European Equities: Manufacturing PMI and Retail Sales in Focus

The Majors

It was a relatively bearish end to the week for the European majors on Friday. The CAC40 fell by 0.53%, with the DAX30 and the EuroStoxx600 ending the day down by 0.12% and by 0.28% respectively.

Economic data from the Eurozone weighed on the European majors at the end of the week.

1^st quarter GDP numbers from Germany and the Eurozone in particular left the majors in the red, with French consumer spending figures also a drag on Friday.

From the U.S, positive economic data failed to support the majors, with the latest round of stats pointing to economic divergence stemming from extended COVID-19 containment measures across the Eurozone.

The Stats

It was a busy day on the economic calendar on Friday.

From France, consumer spending, inflation, and 1^st quarter GDP figures were in focus.

German and Eurozone GDP numbers for the 1^st quarter also drew attention alongside prelim Eurozone inflation figures for April.

French Data

In March, consumer spending fell by 1.1% reversing a 0.3% rise from February. Economists had forecast a 0.4% rise.

Inflationary pressures picked up in April, according to prelim figures. The annual rate of inflation accelerated from 1.1% to 1.3%.

While consumption figures disappointed at the end of the 1^st quarter, GDP numbers came in ahead of forecasts.

The French economy expanded by 0.4% in the 1^st quarter, coming in ahead of a forecasted 0.1% growth. In the 4^th quarter, the economy had contracted by 1.4%.

German Economy

In the 1^st quarter, the German economy contracted by 1.7%, which was worse than a forecasted 1.5% contraction. The German economy had expanded by a modest 0.3% in the 4^th quarter.

Year-on-year, the economy contracted by 3.3% in the 1^st quarter. The economy had contracted by 2.7% in the final quarter of last year. Economists had forecast a contraction of 3.6%.

The Eurozone

For the Eurozone, inflationary pressures continued to pick up, with the annual rate of inflation accelerating from 1.3% to 1.6% in April.

In the 1^st quarter, the Eurozone economy contracted by 0.6%, quarter-on-quarter, and by 1.8% compared with Q1 2020.

Economists had forecast a quarterly contraction of 0.8% and a year-on-year contraction of 2.0%.

In the 4^th quarter, the economy had contracted by 0.7% quarter-on-quarter and by 4.9% year-on-year.

While the Eurozone economy contracted once more in the 1^st quarter, the unemployment rate eased from 8.2% to 8.1%.

From the U.S

The FED’s preferred inflation measure and personal spending were in focus alongside finalized consumer sentiment and Chicago PMI figures.

Aligned with stats from earlier in the week, economic data from the U.S continued to impress at the end of the week.

In March, the core PCE Price Index increased by 1.8% year-on-year, up from 1.4% in February. Personal spending was also on the rise, supported by improving labor market and economic conditions. Spending jumped by 4.2%, reversing a 1.0% decline from February.

In April, the Michigan Consumer Sentiment index increased from 86.5 to 88.3, up from a prelim 87.4. Consumer expectations were also on the rise, with the consumer expectations index increasing from 79.7 to 82.7, up from a prelim 79.7.

Also positive, was a jump in the Chicago PMI from 66.3 to 72.1 in April.

The Market Movers

For the DAX: It was another mixed day for the auto sector on Friday. BMW and Continental fell by 0.86% and by 0.58% respectively, with Volkswagen declining by 0.16%. Daimler bucked the trend, rising by 0.16%.

It was also a mixed day for the banks. Deutsche Bank fell by 0.48%, while Commerzbank ended the day up by 0.86%.

From the CAC, it was a mixed day for the banks. Credit Agricole rose by 0.23%, while BNP Paribas and Soc Gen fell by 0.82% and 0.65% respectively.

It was a bearish day for the French auto sector. Stellantis NV and Renault ended the day down by 0.14% and by 0.33% respectively.

Air France-KLM fell by 1.88%, with Airbus SE slipping by 0.06%.

On the VIX Index

It was a second consecutive day in the green for the VIX on Friday.

Following on from a 1.91 gain from Thursday, the VIX rose by 5.68% to end the day at 18.61.

The NASDAQ and the S&P500 fell by 0.85% and by 0.72% respectively, with the Dow ending the day down by 0.54%.