European equities: a week in review
It was a busy 1st half the week on the economic data front.
The German economy was the center of attention.
German factory orders (-0.20%) and industrial production (-1.00%) fell unexpectedly in April, after strong gains in March.
A modest increase in Germany’s trade surplus was also disappointing, below expectations.
The economic sentiment figures for Germany and the eurozone were also negative. Sentiment towards the German and eurozone economies weakened slightly in June.
The numbers weren’t enough to scare the markets ahead of the ECB’s policy decision and Thursday’s press conference.
Support at the start of the week has been finalized 1st quarterly GDP figures for the euro area.
Quarter over quarter, the eurozone economy contracted by a modest 0.3%, revised up from a preliminary contraction of 0.6%.
In the 2sd halfway through the week the focus was on the ECB and the all-important press conference.
Upward revisions to growth and inflation for this year have raised the prospect of a possible slowdown in the shorter term. The lack of chatter during unraveling, however, limited the damage. The ECB’s inflation forecast also pointed to easing inflationary pressures in 2022 and 2023, which is also positive for the majors.
The United States
JOLT’s job postings and business data were the center of attention at the start of the week.
The statistics were biased towards the positive. In April, openings fell from $ 8.288 million to $ 9.286 million, with April’s trade deficit rising from $ 75.0 billion to $ 68.9 billion.
While the statistics were positive for the market, the impact on the larger markets was limited.
The focus was on weekly jobless claims and inflation figures expected on Thursday.
Also on the positive side, the annual rate of core inflation accelerated from 3.0% to 3.8%.
Underlying consumer prices and consumer prices continued to rise in May and more than expected.
The initial jobless claims were also positive but perhaps not impressive enough to force the Fed to act. In the week ending 4e In June, initial jobless claims rose from revised 405k to 376k. Economists had forecast a decline to 370k.
At the weekend, preliminary consumer sentiment figures concluded, sentiment improving in June.
From DAX, it was a mixed week for the automotive sector. Volkswagen slipped 2.59% to reverse the trend. Bmw and Daimler ended the week up 0.31% and 0.25% respectively. Continental however led the way, with an increase of 1.65%.
It has been a bearish week for the banking sector. German Bank and Commercial bank fell by 5.88% and 3.98% respectively.
From CAC, it was a mixed week for the banks. Agricultural credit increased by 0.49%, while BNP Paribas and Gen Soc experienced losses of 1.66% and 0.72% respectively.
It was also a mixed week for the French automotive sector. Stellantis SA fell 0.23%, while Renault increased by 7.46%.
Air France-KLM and Airbus ended the week up 1.29% and 2.15% respectively.
On the VIX index
It was a 3rd consecutive week in the red for the VIX in the week ending 11e June. After falling 2.03% from the previous week, the VIX fell 4.69% to end the week at 15.65.
2 days in the red after 5 sessions, including a 10.01% drop on Thursday, delivered the week’s drop.
Over the week, the Dow Jones fell 0.80%, while the NASDAQ and the S & P500 ended the week up 1.85% and 0.41% respectively.