Traders work on the floor of the New York Stock Exchange. Photograph: Michael Nagle/BloombergEuropean stocks climbed on Thursday for the first day in three, led by cyclical stocks including consumer and auto companies. The Stoxx Europe 600 Index rose 0.6 per cent, reversing some of the previous session’s losses. Trading volumes were thin, with the UK market closed for Queen Elizabeth’s platinum jubilee.
The Stoxx 600 fell in May, declining for the fourth month in the past five. This month may also be tricky: June has on average been the worst month of the year for European stocks over the past two decades. “We maintain a cautious view on equities as the main issues of inflation and central banks remain the key uncertainties, said Thomas Nugent, equities portfolio manager at Mapfre AM.was one of the main movers in Dublin, climbing 1.5 per cent to €14.
Markets lacked clear direction ahead of Friday’s payroll report, with private hiring data on Thursday showing the smallest gain since the pandemic recovery began. Factory orders came in lower than forecast, adding to worries the economy is slowing while inflation remains stubbornly high. Fed vice-chairman Lael Brainard also said it was unlikely the central bank would stop raising rates after the next two meetings, where hikes of 50 basis points each are expected.
“Fed-friendly ADP and factory orders reports combined with a rational reaction to the Microsoft FX guide has investors feeling more constructive,” Art Hogan, chief market strategist at National Securities, said. “Add to all of that, Opec+ is increasing quotas, which will certainly help all of our number one concern, inflation.
Opec+ agreed to increase the size of its oil-supply hikes by about 50 per cent in July and August, bending to pressure by major consumers including the US to fill the gap created by sanctions on Russian supplies. Lower oil prices could ease inflationary pressures. Yet investors remain on edge as some fear the pace of monetary tightening could throw the economy into a recession.