European Markets Muted After U.S. Inflation

European Markets Muted After U.S. Inflation

Global markets reacted to the latest U.S. inflation reading, which showed that consumer prices rose again in December. Hence, European stocks fell slightly on Thursday. The pan-European Stoxx 600 fell 0.1 percent below the flatline in early trade. Moreover, health care stocks fell 0.5 percent, and technology stocks increased 1 percent.

In terms of individual share price movement, Sopra Steria, a French software developer, rose more than 5% after raising its 2021 guidance and appointing a new CEO.

At the bottom of the European blue-chip index, Countryside Properties has dropped more than 16 percent after announcing that its CEO will step down with immediate effect and revealing that first-quarter trading in the new fiscal year has been below the board’s expectations. According to the Bureau of Labor Statistics, global markets are digesting the latest red-hot inflation reading from the United States, which showed that the consumer price index, a gauge of prices across a wide range of goods, increased 7% in December.

CPI increased by 0.5 percent every month. According to Dow Jones, economists expected the consumer price index to rise 0.4 percent in December and 7 percent yearly.

Some economists believe inflation is nearing a peak so the report will scrutinize a longer-term trend.

Big banks in the United States are also in the spotlight, with a report kicking off the fourth-quarter earnings season on Friday.

Geberit reported earnings while Tesco, Marks & Spencer, and ASOS issued trading statements.

Stock Futures Flat

Early Thursday, U.S. stock futures were little changed after the Nasdaq Composite rose despite a hot consumer price index report for the third session.

The Dow futures were only up 16 points. The S&P 500 futures were up 4 points, while the Nasdaq 100 futures were 28 points.

After-hours trading saw shares of homebuilder KB Home rise more than 6% after the company reported better-than-expected earnings.

Despite the consumer price index showing the highest year-over-year increase since June 1982, the major averages rose on Wednesday, mainly with Wall Street expectations. The Dow Jones Industrial Average gained approximately 38 points, while the S&P 500 gained 0.3 percent. The Nasdaq Composite rose 0.2 percent for the third day in a row.

Also, at 8:30 a.m., initial jobless claims for the week ending Jan. 8 will release on the data front. Dow Jones polled economists predicted 200,000 people would file for unemployment benefits, down from 207,000 the previous week.

The fourth-quarter earnings season begins this week, with several significant banks reporting before the market opens on Friday.