Europe closes sharply higher with luxury, Wall Street hesitant at mid-session – 01/26/2024 at 6:23 pm

A trader on the Frankfurt Stock Exchange

By Augustine Turpin

European stock markets ended sharply higher on Friday on strong results from LVMH and Remy Cointreau, while US inflation data bolstered investors’ hopes of an imminent cut in interest rates by the Federal Reserve.

In Paris, the CAC 40 rose 2.27% to close at 7,633.31 points. British FTSE rose 1.41% and German DEX rose 0.26%.

The EuroStoxx 50 index rose 1.09%, the FTSEurofirst 300 1.1% and the Stoxx 600 1.08%.

Data released by the U.S. Commerce Department on Friday showed that consumer prices rose modestly last December, keeping the annual increase in inflation below 3 percent for the third consecutive month, which could allow the Federal Reserve (Fed) to start cutting its rates. .

The data, which signaled an easing of pressure on prices, reassured investors an hour before the bell, allowing American indices to move into the green around 4:00 pm GMT.

At the close in Europe, the Dow Jones was up 0.3%, the Standard & Poor’s 500 was up 0.2% and the Nasdaq Composite was flat.

European markets, already buoyed by a series of positive quarterly results releases and a slightly dovish turn in the ECB’s comments on inflation on Thursday, also weighed on their gains at the end of the session following the release of American data.

LVMH’s better-than-expected results marked particularly sharp trading, with shares on the Paris stock exchange sharply rising, dragging the rest of the luxury sector and personal and household goods in its wake.

The personal and household goods category rose 5.04% and the index of the ten largest European luxury stocks rose 6.5%.

values

LVMH closed up 12%, Remy Cointreau 15.7%, Richemont 6.3%, Moncler 8.8%, Pernod Ricard 8%, Hermes 6% and Kering 6.7%.

Today’s indicators

France’s household confidence index rose in January, slightly above estimates, according to the INSEE monthly economic survey.

Bank lending to euro zone businesses rose modestly in December, according to the latest data from the European Central Bank (ECB), raising hopes that credit growth will recover after a long period of erosion.

The ECB also said in a survey that euro zone inflation may fall faster than expected this year as economic growth remains anemic.

changes

The dollar fell against a basket of benchmark currencies (-0.2%) but is on track to record a fourth straight weekly gain, while the euro rose 0.19% to $1.0867.

rate

Euro zone bond yields were unchanged on Friday, rising after the release of US inflation data.

The ten-year German Bund yield rose 1.4 basis points (bps) to 2.294%.

US bond markets are also advancing, with the ten-year Treasury up 0.5 bps to 4.1373% and the two-year Treasury up 3.1 bps to 4.3448%.

Oil

Oil prices eased slightly but were still headed for a second straight weekly gain, driven by US economic growth data and signs of recovery in China, a context still marked by conflicts in the Middle East and supply concerns.

Brent fell 0.62% to $81.92 a barrel, American light crude (West Texas Intermediate, WTI) fell 0.89% to $76.67.

(Writing by Augustine Turpin, Editing by Sophie Luet)