yield of the German Bund at ten years fell from 6.9 basis points to 2.4640% and the two-year yield from 5.0 basis points to 2.1010%.

Oil prices were down on Friday but still tended to a positive weekly close against the backdrop of disruption of the supply chain in Russia and a potential rebound in demand in China and the United States. Brent sold 1.96% to $74.98 per barrel, and light American crude (West Texas Intermediate, WTI) 2.06% to $70.99.

Gold prices stabilized on Friday after reaching two consecutive records, with demand for “safe” assets remaining important in the face of concerns about the customs duties provided for by Donald Trump. The spot course fell 0.06% to $2,938.70.

The week of February 24 promises to be rich in economic indicators and business results. On Monday, the markets will be able to digest the result of the anticipated legislative elections in Germany, which will take place on Sunday, February 23. This election is crucial for the future of Germany’s economic policies and its role in the European Union, much like the midterm elections in the U.S. are pivotal for domestic policy directions.

In conclusion, the mixed results in European markets reflect the broader economic and political uncertainties both in Europe and globally. The upcoming German elections, geopolitical tensions, and macroeconomic indicators will continue to shape investor sentiment in the coming weeks. As the U.S. market closely watches these developments, it is essential for investors to stay informed and adapt their strategies accordingly.