Strong U.S. Retail Sales Boost Global Stocks

Following strong US economic data, Wall Street stocks rallied Wednesday after shrugging off early weakness.

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Retail sales in the US rose three percent to $697.0 billion last month, easily beating estimates -- something that has sometimes worried equity investors nervous about further interest rate increases by the Federal Reserve.

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There has sometimes been the mantra that "good news is bad news" for the stock market due to that dynamic.

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There is, however, a shift in Wednesday's pattern, according to analysts.

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Analyst Art Hogan, a B. Riley Financial analyst, said that markets are less optimistic about a sharp decline in the US economy, commonly referred to as a "hard landing."

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There is a possibility that the gains in stocks may have been influenced more by the hopeful economic implications of the January retail sales data rather than the potential negative implications of those data for monetary policy, according to Briefing.com.

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The S&P 500 rose 0.3 percent, leading all three major indices higher.

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The US equity and bond markets appear to be adopting opposing readings of monetary policy, with yields rising.

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In addition, the dollar strengthened against other currencies.

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"Markets could soon turn hawkish on the Fed's rate path as a result of mounting signs of the resilient US economy," said Joseph Manimbo of Convera Holdings. As markets price in late-year rate cuts and the Fed funds rate peaking above 5%, the dollar is poised to gain a significant head of steam."

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An unexpectedly large drop in UK inflation could see the Bank of England pause its rate-tightening cycle, boosting London's FTSE 100 index above 8,000 points.

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Office for National Statistics (ONS) reported that the UK Consumer Prices Index (CPI) fell to 10.1 percent in January from 10.5 percent in December.

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Despite the pound's retreat, inflation remains high, but foreign exchange markets are undergoing a shift.

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"With FTSE 100 companies generating the majority of their revenues outside the UK, the pound being crushed as it is today is often a bullish factor," Oanda analyst Craig Erlam told AFP.

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A total of 7,997.83 points were added to the FTSE 100 on Thursday.

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Paris rose 1.2 percent and Frankfurt added 0.8 percent.

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The British bank missed its earnings target in the final quarter of last year due to higher provisions for loans that are expected to turn sour due to high inflation, according to Barclays shares.

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After passing on higher costs to consumers, Dutch brewer Heineken reported a jump in 2022 sales. The company's net profit fell and its share price rose by 2.8%.

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Airbnb's stock surged 13.4 percent after reporting better-than-expected profits as travel demand was described as "strong."

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