All three indices are still struggling to find momentum after Tuesday’s US inflation reading triggered the biggest sell-off in more than two years.
Data released on Thursday showed US retail sales unexpectedly rose 0.3% in August.in a sign that the economy could tolerate higher rates as the Fed tightens its monetary policy.
A separate report from the Labor Department showed initial claims for state jobless benefits fell by 5,000, to a seasonally adjusted figure of 213,000, in the week ended September 10, indicating the resilience of the labor market.
“Economic conditions are quite good in the US and it is quite compatible with the path of the 75 basis point hike for the next meeting,” said Mabrouk Chetouane of Natixis Investment Managers Solutions.
Rate-sensitive growth and technology stocks fell at the start of the session. Apple Inc, Microsoft and Alphabet Inc yielded about 1%, although Netflix Inc. climbed 5.1%.
the european bags
European stocks reversed earlier gains and closed Thursday lowerpressured by the energy and technology titles, as concerns about monetary tightening and geopolitical turmoil dampened risk appetite.
The STOXX 600 index closed down 0.7%, extending their losses to a third consecutive session. The collapse of crude oil prices due to concerns about demand caused shares in the energy sector lost 2.1%. Tech stocks fell 1.8% and were the biggest drag on the STOXX 600. The sector tends to underperform in a high interest rate environment, due to concerns about pressure on future earnings.
“The market is still extremely volatile. There is a fight between the bulls and the bears and each data that comes out gives more arguments to one or the other,” said Andrea Cicione, head of strategy at TS Lombard.
Against the backdrop of Western sanctions on Russia over its invasion of Ukraine, China said on Thursday it would work with Moscow to “infuse stability and positive energy in a chaotic world.”
Concern about a gas crisis in Europe due to the war has made the bloc’s leaders rush to introduce support measures for businesses and citizens.
European banks rose 1.7%supported by bets on interest rate hikes. Morgan Stanley raised the banking sector to “overweight”, citing cheap valuations and earnings strength.
Source: Ambito
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