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EUROPEAN STOCK MARKS END UP
(Reuters) – European stocks ended higher on Friday as risk-taking was buoyed by better-than-expected corporate earnings in Europe and the United States and hopes of less aggressive monetary tightening by the federal government despite of recession fears.
In Paris, the CAC 40 finished with 1.72% at 6,448.5 points. The British Footsie took 1.06% and the German Dax 1.52%.
The EuroStoxx 50 index gained 1.53%, the FTSEurofirst 300 1.2% and the Stoxx 600 1.28%.
Following Thursday’s announcement of a contraction in the US economy for the second quarter in a row, investors continue to favor equities, hoping for a slowdown in the pace of monetary policy tightening by the US central bank.
Some analysts believe that investors should be cautious, despite this month’s end in the green for risk assets, such as Mark Haefele of UBS Global Wealth Management.
“In the near term, we believe the risk/reward ratio for broad equity indices will be moderate… the risk of a deeper collapse in economic activity is high,” the analyst said.
In the euro zone, inflation reached a new high in July, while the first estimate of the gross domestic product in the second quarter appeared with an increase of 0.7%, above estimates. However, according to economists, this could be the economy’s last gasp before it enters a recession later in the year.
The financial sector (+2.85%) as well as the oil and gas compartment (+2.81%) recorded the largest increases, while the pharmaceutical and healthcare sector index was the only European index to close lower (-0.43%).
In individual stocks, Aperam gained almost 9% after posting better results than last year, while Elior posted the best performance of the SBF 120 at +14.7%, continuing to post gains after better results were posted. than expected on Wednesday.
For its part, Vivendi gave up 7.2% after the publication of its results and having announced that it was studying the spin-off of Editis to avoid any concentration problem in the context of the Lagardère takeover bid.
ON WALL STREET
On Wall Street, growth stocks are supporting US indices such as Amazon and Apple, which are up 11.21% and 2.97% respectively, buoyed by their positive quarterly results.
At the close in Europe, Wall Street was up slightly, the Dow Jones Industrial Average gained 0.27% to 32,618.11 points and the broader Standard & Poor’s 500 index was up 0.85%.
The Nasdaq Composite took 1.03%.
THE INDICATORS OF THE DAY
US consumer spending rose more than expected in June, 1.1% versus 0.9% expected by economists, the Commerce Department said on Friday. Americans are paying more for goods and services with the highest monthly inflation since 2005.
On the currency side, the dollar lost 0.33% against a basket of benchmark currencies and the euro rose slightly to $1.0207.
Bond yields in the eurozone rose sharply after news of a higher-than-expected rate of inflation hitting a year-on-year record of 8.9% in July, keeping the European Central Bank under pressure for an acceleration in the pace of its monetary tightening in September.
Germany’s 10-year bond ended up around 0.8260%, while in the US market, the 10-year Treasury yield rose almost five basis points to 2.6271%.
Brent gained 2.85% to $110.19 a barrel and US light crude (West Texas Intermediate, WTI) rose 3.94% to $100.22.
(Written by Olivier Cherfan, edited by Jean-Michel Bélot)