January 29, 2023

Retail Earnings Take Priority as Inflation Moods Keep Rising: European Indices Show Positive Gains Ahead of CPI Data

European stocks are doing better on Thursday, trading higher as investors look forward to the release of consumer price index (CPI) data by the Bureau of Labor Statistics (BLS). As they wait, investors focus more on retail earnings as inflation moods keep rising.

This investor patience is because the CPI data will indicate the level of inflation and the changes in the cost of living, which can also affect the performance of the retail sector and other industries. A higher inflation rate can lead to higher prices for goods and services and decreased consumer spending.

Major European indices saw gains early Thursday, with the German DAX seeing a 0.3% increase while London’s FTSE 100 saw a 0.4% rise. The day’s biggest gainer was the France index, The CAC 40, which started the day off with a 0.5% increase from Wednesday’s closing.

European Assets

European assets also had a good opening to Thursday, with Marks and Spencer (LON: MKS) and Tesco (LON: TSCO) showing positive and steady growth. According to invest.com, this positive posting is due to positive Christmas sales for the two companies.

In addition, the two food companies announced that sales for December were up 9%, which has helped their case with inflation. Next (LON: NXT) and JD Sports Fashion (LON: JD) all had a positive Thursday morning, and the overall waft of a bullish 2023 is exciting investors.

On the flip side, J Sainsbury (LON: SBRY) posted significant declines in non-food stuff sales, while ASOS (LON: ASOS) posted a drop in revenue by 3% over the festive period. ASOS’s poor performance, according to many experts, is because of the disruption in delivery chains in Britain.

However, the company said its stock rose nearly 9% in the festive season despite these facts. Investors are eagerly looking forward to the FED decision in April on rate hikes hoping for a positive outcome.

However, analysts say that the decision will be completely data-driven, and there are no assurances. As a result, the CPI data will be a key indicator of what to expect, and investors are open about waiting for a positive outcome.

Oil Prices

The oil price decreased on Thursday, despite a large increase in the amount of crude oil held in storage in the United States. The US oil reserves rose by over 15 million barrels in the first week of January, the biggest leap since February 2021.

This decrease in oil prices is likely due to rising optimism about China’s future demand for oil. That optimism may be due to positive economic indicators or announcements from China, such as an increase in their oil imports or an expectation for higher industrial activity, which can boost the oil demand.

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