Europe ends higher, renewed optimism after the Fed


EUROPEAN STOCK MARKETS END UP

(Reuters) – European stocks ended higher on Friday as risk-taking was buoyed by better-than-expected corporate earnings in Europe and the United States and hopes of less aggressive monetary tightening from the Reserve. federal despite fears of recession.

In Paris, the CAC 40 ended up 1.72% at 6,448.5 points. The British Footsie took 1.06% and the German Dax 1.52%.

The EuroStoxx 50 index gained 1.53%, the FTSEurofirst 300 1.2% and the Stoxx 600 1.28%.

After the announcement on Thursday of a contraction of the American economy for the second consecutive quarter, investors are still favoring equities, in the hope of a slowdown in the pace of tightening of monetary policy by the American central bank.

Some analysts believe that investors should be cautious, despite this end of the month in the green for risky assets, like Mark Haefele of UBS Global Wealth Management.

“In the near term, we believe the risk/reward ratio for broad equity indices will be moderate…the risk of a deeper collapse in economic activity is high,” the analyst said.

In the euro zone, inflation reached a new record in July while the first estimate of gross domestic product in the second quarter appeared up 0.7%, above estimates. According to economists, however, this could be the last gasp for the economy before entering a recession later in the year.

VALUES

The financial sector (+2.85%) as well as the gas and oil compartment (+2.81%) posted the strongest increases, while the pharmaceutical and health sector index was the only European index to end down (-0.43%).

At individual values, Aperam took nearly 9% after publishing results up on last year, while Elior posted the best performance of the SBF 120 at +14.7%, continuing to take gains after better-than-expected results released on Wednesday.

For its part, Vivendi gave up 7.2% after the publication of its results and having announced that it was considering splitting up Editis in order to avoid any problem of concentration in the context of the takeover of Lagardère.

AT WALL STREET

On Wall Street, growth stocks are supporting US indices, such as Amazon and Apple, up 11.21% and 2.97% respectively, driven by their positive quarterly results.

At the close in Europe, Wall Street was up slightly, the Dow Jones index gained 0.27% to 32,618.11 points and the broader Standard & Poor’s 500 rose 0.85%.

The Nasdaq Composite took 1.03%.

THE INDICATORS OF THE DAY

Consumer spending in the United States rose more than expected in June, at 1.1% against 0.9% expected by economists, the Commerce Department said on Friday. Americans are paying more for goods and services with monthly inflation at its highest since 2005.

CHANGES

On the foreign exchange side, the dollar lost 0.33% against a basket of reference currencies and the euro rose slightly to 1.0207 dollars.

RATE

Bond yields in the eurozone rose sharply after news of a higher-than-expected inflation rate hitting a record 8.9% year on year in July, keeping the European Central Bank under pressure from an acceleration in the pace of its monetary tightening in September.

The German 10-year 10-year ended higher at around 0.8260%, while in the US market, the 10-year Treasuries yield took nearly five basis points to 2.6271%.

OIL

Brent gained 2.85% to 110.19 dollars a barrel and American light crude (West Texas Intermediate, WTI) took 3.94% to 100.22 dollars.

(Written by Olivier Cherfan, edited by Jean-Michel Bélot)

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