The Palais Brongniart, former Paris Stock Exchange
by Claude Chendjou
PARIS (Reuters) – European stock markets, except for London, ended Monday slightly lower, while Wall Street moved on weak variations at mid-session, the market sentiment being weighed down by the stalemate of negotiations on the ceiling of the US debt, the fear of new tensions between Washington and Beijing with the banning of Micron in China and the expectation around Fed interest rates next month.
In Paris, the CAC 40 ended down 0.18% at 7,478.16 points. Against the current of other European markets, the British Footsie gained 0.18%, thanks in particular to financial stocks such as Standard Chartered (+3.02%). The German Dax, which recorded a record 16,331.94 points on Friday, fell 0.32%.
The EuroStoxx 50 index fell by 0.22%, the FTSEurofirst 300 by 0.03%. The Stoxx 600 gained 0.01%.
At the time of closing in Europe, the Dow Jones fell 0.29%, while the Standard & Poor’s 500 took 0.12% and the Nasdaq 0.47%.
US President Joe Biden and House of Representatives Speaker Republican Kevin McCarthy are due to meet at 9:30 p.m. GMT at the White House for further talks on the debt ceiling as the June 1 deadline approaches not.
While the Treasury warned of a default, Joe Biden and Kevin McCarthy stressed on Sunday that they had a positive telephone exchange on this file.
Regarding the tensions between China and the United States, Beijing decided on Sunday to ban national operators of key infrastructures from working with the American manufacturer of semiconductors Micron Technology. The move could impact a range of sectors from telecoms to transportation to finance, analysts say.
Pending the publication on Friday of the PCE price index in the United States, the measure of inflation favored by the Federal Reserve (Fed), several officials of the American central bank must speak this week. James Bullard, the president of the St. Louis Fed, estimated on Monday that rates could rise another 50 basis points this year, while his counterpart at the Minneapolis office, Neel Kashkari, judged that they could exceed 6% in view of the persistent inflation in services. The fed funds rate is currently 5.00-5.25% and the markets expect a break in June.
AT WALL STREET
Micron shares fell 2.75%, dragging in their wake Qualcomm and Broadcom, which fell 0.80% and 0.98% respectively.
Meta Platforms gains 1.75% despite a fine of 1.3 billion dollars imposed by European authorities for the processing of users’ personal data, while Apple (-0.50%) is penalized by the lowering of the Loop Capital’s recommendation to “hold”.
VALUES IN EUROPE
In Europe, the variations on the main sectors of the rating were also weak, the best performance going to transport and leisure (+0.63%), while basic resources (-0.38%) showed the greater decline.
In individual values, Novo Nordisk advanced 2.59% after a study showed its new obesity treatment reduced the risk of heart disease and boosted weight loss.
CHANGES
The dollar appreciated by 0.1% against a basket of benchmark currencies, driven by comments deemed restrictive by several Fed officials.
The euro is practically stable at 1.0812 dollars (+0.09%) after touching a seven-week low at 1.0760 on Friday.
The pound sterling is displayed at 1.2426 dollars (-0.14%).
RATE
Yields on ten-year Greek government bonds were very volatile on Monday, moving in a range of 3.836% to 4.016% depending on the latest developments related to the legislative elections. Greek Prime Minister Kyriakos Mitsotakis, whose conservative party won a large victory on Sunday but without an absolute majority, declared that it refused to form a coalition government and wanted new elections to be held on 25th June next.
The yield of the German Bund, a benchmark for the entire euro zone, ended up three basis points, at 2.458%.
In the United States, the yield on ten-year Treasuries also advanced by three basis points, to 3.7187%.
OIL
Oil prices rose slightly as hopes of a rebound in crude demand in the second half outweighed US debt concerns: Brent rose 0.54% to $75.99 a barrel and the US light crude (West Texas Intermediate, WTI) 0.52% to $71.92.
(Some data may show a slight shift)
(Written by Claude Chendjou, edited by Bertrand Boucey)