Europe’s main markets ended the trading week on a positive note, with investors positively interpreting the macroeconomic data announced on Friday on the other side of the Atlantic.
Particularly, consumer confidence strengthened in August in the US, while expectations for the course of inflation also improved. Consumer confidence climbed to 55.1 in August from 51.1 in July, according to a University of Michigan index, beating economists’ expectations.
A gauge of how U.S. consumers feel about their finances and the health of the economy fell to 55.5 in August from 58.1 in July, while a measure of consumer expectations for the next six months climbed to 54.9 points in August from 47.3 the previous month.
In addition, consumers expect inflation to be at 5% over a one-year horizon, down from the 5.2% they forecast in July.
Alongside, US import prices posted their first decline in seven months in July, in the biggest monthly decline since April 2020. According to data released by the US Labor Department, the import price index fell 1.4% in July after rising 0.3% in June. The reading was worse than analysts’ estimate of a 1% drop.
It is worth noting that Allianz financial adviser and president of Queens College, Cambridge, Mohamed El-Erian warned that investors should not take too much heart from the positive inflation reading, because the Fed will likely not slow its rate hikes as the economy is quite strong.
Back in Europe, the UK economy shrank slightly in the second quarter of the year as the cost of living crisis appears to be weighing on the country. In particular, the data published showed that the GDP of Great Britain contracted by 0.1% in the second quarter of the year, however, “beating” market estimates that expected a decrease of 0.3%.
In this climate, the pan-European index Stoxx 600 It edged up 0.16% to 440.87, with the travel and leisure sector up 3.9% while retail shares fell 0.4%. In weekthe Stoxx 600 gained 1.25.
In the individual boards, the German DAX recorded gains of 0.74% to 13,795.85 units, the French CAC 40 closed at +0.14% and 6,553.86 points, as did the British FTSE 100 which strengthened by 0.47% to 7,500.89 units.
A similar picture in the markets of the European region, where in Italy the FTSE MIB added 0.49% to 22,970.73 units, and the Spanish IBEX 35 climbed to 8,400.40 points with an increase of 0.24%.
In individual stocks, British paper and packaging company Mondi rallied more than 11 percent to top the Stoxx 600 after agreeing to sell its Russian subsidiary for $1.56 billion.
German energy giant Uniper rose about 10% after a Reuters report showed ready to swap liquefied natural gas (LNG) supplied by Australia’s Woodside for US natural gasso that it can more quickly boost Europe’s supply during the coming winter.
At the bottom of the index, the German railway brake system company Knorr Bremse with a “plunge” of 11%.
Source: Capital
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