European Stocks End Lower in Shortened Week

European stocks ended lower on Friday in a shortened trading week, weighed down by luxury goods firms and alcohol producers.

Attention turned to economic data for clues on interest rate paths and policies under President Trump.

Sectors exposed to China, including mining, luxury goods, and automotive stocks, were under pressure, despite China’s pledge to increase long-term Treasury bond financing to stimulate business and consumer investment.

Investors are concerned about China’s economic outlook and a potential trade war with the U.S. ahead of Trump’s inauguration on January 20.

The French stock market, home to many top luxury brands, fell 1.5%, its largest single-day drop in over seven weeks. Stellantis shares dropped 3.5% following reports of a 37% decline in vehicle production last year.

Alcohol manufacturers also saw sharp declines after the U.S. Surgeon General called for cancer warnings on alcoholic beverages. Campari dropped 5.2%, and Anheuser-Busch InBev fell 2.8%.

2024 Stock Market Recap

U.S. stock markets performed well in 2024, driven by optimism around AI and Fed rate cuts, while European gains were more modest.

Despite reaching historical highs, the STOXX 600 remained subdued due to concerns about economic slowdown, political uncertainty, and the threat of U.S. tariffs under Trump.

DAX

ECB policymaker Yannis Stournaras projected a 2% interest rate by fall, indicating further easing aligned with market expectations.

Ignacio Teson

Economist and Financial Analyst

Ignacio Teson is an Economist and Financial Analyst. He has more than 7 years of experience in emerging markets. He worked as an analyst and market operator at brokerage firms in Argentina and Spain.