New York (awp/afp) – Worse-than-expected inflation figures in the euro zone initially slowed the stock markets on Tuesday, before more accommodating comments from the head of the American central bank helped to offset the losses somewhat.
The European stock market ended in the red, but lost less ground overall than in the previous half-day: Paris fell by 0.30%, Frankfurt by 0.69% and London by 0.56%. In Zurich, the SMI lost 0.32%.
Wall Street closed in the green, with the Dow Jones stable, rising 0.41% while the Nasdaq (+0.84%) and the S&P 500 (+0.62%) rose to new records.
Inflation fell slightly in June in the eurozone, to 2.5% over a year, but not enough to convince the European Central Bank (ECB) to accelerate the reduction of its interest rates to deal with sluggish growth.
Core inflation – that is, excluding volatile energy and food prices -, the most closely watched by financial markets and the ECB, remained stable at 2.9% over a year, according to the European statistics office. The consensus among analysts was a slight decline to 2.8%.
“The stability of core inflation and that of services in June constitute a disappointment” but they do not yet compromise a rate cut at the September meeting, according to Juliette Cohen, strategist at CPR AM.
ECB President Christine Lagarde sounded a cautious tone on Monday during the first day of the institution’s annual forum in Sintra, Portugal.
On Tuesday, his American counterpart reiterated that if inflation had made “progress”, the monetary institution was “waiting to have more confidence” in the slowdown in the rise in prices “before starting to ease monetary policy”.
These comments from Jerome Powell were enough to relax the bond market a little, after several days of sharp recovery, according to David Kruk, head of trading at La Financière de l’Echiquier.
The interest rate on the American loan stood at 4.43% compared to 4.46% the day before. In Europe, French and German rates for the same maturity also fell, the French rate more than that of its neighbor.
Among other indicators of the day, the number of vacant jobs in the United States in May increased compared to April, at a level higher than analysts’ expectations.
The main event is the official employment report on Friday. On Wednesday, the New York Stock Exchange will be closed for business in preparation for the July 4 holiday on Thursday, when U.S. markets will be closed.
Tesla surprises ___
Tesla shares soared 10.20% as the electric carmaker delivered 443,956 vehicles in the second quarter, fewer than a year earlier but more than analysts had expected.
Its rival Rivian, which specializes in electric pickups and trucks, gained 6.97% after also exceeding market expectations for its vehicle deliveries in the second quarter.
Pharmacy under pressure ___
American laboratories Eli Lilly (-0.84%) and Danish Novo Nordisk (-1.68%) suffered while American President Joe Biden denounced “the unthinkably high prices” of diabetes and obesity drugs from these pharmaceutical companies.
“If drug companies refuse to significantly lower prescription drug prices in our country and refuse to end their greed, we will do it ourselves,” the American president declared in an op-ed published in USA Today.
Oil in decline ___
Oil prices stumbled from their April highs before retreating, in a market that lacks certainty about the health of demand.
The price of a barrel of North Sea Brent crude fell by 0.41% to close at $86.24.
Its American equivalent, a barrel of West Texas Intermediate (WTI), fell by 0.68% to $82.81.
The single European currency gained 0.06% at around 8:22 p.m. GMT against the greenback, at 1.0746 dollars for one euro.
Bitcoin fell 2.09% to $61,917.
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