European Shares

Stocks continued their rally in Europe on Friday, alongside US futures, as market sentiment improved following reassuring macro data in addition to positive corporate results. While today’s trading optimism was initially sparked by strong Q2 reports from Apple and Amazon yesterday evening, this morning’s surprising GDP data from Spain and France are driving European benchmarks significantly higher. However, even if July has seen the best performances on stocks in almost two years, many wonder if this current rally will continue further. The current wind of relief has been brought by short-term bullish leverages such as strong corporate results, but the underlying problems that have been driving riskier assets down since the beginning of 2022 remain. The overall environment remains bearish on the long-term for stocks, as traders continue to monitor rising inflation, mounting recession risks as well as tighter monetary policies, and this is likely to prevent most investors to go all out on equity markets for some time at least. That said, investors will be monitoring the new EU CPI figures this morning while Core PCE Price Index data from the US looms in the afternoon.

Pierre Veyret– Technical analyst, ActivTrades

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