European Stocks Flat as Investors Await Economic Data for Global Interest Rate Outlook
European stocks remained flat on Thursday, with gains in utilities offset by losses in miners. Investors are eagerly awaiting more economic data from the euro zone and the United States to assess the global interest rate outlook.
The pan-European index was stagnant, as miners saw a decline due to falling metal prices amid weak economic data globally, especially in China. Rate-sensitive sectors like utilities and real estate saw a nearly 1% increase after weak U.S. data on Wednesday suggested a potential policy easing by the Federal Reserve.
German industrial orders rose in July, beating analyst expectations, which helped push Germany's benchmark index up by 0.3%. Investors are now focusing on euro zone's retail sales figures and U.S. labor market data to adjust their interest rate expectations.
The highlight of the week will be the nonfarm payrolls data on Friday, which could provide a clear direction for the markets. Currently, there is a 60% probability of a 25-basis-point rate cut by the U.S. central bank in September, with a total easing of 109 bps expected by the end of 2024.
Individual stocks saw mixed movements, with Associated British Foods slipping due to lower sales forecast and Vistry surging after announcing a share buyback. Lanxess also rose after an upgrade by Morgan Stanley, while chip stocks like ASML Holdings declined.
In conclusion, the global economic data and central bank policies are crucial for investors to monitor as they can impact market movements and interest rate expectations. It is important to stay informed and adjust investment strategies accordingly to navigate through the uncertain market conditions.