by CORENTIN CHAPRON

PARIS (Reuters) – European stock markets ended lower on Thursday after a stronger-than-expected inflation indicator in the United States, which removes the prospects of rate cuts from the American Federal Reserve (Fed).

In Paris, the CAC 40 lost 0.52% to 7,387.62 points, while the German Dax fell by 0.86% and the British Footsie by 0.98%.

The EuroStoxx 50 index ended the session down 0.6%, compared to 0.76% for the FTSEurofirst 300 and 0.77% for the Stoxx 600.

Markets were concerned about a stronger than expected CPI inflation indicator in the United States, with price dynamics reaching 3.4% in December, compared to 3.1% in November and 3.2% expected.

Underlying inflation also surprised on the rise, increasing by 3.9% over one year against 3.8% expected.

This publication and the recent monthly report on American employment, which was stronger than expected, call into question the central market scenario of a painless return of inflation to its target which would allow the Fed to lower quickly its rates.

“The rate of disinflation is less spectacular than last summer but it should nevertheless continue in the coming months,” explains Bastien Drut, head of strategy and economic studies at CPR AM, who emphasizes that the effects basic on energy have played a role.

“This report will not cause the Fed to deviate from the pivot, (because it has) clearly in mind that disinflation will not be perfectly linear.”

Investors are also positioning themselves before the opening of the quarterly and annual results season with the publication, on Friday, of the results of JPMorgan Chase, Bank of America, Citigroup and Wells Fargo.

VALUES

Teleperformance rose 3.98% after Exane BNP Paribas resumed monitoring the stock with an “outperform” recommendation.

Rational rose 6.69% as the industrial kitchen retailer’s preliminary results beat market expectations.

Pharmaceutical company Grifols, reported on by short seller Gotham City Research, fell 16.17% after a conference call held by the group’s management.

Ambu gained 5.01% after Nordea raised its recommendation to “buy”.

A WALL STREET

Wall Street retreats at closing time in Europe, worried about the implications of a stronger CPI inflation figure than consensus expected.

At closing time in Europe, trading on the New York Stock Exchange indicated a drop of 0.65% for the Dow Jones, 0.86% for the Standard & Poor’s 500 and 1% for the Nasdaq Composite. .

Microsoft’s capitalization surpassed that of Apple on Thursday to become the world’s largest capitalization, the group taking advantage of its lead in artificial intelligence.

RATE

Yields in Europe closed without a marked direction despite the publication of a stronger-than-expected CPI inflation indicator and lower weekly jobless claims.

The German ten-year yield remained stable at 2.207%, while the two-year rate lost 1.5 bps to 2.633%.

In the United States, the ten-year Treasury yield rose 1.1 bp to 4.0415%, compared to a decline of 3.2 bp for the two-year rate, to 4.3393%.

CHANGES

The dollar strengthened after the publication of the stronger-than-expected CPI inflation indicator, which raised fears that the Fed rates would remain at their current levels for longer than expected.

The greenback gained 0.31% against a basket of reference currencies, while the euro lost 0.3% to 1.0938 dollars. The pound sterling fell 0.24% to $1.2709.

OIL

Iran seized an oil tanker bound for Turkey on Thursday, raising market fears of an escalation of the conflict in the Middle East and supporting crude prices.

Brent increased by 2.51% to $78.73 per barrel and American light crude (West Texas Intermediate, WTI) increased by 2.84% to $73.4.

TO BE CONTINUED FRIDAY:

(Written by Corentin Chappron, edited by Blandine Hénault)

Copyright © 2024 Thomson Reuters