European Stocks Mixed as LVMH Slumps on Sales Growth Slowdown
LVMH Faces Slower Growth Amid Post-Pandemic Spending Ease
European stock markets displayed a mixed performance on Wednesday, with the French market experiencing a setback due to weakness in LVMH. The luxury giant reported a 9% increase in third-quarter revenue, signaling a slowdown in growth as post-pandemic spending eased amid inflation and economic turbulence. LVMH’s stock slumped nearly 6% following this news, impacting other fashion sector shares such as Kering, Hermes, and Richemont.
Fed Officials Suggest End of Rate Hikes
While LVMH’s decline affected the market, losses were limited as confidence returned to global equity markets after recent Middle East events. Several Federal Reserve officials made dovish comments, fueling hopes that the central bank is nearing the end of its interest rate increases. Atlanta Fed President Raphael Bostic expressed his belief that there is no longer a need for rate hikes, contributing to the positive sentiment in the market.
Inflation Data and Market Outlook
The focus later in the session will be on the release of the latest U.S. inflation numbers. Signs of moderating inflation could reinforce the more dovish tone from Fed members regarding future policy, setting the market tone for the rest of the year. Futures traders currently predict a nearly 90% probability of the Fed holding rates steady in November. In Europe, inflation data indicates a rise of 0.3% for September, still above the European Central Bank’s 2% medium-term inflation target.
Crude Oil’s Response to Middle East Turmoil
Oil prices experienced a slight increase as traders grappled with the potential for supply disruptions due to the turmoil in the Middle East. The market has calmed down after Monday’s rise in crude benchmark contracts, but concerns remain about political and economic contagion resulting from the recent attacks in Gaza. Additionally, market participants will be monitoring the U.S. weekly oil inventory data from the American Petroleum Institute, which will be released a day later than usual due to the Columbus Day holiday.
Overall, European stock markets continue to navigate various factors affecting their performance. The impact of LVMH’s slower growth, coupled with the anticipation of inflation data and the influence of events in the Middle East, will shape market sentiment and investor decisions.
