(Paris) European stocks ended in the green, following the trend of Wall Street, after a period of uncertainty in the face of slowing inflation in the United States and weak European growth.
In New York, the Dow Jones rose 0.60%, the S
European markets caught up with their dropout at the start of the session, digesting a week marked by corporate results and punctuated on Friday by rather gloomy European GDP publications.
The eurozone narrowly avoided recession as growth plateaued at 0.1% in the first quarter. After the publication of these figures, bond yields on European government debt fell sharply, that of German 10-year debt was worth 2.31% around 11:50 a.m. (Eastern time), compared to 2.46% the previous day. .
Frankfurt ended up 0.77%, London 0.50%, Paris 0.10%, while Milan lost 0.30%.
The PCE index, the inflation indicator most followed by the American central bank, posted a slowdown on Friday to 4.2% year on year, against 5.1% the previous month.
Under particular scrutiny by the markets, core inflation in the United States slowed to 4.6% (vs. 4.7% previously).
This indicator, which excludes the most volatile prices, such as those of energy and food, is considered more reliable by investors for judging the sustainability of the rise in prices in the economy.
While it is “hard to draw positive or negative conclusions” from all the indicators published on Friday, “the market has decided to take the slowdown in inflation” as good news “after a difficult week”, explains Andrea Tuéni, analyst of Saxo Bank, with AFP.
Market moderation is also explained by “the desire not to take risks while waiting” for the meeting of the American central bank, the Fed, scheduled for May 2 and 3.
The markets seem certain that the monetary institution will once again raise its key rate by 0.25 percentage points, but still hope that it will give indications for a more accommodating policy for the coming months.
In the bond market, interest rates on two-year US debt, the most sensitive to monetary policy expectations, fell slightly to 4.05% around 11:50 a.m. at 10 years fell more sharply to 3.44%.
Amazon posted, like its major competitors, a first quarter above expectations, which confirms the recovery of the group’s trajectory.
Results nevertheless deemed insufficient by Wall Street where the title lost 4.02% around 11:50 a.m. (Eastern time). The New York market was harshly correcting Snap, parent company of Snapchat and its first quarter results, its share losing 18.33%.
Banking uncertainties returned to center stage, with regional bank First Republic Bank suspended from trading after another plunge of 50.08% to $3.09.
UK bank Natwest reported higher profit thanks to interest rates, but the stock fell 3.75% in London.
The trend has affected all European banks. Banco Sabadell fell by 7.14% in Madrid, Commerzbank by 3.96% in Frankfurt and UniCredit by 3.75% in Milan.
These sharp declines illustrate “the overinterpretation and overreaction of the market to a sector which has nevertheless rebounded very strongly” since the crisis of confidence in March, observes André Tuéni. “Banks remain a major stress point in a sluggish market.”
The euro was up 0.08% against the greenback at $1.1037 around 11:50 a.m. EST.
Bitcoin fell 1.57% to $29,165.
The price of oil was trying to rebound after falling during the week below the level that had led to production cuts by major oil exporters in April.
The barrel of Brent North Sea took 1.38% to 79.45 dollars and that of the American WTI 2.07% to 7630 dollars around 11:50 a.m. (Eastern time).