European stocks edged higher on Thursday ahead of Lagarde’s and Bailey’s speech. Germany’s DAX index was up by more than 1% after the release of weak retail sales data and strong manufacturing data. French CAC 40 increased after strong French Manufacturing PMI. UK’S FTSE 100 index was also up after weak manufacturing PMI for June. Euro STOXX 50 also inched higher.
Germany Economic Stance
German weak retail sales for May were a drag in the DAX index. The retail sales for May came in at 4.2% MoM which was lower than the estimated forecast of 5.0%. The sales were 2.4% lower compared to a year ago.
Compared to February 2020, sales in May 2021 were calendar and seasonally adjusted in real terms 3.9% higher. Compared to Mat 2020, retail sales slipped 0.6% in nominal terms.
In May 2021, the retail sales of food, beverages, and tobacco products spiked 3.4% compared to April 2021. Sales in hypermarkets and supermarkets were 2.6% higher than the previous month. The specialty retail trade with food such as fruits, vegetables, meat, and baked foods, surged 5%.
Non-food products recorded significant increases in retail sales in the same month. The retail sales in non-food products edged 6.7% higher in May compared to April. Trade in textiles, shoes, clothing, and leather goods, recorded a 72.1% surge in retail sales compared to April 2021.
Retail trade with goods from department stores were up 15.3%. Sales in building supplies, home furnishings and household supplies rose 9.6%. internet and mail order business were up by 5.7%.
The DAX index was boosted by stronger than expected German Manufacturing PMI. German Manufacturing Purchasing Managers Index (PMI) for June rose to 65.1 from the previous 64.4. it surpassed the estimated forecast of 64.9.
New orders growth and output rates snapped their three-month losing streak in June. The uptick in output growth was boosted by large gains in intermediate goods produce. However, supply bottlenecks hampered output levels in June.
Stocks of finished goods took a nosedive amid signs of new orders outstripping production levels. The rate of gate factory price inflation was on a gradual increase in June. They reached records high for the fourth consecutive month.
Among the best performers in the DAX index include Bayer, Adidas and Covestro. Bayer gained more than 2.15% in its stock earnings. The pharmaceutics company announced European launch of its global Carbon Initiative.
Adidas gained more than 1.80% in its stock prices on Thursday. The design company shortlisted bidders in Reebok sale sources. Adidas bought US fitness label Reebok in 2006 to help compete with Nike but its sluggish performance saw investors call for a disposal of the brand.
Covestro is the leading German company in polymer materials. The company gained more than 1.7% after the company recorded large gains in its revenues.