Stock market Europe ends up after the BoE, Wall Street in the green

by Augustin Turpin

(Reuters) – European stock markets ended higher on Thursday and Wall Street was trading in the green at mid-session, shares having been supported by hopes of an imminent drop in interest rates in Europe and the United States, encouraged by optimistic comments from the Governor of the Bank of England (BoE) as well as higher than expected jobless claims figures in the United States.

In Paris, the CAC 40 ended up 0.69% at 8,187.65 points. The British Footsie rose by 0.33% and the German Dax by 0.98%.

The EuroStoxx 50 index gained 0.28%, the FTSEurofirst 300 0.19% and the Stoxx 600 0.19%.

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In a context of limited trade this week, attention focused on the decision of the BoE, which unsurprisingly maintained its key rate at 5.25%. Its governor, Andrew Bailey, nevertheless indicated that rates would probably fall soon.

“It is likely that we will cut rates in the coming quarters, perhaps more than the markets expect,” he said during a press conference, adding that a cut rates in June is “neither ruled out nor set in stone”.

Data on weekly jobless claims in the United States, higher than expected, were also interpreted as a signal that the Fed could also lower its key rate this year.

These optimistic statements supported European stocks, weighed down by the poor performance of several high-profile stocks trading ex-dividend.

The automotive sector compartment of the Stoxx 600 thus recorded a decline of 0.8% with the fall of Mercedes-Benz (-5.8%), while HSBC and Allianz lost 1.9% and 3.8%.

A WALL STREET

At closing time in Europe, the Dow Jones gained 0.44%, the Standard & Poor’s 500 0.2% and the Nasdaq Composite 0.2%.

In terms of values, Tesla lost 1.2% after Bloomberg reported that the group is facing growing pressure in China and must regain market share there.

Warner Bros. Discovery lost 1.3% after announcing its intention to offer its Disney+, Hulu and Max streaming services as a bundle to its American customers from this summer, while reporting a turnover below expectations in the first quarter.

Arm Holdings fell 3.4% after reporting disappointing annual revenue forecasts, as the semiconductor maker’s stock has so far benefited from enthusiasm for artificial intelligence (AI).

Roblox plunges 21.5% after disappointing expectations on its annual forecasts.

VALUES

BBVA lost 6.7% after presenting a public tender offer on Thursday to buy Sabadell, which gained 3.2%.

BE Semiconductor Industries rose 3.6% after announcing that it had received an order for 26 hybrid bonding systems while Argenx fell 5.1% after its first quarter results.

TODAY’S INDICATORS

Unemployment claims resumed their rise last week in the United States, exceeding expectations to reach 231,000 new claims compared to 209,000 the previous week, according to data from the Labor Department.

CHANGES

The dollar fell (-0.22%) after the latest data on American unemployment showed signs of a slowdown in the labor market, while the euro gained 0.21% to 1.0768 dollars.

The pound rebounded and gained 0.05% following the BoE decision.

RATE

Bond yields in the Eurozone are catching their breath, as the BoE governor’s optimistic comments have offset his decision to leave rates unchanged.

The yield on the ten-year German Bund rose 3.8 basis points (bps) to 2.498%, with the US Treasury at the same maturity increasing 0.3 bps to 4.4865%.

OIL

Oil prices are stable, with Brent gaining 0.12% to $83.68 per barrel and American light crude (West Texas Intermediate, WTI) increasing 0.2% to $79.15.

(Some data may have a slight lag)

(Written by Augustin Turpin)