PARIS (Reuters) – European markets ended higher on Friday, supported by a burst of results and an inflation indicator that did not surprise on the rise, as the next meeting of the Federal Reserve looms.
In Paris, the CAC 40 gained 0.89% to 8,088.24 points, while the German Dax advanced by 1.39% and the British Footsie by 0.75%.
The EuroStoxx 50 index ended the session with an increase of 1.39%, compared to 1.16% for the FTSEurofirst 300 and 1.16% for the Stoxx 600.
Among the notable results on Friday, figures from Alphabet and Microsoft livened up trading, as both companies reported better figures than expected by the markets.
Adding to traders’ optimism, PCE inflation figures for March did not surprise on the upside, suggesting that the decline in inflation continues.
However, it is not certain that the Federal Reserve draws the same conclusions as the markets from Friday’s indicator.
If investors are now betting on a first rate cut in September, a series of higher-than-expected inflation indicators published in recent months should encourage the central bank to maintain a restrictive stance and rule out a short-term rate cut .
The resumption of the rally in risky assets will depend on the conclusions of its next monetary policy meeting, Wednesday, and the publications of future results.
“While bonds are expected to remain under pressure, equity markets present a more divided picture, torn between solid results and the rising cost of capital,” notes Florian Ielpo, head of research at Lombard Odier IM.
A WALL STREET
Wall Street is progressing, driven by technology stocks and the latest inflation figures.
At closing time in Europe, trading on the New York Stock Exchange indicated an increase of 0.39% for the Dow Jones, compared to 1.1% for the Standard & Poor’s 500, and 2% for the Nasdaq Composite. .
VALUES
The Stoxx index of the “tech” compartment gained 1.93%, the largest sectoral increase in Europe in the wake of American values.
Amundi reported on Friday a higher-than-expected quarterly inflow and advanced 4.01%, the dynamism of its activities in Asia and the appetite of investors for risk-resistant assets having supported the growth of assets under management.
Saint-Gobain climbed 6.88%, at the top of the CAC 40, after the publication on Thursday of quarterly turnover above expectations.
Alten fell 11.40% after announcing a slowdown in its activity in the first quarter.
Valeo reported Thursday a turnover of 5.43 billion euros in the first quarter, down 1% compared to the same period in 2023, and dropped 3.24%.
Remy Cointreau fell 1.91% as Chief Financial Officer Luca Marotta warned that the unexpected rebound in its China-fueled cognac division may not last.
Nexity recorded a drop in its first quarter turnover on Thursday, a result that the real estate group described as “in line with expectations”, and increased by 7.18%.
Thyssenkrupp announced on Friday the sale of 20% of its steelmaking operations to EP Corporate Group (EPCG), the investment vehicle of Czech businessman Daniel Kretinsky, which sent the share price up 7.02 %.
Signify, lighting manufacturer, lost 11.28% after reporting on Friday an Ebita down 18% to 122 million euros, below market expectations.
RATE
Yields are falling, as operators are reassured about the rate outlook in the United States.
At the close of the rate markets in Europe, the ten-year Treasury yield fell 3.7 bp to 4.6692%, compared to 1 bp for the two-year rate, to 4.9892%.
The yield on the German ten-year fell by 4.8 bps to 2.576%, while that of the two-year rate eroded by 1.6 bps to 2.99%.
CHANGES
The dollar is strengthening after the latest inflation indicators which make a rate cut in September credible, according to the money markets.
The dollar gained 0.5% against a basket of reference currencies, while the euro lost 0.39% to 1.0687 dollars. The pound sterling fell 0.34% to $1.247.
OIL
Crude is progressing, digesting the latest indicators while tensions continue in the Middle East.
Brent strengthened by 0.62% to $89.56 per barrel, American light crude (West Texas Intermediate, WTI) advanced by 0.61% to $84.08.
(Written by Corentin Chappron, edited by Jean-Stéphane Brosse)
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