European Equities: Economic Data and COVID-19 in Focus

The Majors

It was a bearish end to the week for the European majors on Friday. The CAC40 slid by 2.02%, with the DAX30 and the EuroStoxx600 falling by 1.71% and by 1.87% respectively.

Economic data from France, Germany, and Spain failed to support the European majors on the day.

Concerns over vaccine supply shortages across the EU and low vaccination rates weighed on riskier assets.

Supply issues faced by the EU could further delay any economic recovery. New strains of the virus have also forced governments to introduce stricter containment measures.

The Stats

It was a busy day on the economic calendar. 4^th quarter GDP figures for France, Germany, and Spain were key stats on the day.

French consumer spending and German unemployment numbers, together with Spanish inflation figures were also in focus.

The stats were skewed to the positive, with both Germany and Spain avoiding economic contractions in the 4^th quarter.

Germany’s economy expanded by 0.1%, with Spain’s economy expanding by 0.4%. France’s economy struggled, however, with the economy contracting by 1.3%.

At the end of the year, French consumer spending jumped by 23%, reversing an 18.9% slump from November.

German unemployment fell by a further 41k in January, following a 40k decline in December, to leave the unemployment rate at 6.0%.

From the U.S

It was a busier day on the U.S economic calendar.

Personal spending, inflation, and Chicago PMI figures were in focus.

The stats were also skewed to the positive but also failed to support the European majors on the day.

Personal spending fell by a further 0.2%, following a 0.7% decline in November. Economists had forecasted a 0.4% decline.

Inflationary pressures picked up at the end of the year. The annual rate of core inflation rose from 1.4% to 1.5%.

For January, Chicago’s PMI jumped from 59.5 to 63.8, supporting a rosier outlook for the manufacturing sector.

The Market Movers

For the DAX: It was a bearish day for the auto sector on Friday. Volkswagen slid by 1.84%, with BMW and Daimler falling by 1.38% and by 1.59% respectively. Continental saw a more modest 0.04% loss on the day.

It was a particularly bearish day for the banks. Deutsche Bank and Commerzbank slid by 3.42% and by 4.76% respectively. Concerns over the economic outlook weighed on the sector.

From the CAC, it was a bearish day for the banks. BNP Paribas slid by 3.46%, with Credit Agricole and Soc Gen falling by 1.99% and by 2.11% respectively.

It was also a bearish day for the French auto sector. Stellantis NV fell by 1.36%, with Renault ending the day with a modest 0.45% loss.

Air France-KLM and Airbus SE ended the day down by 2.89% and by 2.29% respectively.

On the VIX Index

It was back into the green for the VIX on Friday. Partially reversing an 18.81% slide from Thursday, the VIX rose by 9.53% to end the day at 33.09.

The Dow and the NASDAQ slid by 2.03% and by 2.00% respectively, with the S&P500 rose falling by 1.93%.