Europe outpaces US inflation
By Claude Chenjou
PARIS (Reuters) – European stock markets ended higher on Wednesday and Wall Street was in the mid-session green on optimism ahead of Thursday’s release of U.S. inflation figures and Friday’s upheaval in the quarterly corporate results season.
In Paris, the CAC 40 ended with an increase of 0.8% to 6,924.19 points. The British Footsie gained 0.4%, and the German Dax gained 1.17%.
EuroStoxx 50 index increased by 1.04%, FTSEurofirst 300 by 0.38% and Stoxx 600 by 0.38%.
“We’ve had a milder-than-expected winter, recession risks are receding and there’s a sense that things may not be so bad after all, and that’s lifting stocks, especially in Europe.” said Mike Hewson, an analyst. CMC Markets.
Although the trend is still fragile, it is also supported by hopes of a relaxation in interest rates, in the absence of comments from the chairman of the US Federal Reserve System (FED), Jerome Powell. A Reuters consensus also forecast US consumer prices to fall 6.5% on the year in December.
Bank of America, JPMorgan Chase, Wells Fargo and Citigroup will also report quarterly results on Friday, and investors hope their financial releases will provide a gauge of the economic outlook and the impact of the worsening economic situation.
VALUES IN EUROPE
In Europe, real estate protection division (+3.08%) and insurance division (-1.12%) showed the biggest decrease.
Real estate group Unibail-Rodamco Westfield fell 3.06%, British insurer Direct Line fell 23.494% after the unexpected cancellation of its 2022 dividend, while rivals Admiral and Aviva fell 6.82% and 2.11%.
On the CAC 40, LVMH advanced 2.12% following the announcement of the appointment of Pietro Beccari as CEO of Louis Vuitton and Delphine Arnault as head of Christian Dior Couture.
In Frankfurt, Bayer gained 3.61% in response to reports on a stake in activist fund Bluebell Capital Partners.
Sainsbury’s fell 1.59% after its chief executive warned consumers.
ON WALL STREET
At the close in Europe, the Dow Jones advanced 0.29%, the Standard & Poor’s 500 advanced 0.60% and the Nasdaq advanced 0.97%.
Most of the S&P-500’s eleven major sectors are in the green, with the biggest gains coming for growth stocks like Amazon and Tesla, which gained 4.46% and 3.20%, respectively.
In the first exchanges on Wall Street, American Airlines Group (+0.88%), Spirit Airlines (+1.89%) or Delta Air Lines (+1.44%) airlines affected by the suspension of air traffic in the United States, the Federal Aviation Administration of America ( FAA) control system failure starts to rise again.
The dollar was virtually flat against a basket of six major currencies (+0.02%) as investors awaited data on US inflation.
The euro is trading at $1.0736 (+0.02%), near a seven-month high against the greenback.
The ten-year German Bund yield fell nearly 12 basis points to 2.18%, its lowest since Dec. 19, despite calls for another rate hike from the European Central Bank (ECB). ECB Governing Council member Olli Rehn said on Wednesday that strong hikes were still needed at the institution’s next meeting, and the HBSC said it expected another half-point increase in the euro zone in February and March.
The yield on 10-year US Treasuries fell four basis points to 3.57% at the close of trade in Europe.
Oil prices are supported by hopes of a mild recession, which outweighed last week’s rise in U.S. crude inventories. The Energy Information Administration (EIA) reported that such inventories rose by 19.0 million barrels, the biggest weekly gain since a record high of 21.6 million in February 2021.
Brent oil increased by 3.2% to $82.66 a barrel, US light crude oil (West Texas Intermediate, WTI) increased by 3.18% to $77.51. Both oil benchmarks are heading for their best session performance since January 3.
(Writing by Claude Chendjou, Editing by Jean Terzian)