Europe’s stock market is facing a contraction in US GDP

from Leticia Volga

PARIS (Reuters) – European stock markets ended higher on Thursday, but below their daily highs, as the positive effect of corporate results was hampered by the unpleasant surprise of the US economy.

In Paris, CAC 40 rose 0.98% to 6508.14 points. The British Footsie rose by 1.13% and the German Dax – by 1.35%.

The EuroStoxx 50 index rose 1.13% and the FTSEurofirst 300 rose 0.6%. The Stoxx 600 rose 0.62% to + 1.35% at the peak of the day.

According to the first estimate of the Ministry of Commerce, the relief caused by many good corporate results disappeared after the announcement of a sudden downturn in the US economy in the first quarter.

US GDP fell 1.4% year on year in January-March against 6.9% growth in the fourth quarter and + 1.1% expected by consensus.

“While consumer spending rose + 2.7% … inventories and trade depressed GDP … Overall, these results are unlikely to dispel fears that the table economy is bleak and significant risks and cracks are already apparent.” Said Matt Perón, director of research. Investors Janus Henderson.

The New York Stock Exchange also narrowed its opening gap: the Dow Jones rose 0.46%, the S&P 500 by 0.79% and the Nasdaq Composite by 0.57%.

The latter gained almost 2% at the beginning of trading, thanks to rising shares and Meta Platforms, whose shares rose 13.97% at the European close after profits and growth in the number of Facebook users exceeded expectations in the first quarter.

VALUES

At the top of CAC 40 are three components of the technology compartment: Capgemini (+ 5.15%), after increasing its activity in the first quarter, Dassault Systèmes (+ 5.72%), which benefited from the positive note of Barclays. to “overweight”, and Atos gained 6.10%.

TotalEnergies rose 3.66% after announcing a new share buyback in the first three months of the year.

In London, Standard Chartered jumped 14.16% after bypassing the consensus.

Unibail-Rodamco-Westfield lost 4.25%, despite an increase in quarterly sales to 734.5 million euros.

RATE

In the bond market, the ten-year German exchange rate rose sharply after the publication of preliminary data on inflation in Germany, which in April reached its highest level since 1981 at 7.8% in one year against 7.6% expected by consensus in March.

“Markets are very sensitive to inflation data. Even figures that are slightly higher than expected are causing speculation about a more militant central bank,” said Antoine Bouvet, ING’s strategist.

Money markets have raised the ECB’s rate by 85 basis points this year, up from 80 basis points on German data.

In the United States, yields on ten-year Treasury bonds rose five basis points to 2.8726%.

CHANGES

The yen rose above $ 130 a dollar for the first time in 20 years after the Bank of Japan (BoJ) reaffirmed its promise to pursue excessive monetary policy by pledging to buy an unlimited number of bonds every day to defend its return target. .

The dollar index, which measures changes in the dollar against six other currencies, has slowed since the fall in US GDP.

It still stands at 0.69% to 103.666, after more than five years of peaking at 103.93, using the discrepancy between the monetary policy of the Fed and the Bank of Japan.

The euro fell 0.52% to $ 1.05.

OIL

Oil prices are rising after the Wall Street Journal reported that Germany no longer opposes the European embargo on Russian oil.

Brent rose 1.13% to $ 106.51 a barrel and US West Light Intermediate (WTI) rose 1.76% to $ 103.82.

INDICATOR OF THE DAY

The number of unemployment claims in the United States fell by 5,000 to 180,000 last week, as expected by the Reuters consensus.

(Leticia Volga, edited by Bertrand Busi)