European stocks uncertain after hotter-than-expected U.S. inflation data; Burberry down 6%
The pan-European Stoxx 600 hovered marginally above the flatline by late morning, with travel and leisure stocks dropping 1.4% while basic resources added 1.4%.
Global markets began the day digesting the latest U.S. inflation data released on Wednesday which showed that October’s consumer price reading jumped at the hottest annual pace in more than three decades.
The consumer price index jumped 6.2% from a year ago, well above the 5.9% estimate from economists polled by Dow Jones. On a monthly basis, the CPI increased 0.9% against the 0.6% estimate.
Major indexes on Wall Street fell following the inflation data release while U.S. Treasury yields climbed. The yield on the benchmark 10-year Treasury note last stood at 1.5699%. Yields move inversely to prices.
Following the CPI data, traders moved up their expectations for when the first Fed rate hike would occur. The Fed funds futures market now sees greater odds of the central bank’s first full rate hike coming in July 2022.
Asia-Pacific stocks were mixed in Thursday trade after the U.S. data, while U.S. stock futures were steady in the early hours of premarket trading.
Earnings in Europe on Thursday came from Bilfinger, Delivery Hero, Merck, RWE, Siemens, Aviva, Tate & Lyle and Burberry, among others.
Siemens beat sales and profit expectations for the quarter and projected further profitable growth as it expects supply chain bottlenecks to ease in 2022.
Auto Trader was the biggest climber on the Stoxx 600 by late morning deals, surging more than 11% after the British car advertiser delivered strong forward guidance.
At the bottom of the European blue chip index, British chemicals maker Johnson Matthey plunged more than 16% after announcing plans to exit its battery materials business along with the departure of its CEO, while warning on annual results.
Burberry shares fell 6.8% as investors balked at the British luxury brand’s third-quarter earnings report.
On the data front, U.K. GDP grew by 0.6% in September, the Office for National Statistics said Thursday, while figures for the previous months were revised downward, leaving the economy still 0.6% smaller than it was in February 2020 before the country’s first Covid-19 lockdown.
