by Laetitia Volga
PARIS (Reuters) – European stock markets ended up on Friday but without much conviction while Wall Street stagnated, mixed data on prices in the United States having revived uncertainties over the Federal Reserve’s monetary policy.
In Paris, the CAC 40 gained 0.46% to 6,677.64 points. The British Footsie gained 0.06% and the German Dax 0.74%.
The EuroStoxx 50 index advanced 0.54%, the FTSEurofirst 300 0.77% and the Stoxx 600 0.84%.
This shows a weekly increase of 0.97% after seven consecutive weeks in the green and the Parisian market fell by 0.96%, ending a series of nine weeks of gains.
At the time of the close in Europe, Wall Street was evolving on a cautious note, the Dow Jones and the Standard & Poor’s-500 taking 0.1% and the Nasdaq Composite 0.3%.
The release of US producer price data in November stoked fears that the Fed would hike rates for longer than expected.
The price index has indeed increased more than expected in November, by 7.4% over one year while the Reuters consensus gave a figure of 7.2% after 8.1% the previous month.
But in its “core” version, the index recorded an increase of 0.3%, after +0.2% in October, and 4.9% over one year, after +5.4%.
“Markets are overly optimistic that at some point between June and December 2023 the Fed will be ready to cut rates,” said Anthony Saglimbene, chief strategy officer at Ameriprise Financial. “Today’s data shows inflation is declining, but it is more persistent than most assume.”
The next test will take place on Tuesday with consumer prices in the United States, on the eve of the Fed’s announcements after two days of debate.
The European Central Bank and the Bank of England will also announce their rate decisions next week and markets are betting that these institutions, like the Fed, will slow the pace of their rate hikes to 50 basis points.
VALUES
On the stock market, the Stoxx construction index gained 1.75%, one of the strongest gains of the day. In Paris, Saint-Gobain finished at the top of the CAC 40 (+3.52%).
Worldline lost 3.68% as JPMorgan lowered its advice to “neutral”.
The pharmaceutical group Ipsen fell by 4.20%, the red lantern of the Stoxx, after the announcement of disappointing results of a study relating to the association of Cabometyx with atezolizumab to treat a form of lung cancer.
EXCHANGES/RATES
On the foreign exchange market, the dollar is sluggish against a basket of international currencies, including the euro, which is moving around 1.0548.
In reaction to production prices in the United States, bond yields amplified their progression: that of ten-year Treasuries took more than five basis points to 3.549% and its German equivalent ended up sharply at 1.925%.
OIL
Oil prices, despite the day’s advance, are heading for a loss of around 10% for the week as a whole on concerns about the weak economic outlook in China, Europe and the United States.
Brent rose from 1.31 to 77.15 dollars a barrel and American light crude (West Texas Intermediate, WTI) rose 1.36% to 72.43 dollars.
(Laetitia Volga, editing by Kate Entringer)
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