General view of the Frankfurt Stock Exchange
The European stock markets are progressing on Thursday mid-session despite a context marked by American political and economic uncertainty, while the American markets are closed.
In Paris, the CAC 40 rose 0.39% to 7,481.64 points around 11:30 GMT. The Dax in Frankfurt dropped 0.13%, while the FTSE in London rose 0.63%.
The pan-European FTSEurofirst 300 index gained 0.16%, the EuroStoxx 50 gained 0.16% and the Stoxx 600 0.16%.
Wall Street is closed on Thursday due to a day of national mourning in the United States for the funeral of former US President Jimmy Carter.
The context continues to darken for European markets: uncertainty over the measures that American President Donald Trump, sworn in on January 20, will take, calls for caution.
In addition to the customs duties that the 47th President of the United States could implement on this occasion, measures on immigration, taxes or the budget remain potential sources of inflation, a risk highlighted by the Federal Reserve in the minutes of its last meeting, published Wednesday.
However, price dynamics remain resistant to rate increases by the central bank, while the latest employment indicators suggest that labor markets remain resilient.
The markets will await the monthly employment report from the Department of Labor on Friday, which could provide more information on the American economic trajectory.
Indicators published this week, however, suggest that the figures could once again reflect the ironclad demand for labor, helping to ward off further rate cuts from the Fed.
The markets are also carefully following the progression of long-term rates in the United Kingdom.
High inflation, fiscal spending deemed too high, rising US yields and a plentiful supply of securities pushed the 30-year Gilt rate to a record high since 1998 on Thursday, putting pressure on the pound.
“Such levels of long-term rates will probably limit Chancellor Rachel Reeves’ budgetary room for maneuver, particularly in a context of weak growth or, more precisely, stagflation. In this environment, market mistrust could persist in the short term,” warn Natixis strategists.
VALUES IN EUROPE Carmat reported on Wednesday a solid financial year in 2024 and gained 7.7%.
-Teleperformance jumped 4.7%, at the top of the CAC40, Morgan Stanley having raised its price target on the group.
The results of British retailers Tesco and Marks & Spencer disappointed investors on Thursday despite strong performances over the Christmas period, pushing the shares down 1.3% and 6.6% respectively. The distribution sector posted the worst performance of the Stoxx 600, down 1.9%.
Vat reported fourth-quarter net sales of 283 million Swiss francs on Thursday, lower than consensus expectations, and falling 5.9%.
RATE
Yields are rising in the Eurozone and the United Kingdom as investors worry about persistent services inflation. The yield on the German ten-year rose by 1.6 basis points (bp) to 2.54%, that of the two-year rate rose by 2.3 bps to 2.225%.
The yield on the British ten-year rose 6.4 bp to 4.862%, reaching its highest level since 2008 during the session.
CHANGES
The pound collapses against the dollar, under pressure from the rebound in British bond yields. The dollar gained 0.09% against a basket of reference currencies, the euro eroded by 0.17% to $1.03, and the pound sterling lost 0.65% to $1.2282.
OIL
Crude inventories in the United States increased last week in the United States, according to data from the American Energy Information Administration, but strong demand for fuel and heating is supporting crude prices.
Brent rose by 0.3% to $76.39 per barrel, American light crude (West Texas Intermediate, WTI) rose by 0.22% to $73.48.
NO MORE MAJOR ECONOMIC INDICATOR EXPECTED THIS DAY
(Written by Corentin Chappron, edited by Kate Entringer)
