By Steve Goldstein
European stocks rose on Thursday, catching up with the rally on Wall Street after a key official laid out the conditions that would keep U.S. monetary policy loose for some time.
Federal Reserve Vice Chair Richard Clarida, who unlike Fed Chair Jerome Powell is a trained economist, said the central bank will keep buying bonds until “substantial further progress” has been made toward its maximum-employment and price-stability goals. Clarida said rates would be keep at its current near-zero levels until the Fed achieves “maximum” employment, until inflation has risen to 2%, and until inflation is on track to moderately exceed 2% for some time.
Clarida’s comment gave further heft to the Congressional testimony Powell has delivered, as the central bank chief said rising bond yields were a reflection of market confidence that the world’s largest economy would recover.
After a 0.5% gain on Wednesday, the Stoxx Europe 600 /zigman2/quotes/210599654/delayed XX:SXXP +0.16% added 0.2%.
The yield on the U.S. 10-year Treasury /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +0.22% rose to 1.43%, with the French 10-year /zigman2/quotes/211347162/realtime BX:TMBMKFR-10Y 0.00% on the cusp of turning positive.
With a widening gap between short- and long-term yields, banks rose throughout Europe on hopes for improving margins, with Deutsche Bank /zigman2/quotes/207242873/delayed XE:DBK +2.22% and Commerzbank /zigman2/quotes/207286669/delayed XE:CBK +3.36% each rising 2%. Standard Chartered /zigman2/quotes/200125072/delayed UK:STAN +1.13% was the exception in the sector, sliding 4% as the Asian-focused, U.K.-based bank reported weaker-than-forecast earnings as credit impairments more than doubled.
Diversified miner Anglo American /zigman2/quotes/201381512/delayed UK:AAL -1.46% rose 5%, after reporting a smaller-than-forecast drop in underlying profit.
Nokia /zigman2/quotes/203672305/delayed FI:NOKIA -0.20% /zigman2/quotes/207421390/composite NOK 0.00% shares rose 6%. The Finnish telecom equipment maker is a popular company on the Reddit WallStreetBets message board, and Reddit favorites the videogames retailer GameStop /zigman2/quotes/203755179/composite GME +3.27% and movie-theater chain AMC Entertainment /zigman2/quotes/200235402/composite AMC -4.01% surged on Wednesday.
Anheuser-Busch InBev /zigman2/quotes/203831500/delayed BE:ABI -0.08% /zigman2/quotes/209225053/composite BUD +0.85% shares fell 4%, as the brewer reported stronger-than-forecast sales and volumes for the fourth quarter but also said current-year margins would face pressure from adverse channel and packaging mix, coupled with transactional foreign exchange and commodity headwinds.