No panic

European fund indices showed moderate reaction to the FED once again increasing the key rates by 75 bp. ECB is already hinting on a slower pace of key rate growth, which is also a bullish signal for the stocks market. Nevertheless, the trend is yet to change as the inflation is still intense.

However, the last day of the trading week demonstrated moderate optimism among the investors. Also the absence of clear growth of the 10-year yields leaves room for the stock market’s recovery.

Last week leaders and outsiders:

DAX:

Top: Vonovia SE +3.87%, Covestro AG +3.56%, Continental AG +3.07%

Flop: Hannover Rück SE -1.18%, RWE AG St -0.72%, Münchener Rück AG -0.7%

EURO STOXX 50:

Top: PROSUS NV EO -,05 +8.29%, Vonovia SE +4.39%, Intesa Sanpaolo S.p.A. +3.46%

Flop: PADDY POWER PLC EO-,09 -3.6%, Adyen -3.37%, Philips Electronics N.V. -1.21%

Dow Jones (us 30):

Top: Caterpillar Inc. +0.89%, Goldman Sachs Group Inc. +0.83%, Verizon Communications Inc. +0.47%

Flop: salesforce.com Inc. -1.3%, Microsoft Corp. -1.08%, Intel Corp. -1.01%

Considering the above, even a slight improvement of the macroeconomic indicators shall help strengthen the key stock market indices. However, it is yet too early to speak about long term growth, as it is more about the absence of aggressive sales.

Bond market:

Let’s draw our attention to the European bond market, there’s no considerable growth in the 10-year yields in the majority of the European countries. E.g., the German yields are now being traded at a profitability rate quarter percent lower than the October’s estimated maximum. The same is with the French ones. All of this demonstrates the investors’ uncertainty in the ECB keeping up with key rates growth. As a conclusion, one shouldn’t really rely on the rate steadily descend.

Oil market optimism

The buyer’s activity on the oil market increased on the last day of the trading session. The key optimistic factor in that case is China, which can considerably change their lock-down restrictions. Since China remains a leading country in oil export, and the second one after the US in consumption, an increase in the business activity shall provoke a growth of physical demand, and as a result, would support the oil quotes. Further prices growth shall help the demand in the energy sector. However, it is still not about the long term oil prices growth. One