by Claude Chendjou
PARIS (Reuters) – European stocks ended higher on Thursday and Wall Street was also trading in the green at midday in volatile equity markets due to mixed economic indicators and Microsoft’s surprise warning on the strength of the dollar.
In Paris, the CAC 40 ended with a gain of 1.27% to 6,500.44 points. The German Dax rose 1.01%.
The EuroStoxx 50 index gained 0.95%, the FTSEurofirst 300 0.56% and the Stoxx 600 0.57%.
The London Stock Exchange is closed until Monday due to Queen Elizabeth II’s Platinum Jubilee celebrations, limiting trading volumes in the markets.
After two consecutive sessions of declines, the positive trend in the equity markets was fragile on Thursday, so that stocks alternated higher and lower in the session thanks to OPEC oil announcements and Microsoft forecasts .
“Any sign that OPEC is finally willing to cap oil prices removes the threat of runaway inflation, the need for aggressive (monetary) tightening…and the risk of recession,” Marios said. Hadjikyriacos, investment analyst at XM.
Investors fear that an acceleration of monetary tightening by central banks, in the face of galloping inflation, will lead to a recession.
Eurozone producer price statistics, released by Eurostat on Thursday, show a slower month-on-month rise to 1.2% in April, but year-on-year the indicator shows growth of 37 .2% after an increase of 36.8% in March.
“These increases will at least partially feed through to consumer prices. This normally takes between eight and 12 months, which means that consumer prices will most likely remain at high levels for at least eight to 12 months,” explains Teeuwe Mevissen, Eurozone Economist at Rabobank.
In the United States, where inflation is at a 40-year high, Lael Brainard, the vice president of the U.S. central bank, said half-point hikes in the institution’s rates this month- this and July were reasonable and there was little chance of a pause in September, as the money markets hope.
VALUES
In Europe, almost all of the Stoxx 600 compartments finished in the green, with consumption (+1.4%) and industry (+1.3%) recording the best performances. Real estate (-0.5%), energy (-0.3%) on the other hand, showed the most significant declines. Shell lost 0.6% and Equinor 1.9%.
In the luxury compartment, LVMH, Hermès, Kering, L’Oréal and Richemont advanced from 1.5% to 3.3%.
In business news, Saint-Gobain, at the top of the CAC 40, gained 4.7% thanks to a confirmation of its earnings forecasts, while Rémy Cointreau (+4.9%) was carried by annual results that exceeded expectations.
SAS gained 1.7% in reaction to a press report that a group of foreign investors was preparing a takeover bid for the Scandinavian company.
AT WALL STREET
At the time of the closing in Europe, the Dow Jones nibbles 0.03%, the Standard & Poor’s 500 0.29% and the Nasdaq takes 1.14%.
The indices, which had opened lower after Microsoft announced a reduction in its forecasts for profit and sales for the fourth quarter, are volatile.
The software giant, which mentioned unfavorable exchange rate effects to explain this “profit warning”, lost 1.9% against the current of the “tech” compartment, up 0.8%, which benefits from purchases at a good price. account.
Hewlett-Packard Enterprise, for its part, plunged 6.5% after quarterly results below expectations.
THE INDICATORS OF THE DAY
Unemployment claims fell more than expected in the United States last week, to 200,000, but the ADP survey shows that the private sector created fewer jobs than expected in May, which could testify to the beginning of a slowdown in demand on the labor market.
The Labor Department’s jobs report will be released on Friday.
CHANGES
The dollar, which at the start of the session reached a high since May 11 against the yen at 130.23, fell 0.52% against a basket of reference currencies, in a context of renewed appetite for the risk.
The euro took advantage of this, taking 0.83% to 1.0732 dollars after two sessions of decline.
The Swiss franc, buoyed by consumer price data showing an acceleration in inflation in May, hit a one-month high against the single European currency at 1.0222.
RATE
Bond yields, buoyed by expectations of higher credit costs, have climbed in Europe as money markets now expect a 120 basis point hike in European Central Bank rates by the end of the year against 105 points last week.
The yield on the ten-year German Bund, a benchmark for the euro zone, gained more than five basis points to 1.232%, the highest since July 2014.
In the United States, the yield of ten-year Treasuries is almost stable at 2.9241% after the mixed economic indicators of the day.
OIL
At the close of trading in Europe, the oil market is up slightly in a volatile session, after the decision of Saudi Arabia and other member countries of OPEC+ to increase their oil production to compensate for the drop in Russian extractions.
Analysts say the actual increase in production will be insignificant as most OPEC members except Saudi Arabia and the United Arab Emirates are already at maximum capacity.
The barrel of Brent took 1.14% to 117.61 dollars and that of American light crude (West Texas Intermediate, WTI) 1.52% to 117.01 dollars.
(Written by Claude Chendjou, edited by Jean-Michel Bélot)
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