European stocks close at highest level in over three years after U.S. inflation print

European markets closed at their highest level in nearly four years on Thursday, despite a choppy afternoon following the release of U.S. inflation data.The Stoxx 600 index closed higher by 0.7%, with most sectors and major bourses in positive territory. This was a pan-European index, so it includes many different countries.

January 12, 2023

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European markets closed at their highest level in nearly four years on Thursday, despite a choppy afternoon following the release of U.S. inflation data.
The Stoxx 600 index closed higher by 0.7%, with most sectors and major bourses in positive territory. This was a pan-European index, so it includes many different countries.
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Retail stocks had the biggest gains, rising by nearly 2%. Chemicals and healthcare stocks both fell by around 0.1%.
The December CPI report showed a monthly dip of 0.1%, in line with economist expectations. This compared to a 0.1% monthly gain in November and an annual pace of 7.1%.
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After a rocky start, U.S. stocks managed to climb into positive territory by midday. The Dow Jones Industrial Average was up 0.4% at the noon hour.
Huw Roberts, head of analytics at Quant Insight, told CNBC that the inflation print had not given any guidance to markets. He said that investors may look to speeches from Fed officials on Thursday and Friday for further clues.
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European stocks ended the day up 0.6%, despite a choppy afternoon following the release of U.S. inflation data. The data showed that inflation in the U.S. was higher than expected, which caused some investors to sell off their stocks. However, overall, European stocks still ended the day up.
The Stoxx 600 index reached its highest level since April 2022, while the U.K.'s FTSE 100 index gained another 0.9%. The FTSE is now close to its all-time high of 7877.45 points.
Both France's CAC 40 and Germany's DAX were up 0.74%.
Retail stocks led the way in today's trading, climbing 1.88%. This was the best performance of any sector, and helped to push the overall market higher.
The three major indexes were volatile in early trading Thursday as investors continued to digest the CPI data.
At 9:35 a.m., the Dow was down slightly, by 0.1%. The S&P 500 also lost 0.1%, while the Nasdaq Composite was down by 0.2%.
The three indexes all opened at 9:30 a.m.
The U.S. consumer price index fell 0.1% in December, in line with the Dow Jones estimate. This is the first time the index has fallen in four months.
This was the largest monthly decrease since April 2020.
The headline CPI figure for the year was 6.5%, but this was the smallest figure since October 2021.
European stocks fell, then rose sharply on the news before trimming gains. This volatility was likely due to investors trying to digest the news and figure out its implications for the markets.
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Thomas Moser, alternate member of the governing board of the Swiss National Bank, said that he does not yet see a need for the central bank to issue a digital currency.
Central banks around the world are exploring the use of CBDCs (central bank digital currencies). This new type of currency has the potential to revolutionize the way we conduct transactions and could have a major impact on the global economy.
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The Volkswagen Group reported its lowest sales in more than a decade in 2022, according to Reuters. The company contended with Covid-19 lockdowns in China and with supply chain challenges caused by the war in Ukraine.
The German automaker said Thursday that it delivered 8.3 million vehicles to customers last year, a 7% decline compared to 2021.
Hildegard Wortmann, a member of the extended executive sales committee, has said that weakening global economies and supply chain shortages will continue to cloud the outlook for 2023.
Volkswagen's sales figures have put it behind Toyota Group for a third year in a row in terms of production. The Japanese carmaker had already produced 9.5 million cars by November, according to Reuters.
European stocks surged to their highest level in over two years on Thursday morning, with all sectors in positive territory. The strong showing came as investors bet on a continued economic recovery from the pandemic.
At 9:50 a.m. London time, the Stoxx 600 index was trading around 450.19. Travel and leisure stocks led the gains, up 1.4%.
The automotive, banking, retail, and telecommunications sectors were all trading more than 1% higher.
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Shares of French video game publisher Ubisoft plunged more than 21% in early trade after the company cut its revenue guidance, postponed the release of its new game “Skull & Bones” and cancelled three unannounced games. The company attributed the cuts to weaker-than-expected sales of its latest game, “Assassin’s Creed Origins”.
Logitech, a Swiss company that makes computer peripherals, saw its stock drop more than 14% after it missed quarterly earnings expectations and cut its sales outlook.
Centrica, the owner of British Gas, rose more than 5% to the top of the European blue chip index after raising its full-year earnings forecast.
Inflation in China increased 1.8% in December compared to the same time last year, due to rising food prices, according to data from the National Bureau of Statistics.
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According to a report, the prices of fresh vegetables and fresh fruits rose by 7.0% and 4.7%, respectively.
The CPI figure was as expected by Reuters, and higher than the 1.6% reading from the previous month.
The reading was also flat with November's, improving from a 0.2% decline. This is a positive sign for the economy, as it shows that consumers are still spending despite the current situation.
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China's producer price index fell 0.7% in December from a year earlier, worse than expectations of a 0.1% decline.
China's tech sector has been under pressure in recent years, due to a regulatory crackdown and the fallout from the country's zero-Covid policy.
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Wall Street is starting to show some love for Chinese tech stocks again, and Morgan Stanley has named its “top pick” in the sector.
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As more and more companies invest in sustainability, they are also adopting sustainable practices.
Morgan Stanley has three European stock picks that they believe will be appealing to sustainability-focused investors. These companies not only have strong ESG credentials, but also boast impressive financial performance.
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Stocks rose on Wednesday as investors bet on a positive inflation report due out on Thursday. The consumer price index is a key measure of inflation, and a strong reading could signal that the economy is heating up.
The Nasdaq Composite index gained 1.8% over the course of four days, the longest such streak since September. This rally was driven by strong performance from the tech sector.
The Dow Jones Industrial Average closed up more than 260 points, or 0.8%, on Wednesday.
The S&P 500 rose by 1.3% today, with all 11 sectors finishing the day in positive territory. Real estate led the way, gaining 3.6%.
European markets are set to open higher on Thursday as investors await U.S. consumer price data for December.
According to data from IG, the U.K.'s FTSE 100 index is expected to open 21 points higher at 7,746, Germany's DAX 37 points higher at 14,985, France's CAC up 22 points at 6,946, and Italy's FTSE MIB up 36 points at 25,583.
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