European stock markets defied a delay to the Johnson&Johnson vaccine rollout to close higher on Tuesday, while US indexes were mixed after a strong consumer inflation reading and bitcoin powered to a record peak on the eve of a key IPO.
London finished the day close to flat despite news of Britain’s advancing economic growth and rebounding EU exports in February, but Frankfurt and Paris both pushed upwards in the face of bumps in the road.
Discouraging news like a delay to Johnson & Johnson’s European rollout of its coronavirus vaccine and a weaker German investor sentiment reading were just “brakes” that “don’t have what it takes to derail the sense of a powerful recovery set to arrive once the health issues are really under control,” said IG France analyst Alexandre Baradez.
The delay to J&J’s shot came after the US Food and Drug Administration and Centers for Disease Control recommended a “pause” on the one-jab inoculation, over worries about six reported cases of a rare type of blood clot in the United States.
US authorities said the decision was made “out of an abundance of caution” over a disorder that appears similar to that observed in rare cases of people who received the AstraZeneca vaccine in Europe.
Nevertheless, “this news has created a big PR problem as it is apt to scare some people away from getting the J&J vaccine if (government regulators) come back around and deem it safe for use again,” Patrick J O’Hare of Briefing.com said.
Such fears appeared reflected in morning trading on US markets, with the tech-heavy Nasdaq index climbing but a fall for the broader Dow Jones Industrial Average.
After the Labor Department said US consumer price inflation rose to 2.6% in the 12 months to March, analyst Fawad Razaqzada of Think Markets warned that “the key question is whether growth optimism will be replaced by inflationary concerns and taper tantrums,” referring to market upset if the Federal Reserve sounds an end to easy-money policy.
Although policymakers have repeatedly pledged not to change tack until inflation is elevated for some time and unemployment is under control, “if we do now see more signs of the US economy heating up, then there could be a noticeable change in tone from the Fed,” Razaqzada said.
At the same time, “talks about corporate tax hikes to pay for the cost of stimulus” from Washington mean “things could unravel on Wall Street soon”.
“All it takes is a few people to start selling to get the ball rolling,” Razaqzada added.
Optimism nevertheless appeared intact among cryptocurrency traders as bitcoin zoomed to a record high above $63,000.
As the cryptocurrency exchange Coinbase prepares to launch shares on Wall Street’s Nasdaq index, the virtual unit was trading at $63,305, a huge gain of 117% since the start of the year.
“A good debut for Coinbase in Nasdaq will mark the first official juncture between the traditional financial avenue and the alternative crypto path,” said Swissquote analyst Ipek Ozkardeskaya.
“As such, a successful addition to Nasdaq should act as endorsement of cryptocurrencies by traditional investors.”
European shares hovered just below all-time highs, little changed by US inflation data that suggested the Federal Reserve’s accommodative policy stance would remain intact.
The pan-European STOXX 600 closed up 0.1% and the export-heavy German stock index also rose that much after data showed China’s exports grew at a robust pace in March and import growth surged to its highest in four years.
Luxury and other consumer stocks led gains on the STOXX 600, followed by technology stocks.
The benchmark STOXX 600 has surged to record highs this month after coming under pressure in March from rising bond yields, as central banks globally maintained an accommodative monetary stance despite fears of a jump in inflation.
Data on Tuesday showed inflation in the United States rose more than expected, posting its biggest gain in more than 8-1/2 years in March as increased vaccinations and massive fiscal stimulus unleashed pent-up demand.
“But it hasn’t unnerved markets because we’ve heard a lot of soothing words from the US Federal Reserve that any rise in inflation is temporary,” said Fiona Cincotta, senior financial markets analyst at City Index.
The STOXX 600 has also lagged a recovery in its US counterpart due to a slow vaccination rollout and a new wave of coronavirus infections on the continent.
Johnson & Johnson on Tuesday said it would delay the rollout of its Covid-19 vaccine in Europe and was reviewing cases of extremely rare blood clots in people after they received the shot.
“Any concern of slowing rollout expectations, especially after J&J, could hit sentiment,” Cincotta said. Attention this week will also be on the start of the first-quarter corporate earnings season, with major US banks JPMorgan Chase & Co and Goldman Sachs Group Inc due to report on Wednesday.
European earnings will kick into higher gear later in April and analysts expect a 47.4% jump in earnings for STOXX 600 companies, according to Refinitiv IBES data.
Much of the support is likely to come from consumer cyclicals and industrial firms.
Britain’s biggest sportswear retailer JD Sports rose 3% as it forecast profit growth for this year and announced plans to ramp up warehouse capacity to fulfil online orders and minimise disruptions from Brexit.
Swedish IT solutions provider Dustin surged 17.4% after it said it would buy Centralpoint, a seller of hardware and software in the Benelux region, for 425mn euros ($505.6mn).
In London, the FTSE 100 ended flat at 6,890.49 points; Paris — CAC 40 closed up 0.4% to 6,184.10 points; Frankfurt — DAX 30 ended up 0.1% to 15,234.36 points and EURO STOXX 50 closed up 0.1% to 3,966.99 points yesterday.
LEAVE A COMMENT Your email address will not be published. Required fields are marked*
MSCI includes QIG in its Qatar Small Cap index
Qatar Q1 trade surplus jumps 19% to QR39.94bn: PSA
Online platform gets funding from Omani firm to accelerate GCC expansion plans
AT&T preparing to merge its media assets with Discovery
Qatar aims for 25% electric public transport by 2022: USQBC
Poland plans EU-funded boost to revive pandemic-hit economy
US, EU set to reach temporary tariff truce over metals
Disney falls most in 11 months after streaming growth falters
Wall Street sets sights on earnings reports from major retailers