(New York) European markets ended higher on Thursday, with a few record highs, thanks to corporate results, while Wall Street coughed after the publication of a high inflation indicator.
The European stock market was driven by good corporate results. Paris rose by 0.89%, London by 0.18%, Frankfurt by 0.18% and Milan by 1.16%.
Earlier, the Paris Stock Exchange reached a new record, at 7387.29 points.
The FTSE 100, the main index of the London Stock Exchange, which has been breaking record after record for several days, closed above 8000 points for the first time in its history. Frankfurt and Milan are also approaching their peaks.
The atmosphere was less festive on Wall Street, where the Dow Jones fell 1.26%. The NASDAQ index fell 1.78% and the broader S&P 500 index dropped 1.38%.
The producer price index (PPI) emerged up 0.7% in January over one month, the highest level since June and significantly above economists’ projections (+0.4%).
Data that “has undermined the scenario of disinflation” on which the markets had been banking since the beginning of the week, underlines Michael Hewson, analyst at CMC Markets.
After Tuesday’s release of the CPI consumer price index, also above forecasts, the jump in producer prices “will force the Fed to stay on the offensive”, warns Edward Moya of Oanda, “and this is bad news for equity markets.
“Weekly jobless claims have remained low,” adds Hewson. Other bad macroeconomic figures were published on Thursday and further complicate the reading of the economic situation in the United States.
Statements from a member of the Fed confirmed these fears. “Loretta Mester, who is director of the Cleveland Fed, considers it more appropriate, in the current context, to see a 50 basis point hike in Fed rates”, reports Charles de Riedmatten, equity manager of Myria AM, adding She wouldn’t be the only one to think so.
In reaction, interest rates for sovereign bonds briefly jumped before returning close to their closing levels the day before. They are nevertheless around their highest since the beginning of the year both in the United States and in Europe.
Thursday, the yield of the 10-year US bond, the maturity that refers, was worth 3.86%, against 3.81% the day before, the highest since the beginning of the year. That of Germany reached 2.48% and the French 2.94%.
The dollar also rose before calming its rise. It was worth 0.9370 euro for one dollar (+0.14%).
Auspicious results
Airbus generated in 2022 the largest net profit in its history (4.2 billion euros). The stock rose 4.94%.
The second German bank Commerzbank, whose annual net profit more than tripled over one year, took off by more than 11% in Frankfurt.
Tesla falls after massive recall
Tesla slipped at the end of the session (-5.69%) after the announcement of the recall of more than 360,000 vehicles of the brand, which will have to go through an update of the FSD driver assistance software, after a dispatcher reported malfunctions that could cause accidents.
On the side of oil and currencies
Oil prices fell slightly on Thursday, further digesting the massive influx of crude inventories in the United States and despite the upward revision of forecasts for global crude consumption by major energy agencies.
A barrel of Brent from the North Sea for delivery in April lost 0.28% to 85.14 dollars.
Its US equivalent, a barrel of West Texas Intermediate (WTI) for delivery in March, fell 0.12% to 78.49 dollars.
Bitcoin rose 1.77% to $24,518, after earlier crossing the symbolic threshold of $25,000, a first since August.