Site icon SmartQuickBudget.com

European stocks retreat on hawkish Powell speech; Diageo slumps on outlook

© Reuters.

Investing.com – European stock markets traded lower Friday, as investors digested hawkish comments from Fed chief Jerome Powell as well as more corporate earnings.

At 03:40 ET (08:40 GMT), the  index in Germany traded 0.4% lower, the  in France traded 0.6% lower, while the  in the U.K. dropped 0.8%.

Hawkish Powell hits sentiment

Sentiment has been hit after Fed Chair warned on Thursday that rate hikes were still under consideration as the central bank seeks to bring inflation totally under control.

“[The Fed] is committed to achieving a stance of monetary policy that is sufficiently restrictive to bring inflation down to 2% over time,” Powell said.

“We are not confident that we have achieved such a stance. If it becomes appropriate to tighten policy further, we will not hesitate to do so.”

Powell’s comments follow European Central Bank and Bank of England policymakers also pushing back against expectations around rate cuts.

Global equities had soared over the last week, boosted by increasing confidence that a peak in U.S. interest rates was in sight, after the left rates unchanged.

Lagarde due to speak

Attention now turns to ECB President , who is due to speak later in the session. Investors will pore over her every word for clues of future monetary policy.

Lagarde has a tricky path to tread, because the latest eurozone business activity data, released at the start of the week, suggested there is a growing chance of a recession in the region, even while inflation remains above the ECB’s medium-term target.

Data released earlier Friday showed that stagnated in the U.K. in the third quarter, although rose 0.2% on the month in September, slightly better than the flat figure expected. 

Richemont offers dismal outlook

In the corporate sector, Diageo (LON:) stock slumped 10% after the U.K. drinks giant said it expected organic operating profit growth to decline in the first half of its current financial year, citing weakness in Latin America and the Caribbean.

Richemont (SIX:) stock fell over 4% after the luxury group reported weaker than expected earnings as the rising cost of living, economic headwinds and geopolitical tensions were weighing on customers’ spending.

Allianz (ETR:) stock rose 3.2% after the German financial services company maintained its full-year profit outlook despite posting a 30% fall in its third-quarter net profit, dragged down by claims from natural catastrophes.

GN Store Nord (CSE:) stock soared over 10% after the Danish hearing aid manufacturer announced new cost savings targets as it met third-quarter earnings expectations.

Crude heading for sharp weekly drop

Oil prices rose Friday, but were still heading for a third straight week of steep losses on persistent concerns over slowing global demand and resurgent fears of rising U.S. interest rates. 

By 03:40 ET, the futures traded 0.6% higher at $76.20 a barrel, while the contract climbed 0.7% to $80.58 a barrel. 

Both benchmarks are currently down over 5% this week, and on course for the longest weekly losing streak since a four-week drop from mid-April to early May.

Additionally, fell 0.5% to $1,960.25/oz, while traded 0.1% higher at 1.0673.

 

Read the full article here

Exit mobile version