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European markets clock best week since November as investors digest U.S. jobs report

This is CNBC's live blog covering European markets.

LONDON European markets climbed on Friday as investors digested key euro zone inflation data and December's U.S. jobs report.

European markets


The pan-European Stoxx 600 index closed 1.1% higher provisionally, marking a 3.4% rise for the week — its best performance since mid-November.

All sectors were in the green. Basic resources led gains with a 2.5% rise, as chemicals and energy stocks both rose around 1.9%.

Inflation in the euro zone dropped for a second consecutive month in December. Headline inflation, which includes food and energy costs, came in at 9.2% year-on-year in December, according to preliminary data Friday from the European statistics agency, Eurostat.

It follows November's headline inflation rate of 10.1%, which represented the first slight contraction in prices since June 2021.

Investors may be hoping that falling inflation will pave the way for the European Central Bank to temper its aggressive monetary policy tightening cycle and limit the continent's economic pain. However, analysts do not expect a pivot from the ECB just yet.

Minutes from the last meeting of the U.S. Federal Reserve, published earlier this week, showed policymakers stateside were seemingly unmoved from their hawkish position as they look to bring inflation back down toward target.

Global stocks received a boost during afternoon trade in Europe when Friday's U.S. nonfarm payrolls report showed payroll growth decelerated in December. The Dow Jones Industrial Average was up 1.07% shortly after the open.

Payroll growth still exceeded expectations, however — reinforcing the strength of the labor market despite the Fed's attempt to tame inflation and suggesting there is room for higher interest rates.

Nonfarm payrolls increased by 223,000 for the month, above the Dow Jones estimate for 200,000, while the unemployment rate fell to 3.5%, 0.2 percentage point below expectations.

Shares in Asia-Pacific ticked higher overnight, led by South Korea's Kospi index, while U.S. stock futures pointed to a positive open on Wall Street as traders await the key jobs report.

European stocks end week 3.4% higher

The pan-European Stoxx 600 had its best week since mid-November as data showed positivity in euro zone manufacturing, a slowdown in inflation, and better than expected retail sales from the U.K.

The index gained 1.1% on Friday, taking it up 3.4% for the week.

Analysts told CNBC the inflation data was unlikely to cool the European Central Bank's enthusiasm for rate hikes; but European stocks got an end of week boost from indications of slowing payroll growth in the U.S.

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— Jenni Reid

Stocks open higher after better than expected jobs report

U.S. stocks opened higher Friday after investors cheered the December jobs report, which showed the labor market remains resilient but that wages aren't gaining as much as expected amid the Fed's interest rate hikes to tame inflation.

The Dow Jones Industrial Average increased 255 points, or 0.77%. The S&P 500 gained 0.68%, while the Nasdaq Composite jumped 0.44%.

—Carmen Reinicke

U.S. payrolls rose by 223,000 in December, topping expectations

Friday's U.S. nonfarm payrolls report showed payroll growth decelerated in December but still exceeded expectations — reinforcing the strength of the labor market despite the Fed's attempt to tame inflation, and suggesting there is room for higher interest rates.

Nonfarm payrolls increased by 223,000 for the month, above the Dow Jones estimate for 200,000, while the unemployment rate fell to 3.5%, 0.2 percentage point below the expectation.

"While this will trouble the Federal Reserve, it supports our optimism that the US economy can escape a recession," said Hugh Grieves, fund manager of the Premier Miton U.S. Opportunities fund.

"Chairman Powell will, however, take comfort in the fact that real wage growth is decelerating faster than expected. This will also take the pressure off prices and may reduce the need for further significant, damaging interest rate rises later in the year."

Read the full story here.

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Fahad Kamal, chief investment officer at Kleinwort Hambros, expects more upside than downside in oil prices in 2023.

Euro zone inflation rate slides to 9.2% as energy price surge cools

Inflation in the euro zone dropped for a second consecutive month in December.

Headline inflation, which includes food and energy costs, came in at 9.2% year-on-year in December, according to preliminary data Friday from the European statistics agency, Eurostat. It follows November's headline inflation rate of 10.1%, which represented the first slight contraction in prices since June 2021.

Despite further signs that inflation is easing, analysts say it is too early to celebrate and do not expect a pivot from the region's central bank.

Read the full story here.

- Silvia Amaro

CNBC Pro: Goldman Sachs reveals 7 under-the-radar global stocks to buy this year

Many under-the-radar stocks are key to a green energy transition, according to Goldman Sachs — and it expects them to take off in 2023.

The Wall Street bank said the decade-long trend of investing in large clean energy stocks would shift this year, with the focus moving to smaller supply chain firms.

The investment bank identified seven stocks in the Europe, Middle East, and Asia regions that will benefit from the new trend.

CNBC Pro subscribers can read more here.

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He shared three "top conviction calls" with CNBC that could help investors navigate the macro environment.

CNBC Pro subscribers can read more here.

— Weizhen Tan

CNBC Pro: Veteran investor sees energy as the biggest winner in 2023 — and names the stocks to play it

After a standout performance in 2022, energy stocks are having a slow start to the year.

But veteran investor Louis Navellier is unfazed. He believes the sector is set for another bumper year in 2023, and has a number of stock picks to play it.

Pro subscribers can read more here.

— Zavier Ong

Here are the opening calls

Britain's FTSE 100 is set to add around 18 points to 7,651, Germany's DAX is seen around 38 points higher at 14,474 and France's CAC 40 is expected to gain around 18 points to 6,780.