The Dual Trends of the European Financial Market: Stock Market and Retail Sales

On Friday, June 6th, the European stock market showed a positive upward trend. The pan-European STOXX 600 index climbed 0.32% (1.76 points) and finally closed at 553.64 points, with an overall weekly increase of 0.6%. Among them, financial stocks performed particularly outstandingly, surging 1.3%, becoming the key force driving the index upward.

The positive performance of the European stock market this time was mainly driven by two factors: the better-than-expected US non-farm payrolls data and the reduced concerns about trade wars. The May non-farm payrolls data released by the US Department of Labor showed that the number of newly added jobs reached 139,000, exceeding market expectations. Although the employment data for the previous two months was revised down by a total of 95,000, the unemployment rate remained stable at 4.2%, and the monthly increase in hourly wages reached 0.4%, also higher than expected. This data strongly demonstrates that the US job market still maintains a certain degree of resilience, not only injecting impetus into US economic growth but also greatly enhancing global investors' confidence in the economic outlook.

At the same time, the easing of Sino-US trade tensions also gave a significant boost to the European stock market. US President Trump revealed on Friday that the US Treasury Secretary, Commerce Secretary, and US Trade Representative will hold discussions with Chinese representatives on a trade agreement in London on Monday, June 9th, and stated that the talks "should go very smoothly." This news instantly ignited the market's optimism about the progress of the Sino-US trade agreement. Europe occupies an important position in the global trade system. The easing of Sino-US trade tensions undoubtedly creates a more favorable external environment for its economic and corporate development, and investors' confidence has been significantly enhanced accordingly.

However, behind the remarkable performance of the European stock market, the retail sales data in the eurozone revealed signs of weakness. The April retail sales data in the eurozone showed only a flat performance, contrary to expectations. High inflation and concerns about economic slowdown continue to suppress household spending.

Looking at the specific data, the growth in food and automotive fuel sales partially offset the decline in non-food product sales. Sales of food, beverages, and tobacco in April moderated compared to the 0.8% decline in March. After a 1.1% increase in March, automotive fuel sales experienced a significant 2.3% drop in April. However, sales of other non-food products achieved a 0.5% increase in April. Overall, the slight growth in retail sales reflects that under the dual pressures of high inflation and economic uncertainty, the consumption willingness and ability of eurozone consumers have been significantly suppressed.

High inflation has led to a decline in consumers' real purchasing power, and concerns about economic slowdown have made consumers more cautious about their spending. This data also implies that eurozone economic growth may face certain obstacles, and further policy support is urgently needed to stimulate consumption and promote economic growth.

Looking ahead, the European stock market will still be affected by US economic data and the progress of Sino-US trade negotiations in the short term. If the US economy can maintain stable growth and the Sino-US trade agreement achieves substantial results, the European stock market is expected to continue its upward trend. However, investors also need to pay attention to changes in Europe's own economic fundamentals and policies, as well as the potential impacts of economic and political risks in other regions of the world on the European stock market.

Regarding eurozone retail sales, with the gradual stabilization of inflation levels and adjustments in economic policies, there may be improvements in the future. However, given the persistent global economic uncertainties, the restoration of consumer confidence will take time, and the path to growth in retail sales remains fraught with challenges.

Overall, the current European financial market presents a situation where the stock market and retail sales are out of sync. When making investment decisions, investors need to comprehensively consider various factors and maintain a cautious attitude. Policy makers should also closely monitor changes in the economic situation and timely introduce appropriate policy measures to promote stable economic growth and boost the consumer market.