by Claude Chendjou
PARIS (Reuters) – European stock markets ended higher on Friday and Wall Street was also trading in the green late morning in New York, with optimism about China and financial publications from companies like Netflix momentarily taking precedence over fears of a recession and the latest restrictive statements from central bankers.
In Paris, the CAC 40 ended with a gain of 0.63% to 6,995.99 points. Britain’s Footsie advanced 0.30% and Germany’s Dax rose 0.76%.
The EuroStoxx 50 index gained 0.63%, the FTSEurofirst 300 0.32% and the Stoxx 600 0.37%.
Over the week as a whole, the CAC 40 however lost 0.39% and the Stoxx 600 0.09% in a context of profit taking, the pan-European index having erased over the first three weeks of 2023 close to the half of the 12.9% loss recorded in 2022.
Investors’ caution is fueled by statements by officials from the European Central Bank (ECB) and the US Federal Reserve (Fed) who have been insisting for several days on the need for prolonged monetary tightening in the face of inflation that they consider still high.
Patrick Harker, the president of the Philadelphia Fed, however, stood out from his colleagues on Friday by saying that it was now time to slow the pace of rate hikes.
VALUES IN EUROPE
The basic resources compartment (+0.77%), that of energy (+0.44%) and luxury stocks (LVMH and Hermès ended up around 1%) were sought after with the hope that the reopening of the Chinese economy will benefit global growth.
The distribution index (+1.09%) took the lead of the Stoxx 600, regaining some of the ground lost the day before.
In corporate news, the Swedish group Ericsson, weighed down by the slowdown in the US market in the fourth quarter, fell 4.7%, dragging in its wake Nokia, which dropped 3.68%.
AT WALL STREET
At the time of the close in Europe, the Dow Jones advanced by 0.25%, the Standard & Poor’s 500 by 0.83% and the Nasdaq by 1.4%.
Netflix jumps 6.14% after reporting higher-than-expected subscriber numbers in the fourth quarter as the tech sector is rocked by a succession of layoff plans announced by Microsoft (+2.67%) , Amazon (+1.94%) or even Alphabet (+4.06%) against a background of rising interest rates and economic uncertainties.
“Investors are starting to view tech as a completely depressed sector but (their) quality and fundamentals are holding up,” said Sylvia Jablonski, chief investment officer at Defiance ETFs.
THE INDICATORS OF THE DAY
Home resales in the United States fell in December to 4.02 million units at an annualized rate, their lowest level in 12 years, but the recent fall in interest rates in real estate combined with the slowdown in the growth in the median price of goods is fueling hopes of a recovery in the sector.
Retail sales in the UK posted an unexpected contraction of 1% in December.
CHANGES
The dollar took advantage of its status as a safe haven asset to appreciate by 0.14% against the other major currencies.
The Japanese currency, which trades at 129.89 yen per dollar, is affected by the continued ultra-accommodative policy of the Bank of Japan (BoJ).
The pound fell 0.14% to $1.2372 after UK retail sales figures.
The euro nibbles 0.05%, to 1.0832 dollar.
RATE
Bond yields in Europe are being driven by restrictive statements from several ECB officials, including Francois Villeroy de Galhau, Olli Rehn and Christine Lagarde herself.
The ten-year German Bund yield ended up 11.7 basis points to 2.17%, but remains below its 11-year high hit on January 2 at 2.569%.
Its same-maturity U.S. equivalent advanced 9.6 basis points to 3.49% as Kansas City Fed President Esther George said on Friday she was waiting for more evidence of a slowdown in inflation in the US. services.
OIL
Oil prices are heading for a second consecutive week of gains, still supported by the prospect of a jump in demand in China after the lifting of health restrictions linked to COVID-19.
Brent rose 0.73% to 86.79 dollars a barrel and US light crude (West Texas Intermediate, WTI) advanced 0.77% to 80.95 dollars.
TO BE FOLLOWED ON MONDAY:
THE MARKET SITUATION:
(Some data may show a slight shift)
THE FENCE IN
EUROPE
Indices Last Var. Var. %YTD
Points
Eurofirst 300 1,785.30 +6.26 +0.35% +6.37%
Eurostoxx 50 4119.90 +25.62 +0.63% +8.60%
CAC 40 6,995.99 +44.12 +0.63% +8.07%
Dax 30 15,033.56 +113.20 +0.76% +7.97%
FTSE 7770.59 +23.30 +0.30% +4.28%
SMI 11295.02 +36.05 +0.32% +5.27%
The values to follow in Paris and in
Europe: [WATCH/LFR]
THE TREND TO
WALL STREET
Indices Last Var. Var. %YTD
Points
Dow Jones 33135.68 +91.12 +0.28% -0.03%
S&P-500 3932.85 +34.00 +0.87% +2.43%
Nasdaq 11014.92 +162.65 +1.50% +5.24%
Nasdaq 100 11474.93 +179.26 +1.59% +4.89%
Minutes of the session on Wall
Street: [.NFR]
“The Day Ahead” – Update on the next session
on Wall Street [DAY/US]
CHANGES
Standby Price Var.% YTD
Euro/Dlr 1.0833 1.0827 +0.06% +1.22%
DLR/Yen 129.92 128.42 +1.17% -0.91%
Euro/Yen 140.76 139.10 +1.19% +0.33%
Dlr/CHF 0.9216 0.9162 +0.59% -0.30%
Euro/CHF 0.9986 0.9921 +0.66% +0.92%
Stg/Dlr 1.2374 1.2389 -0.12% +2.29%
Index $ 102.2310 102.0580 +0.17% +6.30%
GOLD
Var. %YTD
Gold Spot 1923.62 1931.39 -0.40% +26.80%
RATE
Last Var. Spread/Bund
(pts)
Future Bunds 138.21 -1.34
10-year Bunds 2.17 +0.00
Bund 2 years 2.58 -0.00
10-year OATs 2.62 -0.00 +44.60
10-year Treasury 3.49 +0.09
Treasury 2 years 4.19 +0.07
OIL
Previous Price Var. Var.% YTD
US light crude 81.00 80.33 +0.67 +0.83% +32.33%
Brent 86.87 86.16 +0.71 +0.82% +31.56%
(Written by Claude Chendjou, edited by Bertrand Boucey)