European Markets Adjust Ahead Of Key US Inflation Data

The stock market is holding its breath, on the lookout for economic signals from China and the United States. The global context, marked by economic adjustments and fluctuations of the dollar, intrigues European markets. In addition, there are notable movements on the Stoxx 600 with Just Eat and Siemens in the spotlight. Yet, attention remains focused on American inflation data, crucial for the Federal Reserve’s decisions on interest rates.

The European Stock Market Awaiting American Data

This Wednesday, European stock exchanges are evolving without much variation, all eyes turned towards the figures on inflation in the United States. The Stoxx 600, Europe’s benchmark index, is showing stagnation, largely due to global uncertainty and mixed results from firms on the continent.

Investors are cautious, waiting to see whether the Federal Reserve will proceed with another interest rate change or not.

However, specific events have shaken certain stocks. Just Eat Takeaway, for example, spiked by 20% following the announcement of the sale of its U.S. unit Grubhub for $650 million. Siemens Energy, for its part, rose by 19.1% after raising its medium-term financial targets, a welcome sign of confidence in the energy sector.

Despite this relative stability, a few key trends are emerging:

• Increase in energy values: Siemens Energy is a striking example, with an increase due to optimistic financial forecasts;
• Food sector: Just Eat Takeaway is strengthened by the sale of Grubhub;
• Banking sector: ABN Amro disappoints with a 9% drop in its quarterly profits.

This contrasting picture only ramps up the anticipation surrounding American inflation, a central element that could dictate the course of global stock market events.

The Influence of American Inflation

The question of American inflation is currently the subject of much speculation, as it could affect the Fed’s monetary policy. The Consumer Price Index for October is expected with a potential increase of 0.2%, which would bring annual inflation to about 2.6%.

Investors are closely monitoring this publication, as it influences rate expectations: stable inflation could prompt the Fed to maintain low rates, favorable for stock market investments.

Current trends in the American market add pressure. Technology stocks, for example, which have experienced a rally in recent months, are affected by the prospect of higher interest rates weighing on valuations. Furthermore, the dollar has reached highs against the euro, impacting international exchanges.

Even if some sectors, like precious metals, continue to benefit from inflation fears, the rise in bond yields is starting to cool investors’ enthusiasm for high-growth stocks.

Meanwhile, Asian stock markets are following the American trend with widespread declines: the Japanese Nikkei, the South Korean Kospi, and Hong Kong’s Hang Seng all retreat by about 1%. This reflects a certain global unease, amplified by uncertainty regarding U.S. economic policies.

In summary, while crypto enthusiasts are rejoicing at the current context, it is thanks to the recent 25 basis point rate cut by the Fed that perhaps signals the return of a crypto bull run.