The Frankfurt Stock Exchange, Germany
European stock markets almost all ended in decline on Thursday after several sessions of progress, in a context of caution following several negative US activity indicators and before statements from monetary policy officials.
In Paris, the CAC 40 fell 0.57% to 7,168.4 points, compared with 1.01% for Britain’s Footsie. Exception: Germany’s Dax gained 0.24%, supported by Siemens’ performance.
The EuroStoxx 50 index ended the session down 0.3%, compared with 0.57% for the FTSEurofirst 300 and 0.72% for the Stoxx 600.
Several US indicators confirmed the slowdown in activity across the Atlantic, two days after the release of inflation data that showed a sharper decline than markets expected.
Industrial production fell twice as fast as expected, by 0.6% month on month, imports shrank and the business outlook, as measured by the Philly Fed index, has deteriorated.
Most importantly, unemployment claims were higher than expected, while the strength of the labor market has been one of the main inflation drivers in the United States in recent months.
All these indicators give markets hope that the Federal Reserve’s rate hikes are indeed over, but many members of the institution’s board of governors will speak in the coming days, calling for caution.
Despite the fall in oil prices and government bond yields, markets consolidated their gains this Thursday, following a recovery in recent days, with the Stoxx 600 hitting a one-month high on Wednesday.
Crude oil prices are falling due to concerns about demand in the United States, where inventories are rising, data from the American Energy Information Administration shows. Inventories rose by 3.4 million barrels last week, almost twice as much as markets expected.
Brent fell 4.3% to $77.69 per barrel, US light crude oil (West Texas Intermediate, WTI) fell 4.59% to $73.14.
Yields fell sharply amid weak economic data that pointed to a slowdown in U.S. activity.
At the close of the European interest rate markets, the yield on ten-year government bonds fell by 7 basis points to 4.4667%, while the two-year yield fell by 6.8 basis points to 4.8481%.
The yield on the German ten-year rate fell by 4.5 basis points to 2.586%, while that on the two-year rate fell by 6.3 basis points to 2.95%.
Vallourec climbed 5.2% after the steel pipe maker raised its outlook for annual gross operating income, citing a favorable market environment in the Eastern Hemisphere.
Burberry has warned that its sales growth forecast for the current financial year may have to be revised downwards as global luxury spending slows. The stock fell 1.15%, taking with it the luxury sector, which fell 1.47%. LVMH lost 1.79%, Kering 2.69%, Richemont 1.83% and Moncler 2.62%.
The energy sector fell 2.71%, while crude oil fell, amid concerns about oil demand. Total lost 2.64%, one of the worst performances on the CAC 40.
Siemens reported a record quarterly profit for its industrial division on Thursday, sending its shares up 5.7% despite a more cautious sales outlook for 2024 due to continued destocking among Chinese customers.
Hellofresh fell 22.4%, lagging the Stoxx 600, after the meal kit maker cut its forecast for fiscal 2023 on Wednesday, citing weaker sales growth and higher-than-expected spending in the North American unit.
Wall Street is also consolidating after five sessions of gains and worse-than-expected activity indicators.
At close of business in Europe, trading on the New York Stock Exchange indicated a decline of 0.42% for the Dow Jones, 0.21% for the Standard & Poor’s 500 and 0.41% for the Nasdaq Composite.
The dollar is wavering after the release of several indicators pointing to a decline in activity in the United States, which could prompt the Federal Reserve to reassess the trajectory of its interest rates.
The dollar is stagnant against a basket of benchmark currencies, while the euro is immobile at $1.0848. The British pound is stable at $1.2417.
(Written by Corentin Chappron, edited by Bertrand Boucey)