US jobs report, rate hike prospects in the spotlight

Stocks rose at the open on Friday, extending gains from the closing minutes of the previous session after the August jobs report came in as expected.

The Dow Jones Industrial Average rose about 140 points, or 0.5%, while the S&P 500 and Nasdaq Composite added 0.6% each.

The major averages are still on track to post their third negative week in a row.

—Tanaya Macheel

The Group of Seven economic powers agreed on a plan to implement a price cap mechanism on Russian oil exports. The policy is designed to drain the Kremlin’s war chest and better protect consumers amid high energy prices.

Before the announcement, Russia warned it would stop selling oil to countries that impose maximum prices on Russian energy exports and said that imposing a cap on Russian crude would lead to significant destabilization of the world oil market.

The G-7 is made up of the United States, Canada, France, Germany, Italy, the United Kingdom, and Japan.

Read the full story here.

—Sam Meredith

By early afternoon, shares in British private equity firm Bridgepoint Group rose 13% to lead the Stoxx 600.

At the bottom of the index, Swedish medical technology company Sectra slumped 12% after its quarterly earnings report.

European Commission President Ursula von der Leyen says the 27-nation bloc must urgently set a price cap for gas flowing into Europe from Russian pipelines.

“I firmly believe that now is the time for a price cap on the Russian gas pipeline to Europe,” von der Leyen told reporters, according to Reuters.

It comes shortly after Belgian Energy Minister Tinne Van der Straeten warned that the next five to 10 winters in Europe will be “terrible” unless the EU moves quickly to put a cap on runaway gas prices.

—Sam Meredith

Industrial producer price growth in the 19-member euro zone rose to 37.9% year over year in July, up from 36% in June and ahead of consensus forecasts of a 35.8% increase, new Eurostat data showed on Friday.

Producer prices rose 4% month-on-month, down sharply from 1.3% in June, and are likely to signal further increases in consumer price inflation as businesses battle rising energy costs.

-Elliot Smith

Russia’s energy influence over Europe appears to be coming to an end, political and energy analysts say, which could ease the risk of further supply disruptions.

Europe has suffered in recent months from a sharp drop in gas exports from Russia, traditionally its largest energy supplier.

A bitter gas dispute between Brussels and Moscow following Russia’s invasion of Ukraine has exacerbated the risk of recession and winter gas shortages. What’s more, many fear that Russia may soon turn off the taps entirely. Russia denies using energy as a weapon.

Asked if Russia’s energy influence over Europe might be coming to an end, Agathe Demarais, director of global forecasting at The Economist Intelligence Unit, told CNBC: “Yes. A lot, actually.”

“Europe is heading into a very difficult winter, probably two years of a very difficult adjustment with a lot of economic pain. But then Europe will essentially become more independent with a more diversified mix,” Demarais said.

“And what that means is that Russia’s energy weapon will become moot,” he added.

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—Sam Meredith

Britain’s financial sector is being urged to do more to help workers struggling with the cost-of-living crisis, despite a host of big banking names providing one-time payments to low-income earners.

Nationwide announced on August 15 a payment to more than 11,000 employees to help with rising costs of living, following the likes of Lloyds, Virgin Money and HSBC.

Other financial organizations are offering pay raises, including NatWest Group, Co-Operative Bank and Barclays.

Businesses should continue to assess wages as inflation continues to put pressure on wages, according to worker rights group Unite the Union.

“It won’t take long for us to start thinking and talking about pay raises that should be given next year, and our claims will definitely be that people should get at least inflation,” said Dominic Hook, national officer for Unite. .

“We don’t want people to take a pay cut in real terms. They will need a raise in pay, for sure,” he said.

Read the full story here.

– Hannah Ward-Glenton

Shares of British private equity firm Bridgepoint gained 8.5% in early trading to lead the Stoxx 600.

British property developer Berkeley Group fell 5% to the bottom of the index after HSBC downgraded the stock to “reduce” from “hold” and lowered its price target.

Shell Chief Executive Ben van Beurden is preparing to step down next year and the company has shortlisted four potential successors, Reuters reported on Friday, citing two company sources.

The 64-year-old Dutchman has been at the helm of the oil major since January 2014, joining the company in 1983.

Britain’s FTSE 100 looks around 23 points higher at 7,172, Germany’s DAX is expected to add around 18 points to 12,748 and France’s CAC 40 is set to gain around 35 points to open at 6,069, according to IG data.

Time to get out of stocks, some analysts have urged this week.

“We … now believe that the absolute return outlook for equities is entirely unattractive in the coming months,” Michael Strobaek, global chief investment officer at Credit Suisse, said in a note.

Here’s what professionals say to buy, including the “best asset to own” during this stage of the investment cycle, according to Goldman Sachs.

Professional subscribers can read the story here.

— Weizhen Tan

Market volatility is on the rise, as fears mount that further interest rate hikes to tackle inflation will come at the expense of economic growth. And there could be more pain ahead, as the stock market now enters what has traditionally been a “seasonally weak” period for stocks.

But these low-volatility stocks have outperformed the market this year and could have more upside potential going forward, according to analysts.

Professional subscribers can read more here.

—Zavier Ong