EUROPE ENDS IN DISPERSED ORDER
(Reuters) – European stocks ended on a cautious note on Friday after a hesitant session, marked once again by lingering concerns about inflation and global growth.
In Paris, the CAC 40 gained 0.14% to 5,931.06 points. The British Footsie ended unchanged (-0.01%) and the German Dax gained 0.23%.
The EuroStoxx 50 index fell 0.19%, the FTSEurofirst 300 by 0.02% and the Stoxx 600 by 0.02%.
On Wall Street, the Dow Jones lost 0.16%, the S&P-500 0.11% and the Nasdaq Composite 0.24% at the close in Europe.
The policies of central banks, whose leaders repeated this week their determination to limit inflation, raise fears of a risk of recession, impacting equity markets and benefiting safe havens.
“Few asset classes can potentially provide satisfactory returns given the risks mentioned,” the Aviva Investors France team said in a note.
“Equity markets are worried about a recession, which however seems unlikely to us in the immediate future. But, we share the idea that the risks of a hard landing are higher for 2023,” Aviva added.
The indicators published in the morning for the euro zone showed a sharper than expected acceleration in consumer price inflation, reaching the historic level of 8.6% over one year, and a drop in manufacturing production in June for the first time since the start of the COVID-19 epidemic in the spring of 2020.
The Stoxx index of basic resources, cyclical par excellence, was the biggest loser at the sector level in Europe with 2.46%: in London, Glencore lost 4.21% and Anglo American lost 3.93%.
European groups linked to the semiconductor industry fell after disappointing quarterly forecasts from the American Micron.
STMicroelectronics, Infineon and ASML fell between 3% and 5.4% in its wake.
The Stoxx technology index fell 1.97%.
Up, Sodexo gained 4.06%, driven by the publication Friday of a turnover in the third quarter above expectations and the confirmation of its annual outlook.
THE INDICATORS OF THE DAY
Among the US indicators of the day, construction spending recorded an unexpected drop in May of 0.1%, which proves once again that the tightening of monetary policy by the Federal Reserve is affecting the economy.
US manufacturing growth slowed more than expected in June to 53.0, the lowest since June 2020, and the new orders index contracted for the first time in two years.
Fears about the economy and inflation are benefiting government bonds, which translates into a sharp decline in bond yields: that of the ten-year German Bund and its French equivalent have reached their lowest level since one month at 1.163% and 1.721% respectively.
In the United States, the yield on ten-year Treasuries fell by seven basis points to 2.9023%.
On the currency market, the dollar, taking advantage of its safe haven status, advanced by 0.62% against a benchmark basket. The euro is trading around $1.0404, down 0.74%
Oil prices are up, erasing some of the previous day’s losses, supply disruptions in Libya and a planned production outage in Norway due to a social unrest overriding fears of a reduction in Requirement.
Brent gained 2.27% to 111.5 dollars a barrel and US light crude (West Texas Intermediate, WTI) 2.54% to 108.45 dollars.
TO FOLLOW on Monday:
(Written by Olivier Cherfan in Gdansk, edited by Sophie Louet)