EUROPEAN STOCK MARKETS END UP
by Claude Chendjou
PARIS (Archyde.com) – European stocks ended higher on Thursday and Wall Street was also in the green mid-session, as renewed optimism in equity markets was confirmed following the publication of new economic data in the United States. who plead for only a gradual increase in interest rates.
In Paris, the CAC 40 ended with a gain of 1.78% to 6,410.58 points. The British Footsie gained 0.56% and the German Dax 1.59%.
The EuroStoxx 50 index gained 1.72%, the FTSEurofirst 300 0.82% and the Stoxx 600 0.78%.
The U.S. Commerce Department said the first-quarter economic contraction was a little stronger than initially estimated (-1.5% annualized vs. -1.4%) due to a trade deficit record high and a slight slowdown in inventory build-up.
Unemployment claims in the United States, on the other hand, fell a little more than expected last week, to 210,000.
These statistics did not call into question the renewed optimism seen the day before on Wall Street and even confirmed, according to Thomas Hayes, president of Great Hill Capital, the scenario of less significant monetary tightening than feared.
“The data is supportive of the development of a possible dovish bias several months from now,” he said.
According to the minutes of the Fed’s May meeting, the majority of U.S. central bank officials deemed further 50 basis point credit cost hikes in June and July “likely appropriate”, an outlook which reassures some investors, worried that a sharp rise in rates will plunge the economy into recession.
In Europe, where inflation is also moving to record levels as activity shows signs of slowing according to the first results of S&P Global’s PMI surveys for the month of May, the President of the European Central Bank, Christine Lagarde, also came out in favor of a gradual increase in the cost of credit.
A sign of investor confidence, the volatility index fell back in the United States to 27.4 points, a low since May 18, and in Europe, it ended down 6.4% at 25, 6 dots.
A WALL STREET
At the time of the close in Europe, the Dow Jones advances by 1.54%, the Standard & Poor’s 500 by 1.76% and the Nasdaq by 2.18%
All major S&P-500 sectors are in the green, with finance (+1.97%) and consumer spending (4.05%) leading the way. The latter compartment is supported by forecasts from the department store chain Macy’s, which jumped 15%, and the annual outlook from low-cost retailers Dollar General (+12.1%) and Dollar Tree (+17.6%). . The distribution sub-segment takes 3.92%.
The trend is also driven by the semiconductor sector (+3.18%) following the announcement by Broadcom (+3.4%) of the acquisition of cloud computing service provider VMware (+2.7%). ) for 61 billion dollars (56.9 billion euros). Intel, Qualcomm and AMD advance from 2.3% to 6.5%.
VALUES
In Europe, where trading was limited due to Ascension, most of the main sectors of the Stoxx 600 ended in the green, energy (+1.78%), consumer discretionary (+2.46%) ) and distribution (+4.81%) posting among the best performances.
TotalEnergies gained 2.1%, while in the luxury sector, LVMH, Hermès and Kering advanced from 2.4% to 3.6%.
In corporate news, steel tube maker Vallourec, down 7.1%, suffered from a stock placement by several investors at a 12.5% discount to its closing price. of Wednesday.
Semiconductor specialists STMicroelectronics and ASM International benefited from the announcement of the takeover of VMware by Broadcom.
Elsewhere in Europe, the telecom operator BT sold 2.2% following announcing that the British government would launch an investigation into the participation of Patrick Drahi, the founder of Altice, in its capital.
CHANGES
The dollar index lost 0.19% once morest a basket of benchmark currencies, with the Fed’s “minutes” showing no surprises.
The euro, for its part, advanced 0.43% to 1.0715 dollars, while the pound sterling hit a three-week high once morest the greenback at 1.2620.
RATE
Bond yields varied little in a context of receding fears regarding inflation in view of the latest results published by companies. That of ten-year Treasuries lost three basis points to 2.7756%.
In Europe, the ten-year German Bund yield gained around five basis points to 0.9940%, following hitting 0.887% in session, its lowest level since May 13, due to uncertainties over the magnitude of the expected ECB rate hike in July.
OIL
Oil prices are supported by both supply fears in the run-up to a European embargo on Russian hydrocarbons and the announcement of a larger than expected drop in crude inventories in the United States during the week before May 20.
Brent rose 2.82% to 117.26 dollars a barrel and American light crude (West Texas Intermediate, WTI) 3.62% to 114.36 dollars.
(Report Claude Chendjou, edited by Jean Terzian)