A look at the day ahead at Ankur Banerjee’s European and global markets
European stock markets are set to keep the rally going ahead of the all-important US CPI data, after comments from Fed Chairman Jerome Powell reassured investors that the US central bank’s next move is unlikely to be a rate hike.
Powell called Tuesday’s higher-than-expected producer price report “mixed” rather than “hot” because earlier data had been revised downward.
While Powell’s comments largely echoed comments from his press conference after the Fed’s last meeting, it was enough to send stocks higher, with Asian stocks at their highest level in 15 months and the Nasdaq closing at a record high.
The pan-European STOXX 600 also closed at a record high on Tuesday and futures indicated the index was primed for a higher open.
Traders are now pinning their hopes on the Fed starting its easing cycle in September, although this will depend on the inflation report, which is expected to show the CPI rising 0.3% month-on-month in April, compared to 0.4% growth the month before. , according to a Reuters poll.
Meanwhile, earnings season continues, with luxury company Burberry and Dutch bank ABN Amro leading today’s line-up.
Meme stocks are surging like it’s 2021, with retail investors GameStop and AMC soaring this week, tripling GameStop’s market cap to about $18 billion.
Robinhood recorded $5 billion in stock trading on Tuesday, CEO Vlad Tenev tweeted, underscoring demand and perhaps the return of the meme stock mania.
All it took was some social media posts, which didn’t mention company names, from “Roaring Kitty” Keith Gill to spark the so-called Reddit rally in January 2021 with bullish calls on GameStop.
Key developments that could impact the markets on Wednesday:
Economic events: CPI data France, April; Eurozone flash GDP for the first quarter
Wins: ABN Amro Bank, Allianz, Burberry and Merck KGaA
(Editing by Muralikumar Anantharaman)
