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Europe Markets: European stocks slip as PMI shows business activity surging; U.S. futures hold steady after Powell

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European stocks struggled on Wednesday, with fresh data showing eurozone business activity growing at the fastest rate in 15 years, while U.S. equity futures inched up. Shares of Pernod Ricard rose after an upbeat forecast.

The Stoxx Europe 600 index
SXXP,
-0.30%

fell 0.2%, while the German DAX
DAX,
-0.60%

and French CAC 40
PX1,
-0.49%

indexes fell 0.4% each. The FTSE 100
UKX,
+0.03%

was flat.

U.S. equity futures
ES00,
+0.03%

YM00,
+0.13%

NQ00,
+0.03%

were modestly higher across the board. On Tuesday, the Dow industrials
DJIA,
+0.20%

gained 69 points, or 0.2%. The S&P 500 
SPX,
+0.51%

rose 0.5%, while the Nasdaq Composite 
COMP,
+0.79%

advanced 0.8%, logging a fresh record close.

Markets were buoyed by Federal Reserve Chair Jerome Powell, who reiterated in his testimony to Congress that higher inflation would be transitory. That followed Monday’s comments from New York Fed President John Williams, who said that with unemployment still high, interest rates would stay low for the moment.

Stocks tumbled last week, after the Fed appeared to move forward the timeline for projected interest rate increases to 2023.

Data were swinging into focus for Wednesday, with the IHS Markit flash eurozone composite purchasing managers index for June climbing to 59.2 from 57.1 in May, and marking an 180-month high. That’s as economies in Europe continued to reopen and COVID-19 vaccines rolled out across the continent.

“The eurozone economy is booming at a pace not seen for 15 years as businesses report surging demand, with the upturn becoming increasingly broad-based, spreading from manufacturing to encompass more service sectors, especially
consumer-facing firms,” said Chris Williamson, chief business economist at IHS
Markit, in a comment accompanying the data.

Among stocks on the move, shares of Pernod Ricard
RI,
+2.36%

rose 2.7%, after the French drinks group raised its guidance for fiscal 2021, citing a stronger-than-expected recovery. Pernod is now forecasting organic growth in profit from recurring operations for fiscal 2021 of around 16%, up from previous guidance of 10%.

Vodafone
VOD,
+0.65%

VOD,
+0.71%

shares rose 1%, after the telecoms giant said its entire European operations will be fully powered by electricity from renewable sources starting on July 1, as it aims to reach net zero carbon emissions by 2030.

On the downside, shares of French luxury-goods group LVMH Moët Hennessy Louis Vuitton
LVMH,
-2.03%

fell 1.3%. Pharmaceutical giant GlaxoSmithKline
GSK,
-1.45%

GSK,
-1.76%

was another loser, with those shares down 1.5%.

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