Video: Wall Street shakes off inflation rise and closes higher (Reuters)
European stocks were headed for a fourth straight monthly gain, but May was set to end on a weaker note after inflation picked up in Germany and data was soft out of China and Japan.
Market closures due to holidays in London and the U.S. also kept many investors on the sidelines.
The Stoxx Europe 600 eased 0.2% to 447.80 on Monday, set to give up record territory from Friday, when it closed at 448.98. For May, the index has gained around 2.4% month to date. The German DAX slipped 0.3% and the French CAC 40 eased 0.2%, but are up around 2.2% and 3.2%, respectively, for the month.
All indexes marked their fourth-straight monthly advances, similar to the Dow Jones Industrial Average and S&P 500 indexes which finished the month’s trading on Friday. The Nasdaq Composite fell for the month. U.S. stock futures indicated a softer start for Tuesday when trading resumes.
Wall Street equities booked weekly gains after data showed strength in the economy, though inflation remains a worry after the U.S. PCE inflation rate approached its highest level in nearly 13 years. This week’s batch of data will include all-important nonfarm payrolls for May.
A clutch of global data was released on Monday, starting with weaker retail sales and flat Chinese manufacturing in May. The Nikkei 225 index slid 0.9% and was flat on the month, while China’s CSI 300 index rose 0.2% and ended the month with a 4% gain.
China’s official manufacturing purchasing managers index (PMI) eased in May, while nonmanufacturing PMI, which includes services and construction activity, rose modestly. Also from China came news that the southern city of Guangzhou was forced to cancel hundreds of flights after a surge in COVID-19 cases.
Elsewhere, May retail sales in Japan fell from the previous month and factory output rose above prepandemic levels for the first time, but came in short of expectations.
Meanwhile, German consumer prices rose in May, beating expectations, according to preliminary data released by the statistics office Destatis on Monday.
Also Monday, the Organization for Economic Cooperation and Development lifted its global economic output forecasts for 2021 thanks to vaccines and U.S. fiscal stimulus. Its U.S. growth forecast was lifted to 6.9% from 6.5%, while growth for the eurozone was boosted to 4.3% from 3.9%. and China growth was raised to 8.5% from 7.8%.
But the Paris-based research body warned that emerging countries were falling far behind. Its growth forecast for India was cut to 9.9% from 12.6%.
Among companies in focus, Assicurazioni Generali on Monday launched a 1.18 billion-euro ($1.44 billion) takeover offer for smaller peer Societa Cattolica di Assicurazione in a move to beef up its position as Italy’s largest insurer, reported Dow Jones Newswires. Shares of Assicurazioni were flat, but Societa shares surged 12%.
Shares of Kinnevik climbed 4% after the Swedish investment company said digital-health company Babylon Holdings Ltd. is exploring going public via a special-purpose acquisition company deal, reported Dow Jones Newswires. Kinnevik, which owns a 16% stake in Babylon, said Sunday that that no definitive decision has been taken to pursue any transaction.