(New York) Western stock markets continued to rise on Friday, still buoyed by hopes of a normalization of inflation, a less bad economic trajectory than announced and the imminent end of the monetary tightening cycle.
Paris gained 0.69% and finished above 7,000 points for the first time since February 11, 2022. London gained 0.64% to 7,844.07 points, even closer to its all-time high at the May 22 close. 2018 (7877.45 points). Frankfurt gained 0.19%, like Milan.
On Wall Street, the Dow Jones rose 0.33%, the NASDAQ index gained 0.71% and the broader S&P 500 index gained 0.40%.
UK GDP growth came in above analysts’ expectations at 0.1% in November. German growth also exceeded expectations in 2022, reaching 1.9% against 1.4% forecast in the fall by the government.
In Europe, “there is a look of optimism over the past few weeks. The mild winter relieves everyone”, with the drop in demand and energy prices, underlines Charlotte de Montpellier, economist at ING. “Everyone, including us, has revised their economic forecasts upwards,” she explains.
In the United States, it was another macroeconomic indicator, consumer confidence, which was well received by the markets, which erased the losses recorded at the start of the session.
The index rose much more than expected, and stands at its highest since April 2022, in particular due to lower inflation expectations.
On Thursday, the markets had been pleased by the fall in inflation in the United States, to 6.5% in December year on year against a rise of 7.1% the previous month, supporting investors’ hopes of a tightening monetary policy in the country less severe in 2023.
On the bond market, sovereign yields rose slightly in Europe after hitting a low for almost a month.
“Going forward, inflation will probably continue to fall, but the question remains where it will stabilize,” said Carlo Putti, investment director at M & G Investments. “Getting out of peak inflation is the easy part, getting back to the 2% target will be much harder,” he says.
This complex economic environment for market operators to manage will be fueled over the coming weeks by company results.
US banks cautious
American banks, which traditionally open the ballet of corporate results, all posted figures above expectations.
JPMorgan Chase, which earned $38 billion in 2022, gained 2.52%, and Bank of America, which made $26 billion in profit for the year, gained 2.20%.
Citi (+1.69%) and Wells Fargo (+3.25%) also advanced.
Tesla is selling off
Shares in electric vehicle maker Tesla lost 0.94% after it announced a price cut for some of its models in the United States and several European countries.
The titles of other manufacturers also fell: Stellantis yielded 3.91%, Volkswagen 2.81%, Ford 6.44% and General Motors 4.97%.
On the side of currencies and commodities
The euro lost 0.19% to 1.0832 dollars per euro around 5 p.m. (Eastern time), after hitting its highest since April on Thursday.
Oil prices recorded their seventh consecutive session of increases on Friday, driven by news of a resurgence in Chinese demand, and are now flirting with important symbolic thresholds.
The price of a barrel of Brent from the North Sea, for delivery in March, rose 1.48%, to close at 85.28 dollars.
The price of a barrel of American West Texas Intermediate (WTI), for delivery in February, took him 1.87%, to 79.86 dollars. The WTI came close to 80 dollars in session, a psychological threshold that it has not crossed for 10 days.