- Eurostoxx +0.5%
- Germany DAX +0.7%
- France CAC 40 -0.2%
- UK FTSE 100 -0.2%
- Spain IBEX +0.5%
- Italy FTSE MIB +0.6%
European equities are finding some relief today, with most major indices posting modest gains as we approach the end of what has been a rather volatile trading week. The French benchmark index is the notable laggard, with fiscal risks continuing to weigh this week.
For now though, I wouldn’t read too much into the early advance just yet. Broader markets have had plenty to digest in trading this week, not least with hotter-than-expected US inflation data from both the CPI and PPI reports. That continues to pose fresh questions on the Fed outlook as well as the bond market selloff, even though there is a much calmer tone in the latter in the past few sessions.
While there Treasury yields and the dollar have eased a fair bit, that doesn’t necessarily mean investors are out of the woods. The bigger concern remains that inflation pressures are proving to be more stubborn than hoped, leaving central banks with less room to support growth if economic conditions start to deteriorate. And that will be especially difficult for European stocks to navigate through, given the region’s own economic and fiscal challenges.
The overall market mood today is at least helped by a steadier showing in US futures. The late recovery in tech shares overnight is carrying over a little, with S&P 500 futures up 0.1% and Nasdaq futures keeping little changed.
Still, I would be cautious about labelling this as a proper turnaround. European stocks are just about managing to find their feet again but whether they can stay on them is another matter entirely.
This article was written by Justin Low at investinglive.com.