Bulletin
Investor Alert

London Markets Close in:

Europe Markets Archives | Email alerts

June 11, 2021, 8:31 a.m. EDT

European stocks add to gains as investors aren’t scared of U.S. inflation spike

new
Watchlist Relevance
LEARN MORE

Want to see how this story relates to your watchlist?

Just add items to create a watchlist now:

  • X
    STOXX Europe 600 Index (SXXP)
  • X
    DAX (DAX)
  • X
    CAC 40 Index (PX1)

or Cancel Already have a watchlist? Log In

By Barbara Kollmeyer

European stocks climbed on Friday, as investors decided stronger-than-expected U.S. inflation wasn’t much to worry about, while falling bond yields increased appetite for equities.

Investors will also be keeping an eye on the G-7 (Group of Seven) meeting of leaders in Cornwall, England on Friday.

Shaking off a sluggish start, the Stoxx Europe 600 index /zigman2/quotes/210599654/delayed XX:SXXP +1.06% , up nearly 1% for the week so far, climbed 0.5%, while the German DAX /zigman2/quotes/210597999/delayed DX:DAX +0.96% rose 0.5%, with the French CAC 40 /zigman2/quotes/210597958/delayed FR:PX1 +1.10% and the FTSE 100 /zigman2/quotes/210598409/delayed UK:UKX +0.07% up 0.6% and 0.5%, respectively.

U.S. stock futures /zigman2/quotes/209948968/delayed ES00 +1.32% /zigman2/quotes/210407078/delayed YM00 +1.46% /zigman2/quotes/210219788/delayed NQ00 +1.03% turned higher , following a positive day on Wall Street, with the S&P 500 /zigman2/quotes/210599714/realtime SPX +1.23% logging a record finish, as investors brushed aside data showing annual U.S. consumer prices climbed 5% in May to a 13-year high.

Yields continued to fall on both sides of the Atlantic, with that of the German 10-year bund /zigman2/quotes/211347112/realtime BX:TMBMKDE-10Y +19.82% down 1 basis point to -0.272%, and the 10-year U.S. Treasury bond yield /zigman2/quotes/211347051/realtime BX:TMUBMUSD10Y +6.17% down 2 basis points to 1.441%.

Read: Inflation is surging. How high will it go? Check out MarketWatch’s new tracker.

Markets have been concerned that signs of rising inflation globally will push central banks to tighten ultra-easy monetary policies and stimulus enacted to fight the COVID-19 pandemic fallout. But the Federal Reserve has been fairly consistent in its reassurances that the data are transitory.

“It appears as though the market is so confident that the Fed will maintain its current policy stance that even a 5% CPI [consumer-price index] inflation in the U.S. didn’t scare the markets,” said Fawad Razaqzada, market analyst at ThinkMarkets.

“With stocks rising, and both the dollar and yields falling, investors clearly believe that the Fed will still stick to script next week and re-iterate its view that the upsurge in prices is going to be temporary,” he said in a note to clients. The drop in bond yields has sparked appetite for all risk assets, notably low and zero-yielding assets such as technology growth stocks and precious metals, he added.

Razaqzada said markets were also relieved to see a dovish European Central Bank, which on Thursday left interest rates unchanged and made no tweaks to the size of its asset-buying programs at its policy meeting. 

Read: No ECB ‘taper tantrum,’ but stage set for market showdown later this year

On the data front, the U.K. economy expanded 2.3% in April, its fastest monthly pace since July 2020, the Office for National Statistics said.

Banks were a weak spot for Europe, falling in step with bond yields. Shares of Deutsche Bank /zigman2/quotes/203042512/composite DB +1.88% slid 3%, those of Société Générale /zigman2/quotes/206663756/delayed FR:GLE +2.58% lost 1.6%, and Crédit Agricole /zigman2/quotes/209264506/delayed FR:ACA +2.46% dropped 1%.

But resource stocks were rising, with metals pricing climbing. Shares of miners Rio Tinto /zigman2/quotes/208934945/delayed UK:RIO +0.33% /zigman2/quotes/202627887/composite RIO +1.44% and Glencore /zigman2/quotes/201400686/delayed UK:GLEN +1.82% were up 1% and 2%, respectively.

Pharmaceutical stocks rose, with shares of AstraZeneca /zigman2/quotes/203048482/delayed UK:AZN +0.87% /zigman2/quotes/200304487/composite AZN +1.49% up 1.3% and Bayer HU:BAYER +2.66% rising 1%.

Another gainer was LVMH Moët Hennessey Louis Vuitton /zigman2/quotes/201350549/delayed FR:MC +1.77% , with those shares up 1.8%. Loïc Morvan, an analyst at Bryan Garnier, reiterated a buy rating on the luxury-goods group in a note to clients, saying he expects second-quarter sales to grow near 10% versus the second quarter of 2019.

“We remain quite optimistic on LVMH. We see no signs of a business slowdown in the U.S. (23% of sales) or APAC (41% of sales). Demand for luxury products from the Chinese and American clienteles is still robust,” said Morvan. First-half results for LVMH are expected in July.

/zigman2/quotes/210599654/delayed
XX : STOXX
468.09
+4.89 +1.06%
Volume: 0.00
Sept. 23, 2021 4:55p
loading...
/zigman2/quotes/210597999/delayed
DAX
DX : Xetra Indices
15,655.70
+148.96 +0.96%
Volume: 35,588
Sept. 23, 2021 4:55p
loading...
/zigman2/quotes/210597958/delayed
FR : France: Euronext Paris
6,710.20
+73.20 +1.10%
Volume: 51,963
Sept. 23, 2021 4:55p
loading...
/zigman2/quotes/210598409/delayed
UK : FTSE UK
7,088.47
+5.10 +0.07%
Volume: 384,512
Sept. 23, 2021 3:55p
loading...
/zigman2/quotes/209948968/delayed
US : U.S.: CME
$ 4,441.75
+57.75 +1.32%
Volume: 719,650
Sept. 23, 2021 10:00a
loading...
/zigman2/quotes/210407078/delayed
US : U.S.: CBOT
$ 34,628.00
+499.00 +1.46%
Volume: 115,011
Sept. 23, 2021 10:00a
loading...
/zigman2/quotes/210219788/delayed
US : U.S.: CME
$ 15,320.00
+156.50 +1.03%
Volume: 286,581
Sept. 23, 2021 10:00a
loading...
/zigman2/quotes/210599714/realtime
US : S&P US
4,449.67
+54.03 +1.23%
Volume: 619.00M
Sept. 23, 2021 11:10a
loading...
/zigman2/quotes/211347112/realtime
add Add to watchlist BX:TMBMKDE-10Y
BX : Tullett Prebon
-0.26
+0.06 +19.82%
Volume: 0.00
Sept. 23, 2021 5:10p
loading...
/zigman2/quotes/211347051/realtime
add Add to watchlist BX:TMUBMUSD10Y
BX : Tullett Prebon
1.39
+0.08 +6.17%
Volume: 0.00
Sept. 23, 2021 11:10a
loading...
/zigman2/quotes/203042512/composite
US : U.S.: NYSE
$ 12.49
+0.23 +1.88%
Volume: 1.08M
Sept. 23, 2021 11:08a
P/E Ratio
10.05
Dividend Yield
0.00%
Market Cap
$25.40 billion
Rev. per Employee
$449,141
loading...
/zigman2/quotes/206663756/delayed
FR : France: Euronext Paris
26.05
+0.66 +2.58%
Volume: 1.76M
Sept. 23, 2021 4:55p
P/E Ratio
7.19
Dividend Yield
2.11%
Market Cap
€19.79 billion
Rev. per Employee
€237,304
loading...
/zigman2/quotes/209264506/delayed
FR : France: Euronext Paris
11.85
+0.28 +2.46%
Volume: 3.00M
Sept. 23, 2021 4:55p
P/E Ratio
9.07
Dividend Yield
6.75%
Market Cap
€33.84 billion
Rev. per Employee
€561,439
loading...
/zigman2/quotes/208934945/delayed
UK : U.K.: London
4,857.00 p
+16.00 +0.33%
Volume: 2.38M
Sept. 23, 2021 3:55p
P/E Ratio
5.73
Dividend Yield
12.89%
Market Cap
£79.76 billion
Rev. per Employee
£732,787
loading...
/zigman2/quotes/202627887/composite
US : U.S.: NYSE
$ 67.55
+0.96 +1.44%
Volume: 1.56M
Sept. 23, 2021 11:10a
P/E Ratio
5.90
Dividend Yield
10.13%
Market Cap
$108.83 billion
Rev. per Employee
$939,693
loading...
/zigman2/quotes/201400686/delayed
UK : U.K.: London
330.10 p
+5.90 +1.82%
Volume: 18.74M
Sept. 23, 2021 3:55p
P/E Ratio
30.20
Dividend Yield
2.66%
Market Cap
£42.76 billion
Rev. per Employee
£765,499
loading...
/zigman2/quotes/203048482/delayed
UK : U.K.: London
8,692.00 p
+75.00 +0.87%
Volume: 637,661
Sept. 23, 2021 3:55p
P/E Ratio
40.95
Dividend Yield
2.33%
Market Cap
£133.49 billion
Rev. per Employee
£282,763
loading...
/zigman2/quotes/200304487/composite
US : U.S.: Nasdaq
$ 59.62
+0.88 +1.49%
Volume: 1.76M
Sept. 23, 2021 11:10a
P/E Ratio
41.68
Dividend Yield
2.29%
Market Cap
$182.15 billion
Rev. per Employee
$362,602
loading...
HU : Hungary: Budapest
Ft 16,590.00
+430.00 +2.66%
Volume: 2.00
Sept. 22, 2021 12:00a
P/E Ratio
N/A
Dividend Yield
N/A
Market Cap
Ft16249.27 billion
Rev. per Employee
Ft146.02M
loading...
/zigman2/quotes/201350549/delayed
FR : France: Euronext Paris
654.70
+11.40 +1.77%
Volume: 246,410
Sept. 23, 2021 4:55p
P/E Ratio
34.85
Dividend Yield
0.92%
Market Cap
€324.09 billion
Rev. per Employee
N/A
loading...

This Story has 0 Comments
Be the first to comment
More News In
Markets

Story Conversation

Commenting FAQs »

Partner Center

World News from MarketWatch

Link to MarketWatch's Slice.