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24/05/24
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Stocks In Europe Close Week Down on Rate Worries Resurfacing
On Friday stocks in Europe closed lower and down for the week, as indications of a recovering euro zone economy and persistent U.S. price pressures cast doubt over the chances for several interest rate cuts from several central banks this year.
The STOXX 600 pan-European index fell 0.1%, resulting in a weekly decline of close to 0.4%, the largest in 3 weeks.
Investors were more cautious after policymakers in Europe warned about monetary easing after June, as they want to avoid price pressures flaring up, especially if the Fed keeps on delaying its reduction cycle.
Traders are at the moment pricing in 0.55% of cuts from the ECB, down from 0.67% a week ago.
Eurozone bond yields saw their biggest weekly increase in a month, after a survey indicated business activity in the eurozone in May expanded at the fastest pace in a year, while other data confirmed that the Germany economy expanded in Q1 of 2024.
Defensive stocks, which are less sensitive to economic cycles, like food and beverage, healthcare and utilities stocks were some of the hardest hit, while cyclicals, like the auto sector and insurance were among top performers.
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