Inflation across Europe rose an annualized 2.1% in August, which was higher than economists expected.
Elevate Your Investing Strategy:
- Take advantage of TipRanks Premium at 55% off! Unlock powerful investing tools, advanced data, and expert analyst insights to help you invest with confidence.
Economists polled by Reuters (TRI) had forecast that inflation in Europe would remain unchanged from July at 2%. Data from Eurostat shows that core inflation, which removes volatile food, energy, alcohol and tobacco prices, was unchanged from 2.3% in July.
At 2.1%, the latest inflation rate for the European Union (EU) trading bloc is only slightly higher than the European Central Bank’s (ECB) target of 2%. The central bank elected to hold its key interest rate at 2% in July and is expected to remain on the sidelines again at its next meeting in September, according to economists polled by Reuters.
Market Reaction
News of the slightly hotter-than-expected inflation reading sent the Euro currency down 0.6% against the U.S. dollar, while the pan-European Stoxx 600 index declined 0.7%. The news had a slight impact on leading European equities such as Spotify (SPOT), Deutsche Bank (DB), and SAP (SAP).
The European Union’s trade deal with the U.S. that was signed in July has removed uncertainty over tariffs, although there are concerns that the blanket 15% import duty on European goods and services will weigh on economic activity and impact future inflation readings.
Is SPOT Stock a Buy?
The stock of Spotify has a consensus Moderate Buy rating among 27 Wall Street analysts. That rating is based on 20 Buy and seven Hold recommendations issued in the last three months. The average SPOT price target of $767.12 implies 12.20% upside from current levels.
