Stock market Europe ends a week full of indicators on the rise

PARIS (Reuters) – European stock markets closed higher on Friday, driven by the latest American inflation indicator.

In Paris, the CAC 40 nibbled 0.09% to 7,934.17 points, while the German Dax gained 0.32% and the British Footsie 0.69%.

The EuroStoxx 50 index ended the session with an increase of 0.32%, compared to 0.62% for the FTSEurofirst 300 and 0.61% for the Stoxx 600.

The markets welcome the latest inflation figures in the United States, which give hope that price dynamics are returning to the Federal Reserve’s target.

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Adding to market optimism, the ISM manufacturing activity indicator fell unexpectedly in February, while the Fed’s regional surveys seemed to indicate a rebound in activity at the start of the year.

“This ISM report does not correspond to the image of ‘surprisingly positive growth’ that emerged from the earnings reports, which casts doubt on the strength of the manufacturing industry and the cycle that accompanies it,” notes Florian Ielpo, head of macroeconomic research at Lombard Odier IM.

“Coming at a time when markets are hesitant and valuations seemingly stretched, this report will clearly show whether markets are still in a ‘good news is good news’ mood or not.”

Next week will be busy for the markets, with the publication of numerous reports on American employment during the week and the monetary policy meeting of the European Central Bank (ECB) on Thursday.

The ECB is expected to maintain its key rate at its current level and reiterate that a first rate cut could take place at the end of the first half, after European inflation published on Friday was higher than expected.

VALUES

Saint-Gobain reported a 6.4% drop in annual revenue on Thursday as strong exchange rates and low volumes weighed on results, sending the stock down 3 .65%.

Valeo’s cessation of the production of high-voltage motors in Germany due to the slowdown in the electric market has led to the loss of 300 jobs, a spokesperson for the automotive supplier, which lost 1, told Reuters on Friday. .96%.

Daimler Truck increased its dividend and announced a share buyback program after reporting annual profit and forecasts above expectations, and jumped 18.1%, reaching an all-time record during the session.

Volkswagen said on Friday it expects its revenue growth to slow in 2024, due to a weakening economic outlook, intensifying competition and rising costs, which has causes the manufacturer to lose 4.93%.

Leonardo gained 2.46% and touches a 16-year high after the defense and aerospace company exceeded its 2023 cash flow and order targets.

Kühne Und Nagel published annual operating profit on Friday down 49%, a larger decline than expected, and dropped 13.54%.

A WALL STREET

Wall Street advances after the latest inflation indicators.

At closing time in Europe, trading on the New York Stock Exchange indicated an increase of 0.10% for the Dow Jones, compared to 0.46% for the Standard & Poor’s 500, and 0.64% for the Nasdaq Composite.

RATE

Yields are falling sharply in the United States after a series of data giving markets hope that the Federal Reserve is reaching the end of its fight against inflation.

At the close of the European interest rate markets, the yield on the ten-year Treasury fell by 4.3 bp to 4.215%, compared to a decline of 9 bp for the two-year rate, to 4.5583%.

The German ten-year yield ended stable at 2.417%.

CHANGES

The dollar is in decline while the euro strengthens against the greenback, with operators anticipating a reduction in the rate gap between the ECB and the Fed in 2024.

The dollar lost 0.19% against a basket of reference currencies, while the euro rose 0.27% to 1.0832 dollars. The pound sterling advanced 0.21% to 1.2649 dollars.

OIL

Crude is rising as markets prepare for the next OPEC+ decision on its production levels.

Brent strengthened by 2.81% to $84.21 per barrel, American light crude (West Texas Intermediate, WTI) increased by 3.14% to $80.72.

(Written by Corentin Chappron, edited by)