NewsWorldEurope ends in the green, inflation and consumption reassure...

Europe ends in the green, inflation and consumption reassure the United States

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EUROPEAN STOCK MARKETS END UP by Claude Chendjou PARIS (Reuters) – European stock markets ended higher on Friday and Wall Street was also in the green mid-session, with equity markets supported by new economic indicators in the States United States which shows a slowdown in inflation while consumer spending remains strong. In Paris, the CAC 40 ended with a gain of 1.64% to 6,515.75 points. The British Footsie took 0.27% and the German Dax 1.62%. The EuroStoxx 50 index advanced 1.83%, the FTSEurofirst 300 1.45% and the Stoxx 600 1.42%. Over the week as a whole, the Parisian index gained 3.66% and the Stoxx 600 2.98%, ending a series of eight weeks of weekly declines thanks to statistics that have reassured investors since the publication on Wednesday of the minutes of the last monetary policy meeting of the American Federal Reserve (Fed). Another statistic, released this Friday by the US Department of Commerce, shows that the “core PCE” price index, the measure of inflation favored by the Fed, slowed in April to 0.3% and 4.9% on a monthly and annual basis, against a gain of 0.3% and 5.2% respectively in March. At the same time, consumer spending, which accounts for more than two-thirds of economic activity in the United States, continued to advance, by 0.9% last month, after a jump of 1.4% (revised from 1, 1%) the previous month. These data fuel the prospect of less drastic monetary tightening than initially anticipated. In the euro zone, the President of the European Central Bank, Christine Lagarde, also spoke out in favor of a gradual increase in the cost of credit while the German inflation figures will be published on Monday. A sign of renewed optimism in the markets, the index measuring volatility fell for the third consecutive session, to 25.9 points, in the United States, and in Europe, it ended down 7% at 23.8 points. SECURITIES IN EUROPE On the pan-European Stoxx 600, the positive trend was mainly driven by the cyclical consumer sector (+2.7%), high technologies (+2.2%) and industry (+1.8 %), while the utilities (-0.8%) and energy (0.2%) compartments posted the two largest declines. Luxury stocks such as Kering (+4.5%), LVMH (+3.8%), Hermès (+4.4%) and Richemont (+9.5%) were particularly sought after. In business news, Maisons du Monde plunged 26.9% due to the group lowering its annual forecast amid rising costs. JCDecaux (-0.7%) and Unibail-Rodamco-Westfield (-2.7%) were penalized by recommendation downgrades from JP Morgan and Goldman Sachs respectively. A WALL STREET At the time of closing in Europe, the Dow Jones advanced by 0.98%, the Standard & Poor’s 500 by 1.64% and the Nasdaq by 2.4%. All the main sectors of the S&P are evolving in the green, the compartment of new technologies (+2.6%) and that of consumption (+2.2%) posting among the best performances. Dell soared 11% on quarterly forecasts above expectations, while cosmetics distributor Ulta Beauty jumped 9.1%, buoyed by its strong first-quarter results. On the downside, the ready-to-wear chains GAP and American Eagle Outfitters fell about 5% in reaction to a lowering of their annual forecasts. FOREIGN EXCHANGES The index measuring the fluctuations of the dollar against a basket of reference currencies is virtually unchanged (+0.04%) and is on its way to its biggest weekly drop (-1.3% at this stage) in nearly four months due to the downward revision by rate hike expectations in the United States. The euro, down 0.12% to 1.0710 dollars, rose during the session to 1.0765, its highest level since April 25. RATES Bond yields fell again in the prospect of easing fears of a rapid rise in interest rates. The ten-year German Bund fell about three basis points to 0.961%, as several European Central Bank officials recently ruled out a half-point rise in the institution’s rates in July. The yield on US Treasury bonds of the same maturity fell two points to 2.7378% after briefly rising following the publication of statistics on household income and expenditure in the United States. OIL Oil prices are little changed on Friday but should post a gain for the whole week linked to fears of a tightening of supply, the prospect of an increase in demand as the summer season approaches and a possible European embargo on Russian hydrocarbons.[nL5N2XJ2W2 Brent rose 0.38% to $117.85 a barrel and US light crude (West Texas Intermediate, WTI) edged up 0.06% to $114.11. THINGS TO LOOK FOR MONDAY: Markets will remain closed on Monday in the United States due to Memorial Day, while in Europe the first estimate of German inflation for May will be published at 12:00 GMT. (Written by Claude Chendjou, edited by Sophie Louet)

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