European stocks: positive start in a week full of macro references
The European stock markets open the session on Monday to the upside, but without a defined trend, in a transitional day, given the lack of macro and business references of depth.
However, this morning a battery of macro figures for the month of April was published in China, which as a whole have been somewhat below expectations, showing a certain slowdown in the pace of recovery in year-on-year terms.
Specifically, China’s manufacturing output growth slowed in April from the jump seen the previous month, while retail sales fell short of analysts’ expectations, signaling increased pressure on the recovery in consumption.
Industrial production grew 9.8% in April from a year earlier, down from 14.1% in March, data from the National Bureau of Statistics (NBS) showed on Monday, but coinciding with a consensus forecast of analysts polled by Reuters.
For their part, retail sales increased 17.7% year-on-year in April, well below the 24.9% rebound expected by analysts and the 34.2% jump in March.
The reaction of the Asian stock markets to the aforementioned figures has been mixed, although the main concern now in these markets is the spikes in Covid-19 cases in many countries in the region, which is leading the authorities to reestablish restrictive measures that can damage the growth of these economies, something that we understand transcends the local sphere, so it will also be necessary to be very aware of the evolution of the pandemic in the area.
After the publication of the Chinese macro, the Dax rises 0.11%; the FTSE 100, 0.23%, the Cac 40, 0.21% and the FTSE Mib, 0.45%. The Euro Stoxx 50 appreciates 0.16%.
Link Securities analysts expect that “in the coming days the stock markets will stabilize and that the expectations of an early reopening of the economies will determine investment decisions in these markets”.
The same experts also expect that “the macro figures that will be published both in Europe and in the US, largely due to the effect of the comparison base, will continue to show strong growth, growth that will increase as the process of vaccination in the main developed economies and that different governments gradually remove restrictions on citizen mobility and economic activity. This should restore confidence to some investors who have been showing fear that the strong rise in the prices of many services and products will force central banks to anticipate the withdrawal of their monetary stimuli, something that they have been reiterating that they will not do. , at least until well into 2022 ”.
The euro yields against the dollar and is exchanged for 1,213 greenbacks.
The benchmark Brent oil in Europe fell 0.28% to $ 68.52 per barrel, while the US West Texas lost 0.14% to $ 65.27.
European stocks start the session positive, despite the fact that futures point to slight declines on the other side of the Atlantic, after Wall Street closed on Friday with gains on the second day of increases after the declines at the beginning of the week due to fear to the rebound in inflation.
The Dow Jones gained 1.06%, the S&P 500 gained 1.49%; while the Nasdaq, in which the main technology companies are listed, rose 2.32%.
The New York stock market closed on Friday a very volatile week characterized by large losses between Monday and Wednesday, due to the inflation data, and a rebound in the final stretch.
For the head of market strategy at Canaccord Genuity, Tony Dwyer, the fall registered this week is a good sign. “There needs to be a correction in the summer that is significant enough to eliminate the condition of extreme overstocking in the medium term and excess optimism,” he was quoted as saying by CNBC.
In the coming days, some important leading regional activity indices will be published in the US, corresponding to the month of May, starting today with New York and continuing on Thursday with Philadelphia.
In addition, the eurozone, its two main economies, Germany and France, the United Kingdom and the United States, will be released on Friday the preliminary readings for May of the leading indices of activity in the manufacturing and services sectors, known as PMIs.
On Wednesday the minutes of the last meeting of the Federal Open Market Committee of the US central bank, the FOMC, will be published in the US. The focus is on any comment from its members in relation to inflation and how it will or will not condition their positions in relation to the monetary policy of the institution.
On the other hand, the presentation season for quarterly business results. In Europe they publish companies such as Engie, Generali, Kingfisher, Ryanair, Telecom Italia and Vodafone. On Wall Street it is the turn of the large retail distribution companies, such as Walmart, Macy’s, Home Depot, Lowe’s, Target, L Brands or Ralph Lauren.