Key Points:
- European stock markets traded mixed, with Germany’s DAX up 0.3%, France’s CAC 40 up 0.1%, and the U.K.’s FTSE 100 down 0.2%.
- Micron’s disappointing outlook dampened investor sentiment. Key U.S. inflation data and eurozone economic sentiment surveys are awaited.
- H&M shares fell 14% due to a smaller-than-expected profit rise. Nokia shares rose 0.2% after the company agreed to sell its submarine networks business.
- Crude prices fell due to a surprise build in U.S. stockpiles. U.S. gasoline inventories rose, raising concerns about weak fuel demand.
European stock markets traded mutedly on Thursday, influenced by a disappointing outlook from chipmaker Micron (NASDAQ:MU) and anticipation of key U.S. inflation data. At 04:30 ET, the DAX index in Germany rose 0.3%, the CAC 40 in France inched up 0.1%, while the FTSE 100 in the U.K. dropped 0.2%.
Micron’s lackluster outlook has dampened investor sentiment. As a significant player in the chip industry, Micron’s performance is often viewed as a bellwether due to its exposure to various chip types and a broad customer base. The negative reaction to its outlook has contributed to the subdued performance in European markets.
European equity indices are struggling for direction as investors eagerly await the release of crucial U.S. inflation data. This data will provide insight into when the Federal Reserve might start its rate-cutting cycle. The U.S. central bank kept rates unchanged at its June meeting but revised its forecast for interest rate cuts to a single 25 basis point reduction by year-end, down from three predicted in March. Fed officials have emphasized the need for more evidence that inflation is under control before they consider easing monetary policy.
Thursday’s European economic data slate includes eurozone confidence surveys, services, and economic sentiment indices. Investors will also review the final U.S. GDP release. However, these releases will likely be overshadowed by the Personal Consumption Expenditures (PCE) reading, the Federal Reserve’s preferred inflation measure, due on Friday.
In the corporate sector, H&M (ST:HMb) stock slumped 14% after reporting a smaller-than-expected rise in March-May operating profit and projecting a decline in June sales. Conversely, Nokia’s (HE:NOKIA) stock rose 0.2% after announcing a deal to sell its submarine network business, ASN, to the French state for €350 million, with no expected impact on its financial outlook. Compagnie de Saint Gobain (EPA:SGOB) stock fell 0.3% after announcing plans to acquire Dubai-based construction chemicals company FOSROC for around $1 billion to expand its international presence.
Crude oil prices dipped on Thursday, influenced by a surprising build in U.S. stockpiles, raising concerns about sluggish demand from the world’s top oil consumer. By 04:30 ET, U.S. crude futures (WTI) traded 0.1% lower at $80.82 per barrel, while the Brent contract dropped 0.1% to $84.40 per barrel.
The U.S. Energy Information Administration reported a 3.6 million barrel increase in the country’s crude oil stocks last week, contrary to market expectations of a 2.6 million barrel draw. Additionally, a 2.7 million barrel build in gasoline inventories indicated weak fuel consumption despite the onset of the travel-heavy summer season. This inventory build has heightened concerns about slowing U.S. fuel demand amidst persistent inflation and high interest rates.
