(Paris) The prospect of the end of the cycle of central bank rate hikes supported European stocks on Friday, while Wall Street was more cautious.
On the New York Stock Exchange, the three major indexes were hovering around equilibrium around 11:55 a.m. EST: the Dow Jones lost 0.06%, the NASDAQ 0.22%, and the S
The Frankfurt Stock Exchange ended up 0.41% and set new records at the close (16,357.63 points) and in the session (16,427.42 points).
“The Dax is considered a laggard” compared to European stock markets which have already broken records for several months “and a beneficiary of the economic recovery in China”, according to Andreas Lipkow, an independent analyst.
Paris gained 1.34% and Milan 0.47%. Along with Frankfurt, they all saw increases of around 2.5% on the week, their best performance in two months. London gained 1.09% for the week and 0.19% on Friday.
“Expectations of further stimulus from China and the belief that the current cycle of policy rate hikes is about to end,” drove the indices, comments CMC analyst Michael Hewson. Markets.
In the bond market, the interest rate on two-year US debt, the maturity most sensitive to monetary policy expectations, rose to 4.73%, against 4.65% at the close Thursday.
“The consensus of analysts had expected a pause (in rate hikes, editor’s note) in June and a hike in July, it is adjusting to the fact that there could be another hike after July”, analyzes Yann Azuelos, manager at Mirabaud.
For former Fed Vice Chairman and current Pimco Global Economic Advisor Richard Clarida, “there is a disconnect between what the markets think about the path of rates and the forecasts of Fed members,” said he observed Friday at a conference.
He attributed the difference to different expectations for the level of inflation in the United States by the end of the year, with financial markets more optimistic than the Fed.
Luxury stocks rose sharply on Friday, supported by “the hope of new measures to support the Chinese economy”, according to Yann Azuelos.
The central bank of China this week cut two of its key rates, measures that aim to support the economy.
In Paris, the CAC 40 particularly benefited from increases in LVMH (2.95%), Hermès (1.84%) and Kering (2.19%).
In Milan, Moncler gained 2.60% and in Zurich, Richemont gained 3.08%.
Virgin Galactic was off 15.76% after announcing a first commercial spaceflight on June 27, followed by another in August, with the company hoping to move to a monthly cadence thereafter.
Oil ended the week on Friday up slightly, caught between hopes of support for demand with the pause in the cycle of Fed rate hikes, the jump in commercial crude reserves in the United States and concerns about to China’s economic health.
By 11:50 a.m. EST, a barrel of Brent North Sea oil, for August delivery, was up 0.07% at $75.72.
Its American equivalent, a barrel of West Texas Intermediate (WTI) for delivery in July, took 0.44% to 70.93 dollars.
The price of the European reference contract for natural gas, the Dutch TTF, fell by 19.89% to 32.96 euros per megawatt hour, catching its breath after its surge the day before, approaching 50 euros per MWh, a price more high since early April.
The European currency fell slightly against the dollar (-0.18%) to 1.0925 dollars after rising sharply this week.