Europe ends in disorganized order against a backdrop of consolidation

by Augustin Turpin

(Reuters) – European stock markets ended in mixed order on Friday and Wall Street faltered mid-session, the markets catching their breath and consolidating after recent record highs in indices linked to central bank announcements.

Luxury and technology stocks led the decline.

In Paris, the CAC 40 ended down 0.34% at 8,151.928 points. The British Footsie takes 0.61% and the German Dax 0.18%.

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The EuroStoxx 50 index lost 0.38%, the FTSEurofirst 300 0.01% and the Stoxx 600 rose 0.02%.

The indices set records this week linked to the strengthening prospect of a reduction in key rates from major central banks in the months to come.

At closing time in Europe, the Dow Jones lost 0.48%, the Standard & Poor’s 500 0.05% and the Nasdaq Composite, with a strong technological composite, rose 0.23%.

The American Federal Reserve (Fed) confirmed on Wednesday that it still plans three rate cuts this year, while the Central Bank of Norway and the Bank of England (BoE) have hinted at an easing of their monetary policy in the coming months.

The Swiss National Bank (SNB) did not wait and lowered its key rate by 25 basis points on Thursday.

These announcements caused a decline in bond yields and a rush on metals, with gold catching its breath and falling 0.84% ​​to 2,163.82 dollars per ounce, after having touched a record at 2,222.39 dollars.

The day was marked by the decline in the European luxury sector, down 1.3% in the wake of sell-offs in growth stocks, while the giant LVMH lost 2.28% after announcing Thursday evening that Antonio Belloni would leave his role as deputy general manager in April.

Rate-sensitive technology stocks .SX8P fell 0.81% after leading sector gains on Thursday, while the personal and household goods index was down 0.74%, weighed down by weakness in Chinese markets.

Across the Atlantic, FedEx shares soared 7.3% after the group revised its profit forecasts for 2024 on Thursday and reported a 2.5% increase in the operating margin of its main division, Express.

On the downside, Nike fell 6.5% after announcing Thursday that its revenue would decline by a low single-digit percentage in the first half of 2025.

TODAY’S INDICATORS

In the UK, retail sales data revealed month-on-month stagnation in February, despite the negative impact of bad weather on store sales, confirming signs of recovery in the economy after the slight recession of last year.

Across the Rhine, a survey by the Ifo institute showed that business morale improved in March, with the business climate index standing at 87.8, above expectations.

CHANGES

The greenback advances (1%) against a basket of reference currencies, the lack of impact of recent decisions by the Japanese and Swiss central banks highlighting the gap between the Federal Reserve and global peers in setting interest rates. ‘interest. The euro lost 0.5% to 1.0806 dollars.

RATE

Bond yields in the euro zone ended lower on Friday, as comments from central bankers on upcoming interest rate cuts reassured investors.

The German ten-year yield lost 7.6 basis points (bps) to 2.322% and the two-year yield lost 5.2 bps to 2.8031%.

As the stock markets closed in Europe, yields on ten-year US Treasuries also fell, with the ten-year yield losing 5.7 basis points to 4.2138%, and the two-year yield 3.6 bps to 4 .5955%.

OIL

Oil prices are falling as the possibility of a ceasefire in Gaza gains ground, while continued fighting between Ukraine and Russia has cushioned the fall.

Brent dropped 0.41% to 85.43 dollars per barrel, American light crude (West Texas Intermediate, WTI) losing 0.44% to 80.71 dollars.

(Written by Augustin Turpin, edited by XXX)