by Claude Chendjou
PARIS (Reuters) – The main European stock markets ended in the red on Tuesday and Wall Street was also trending downward at mid-session, in a context of caution before Wednesday’s decisions by the American Federal Reserve (Fed).
In Paris, the CAC 40 ended down 0.99% at 7,984.93 points. The British Footsie, rich in raw materials, limited its losses to 0.04%. The German Dax declined by 1.08%.
The EuroStoxx 50 index fell by 1.2%, the FTSEurofirst 300 by 0.66% and the Stoxx 600 by 0.68%.
Over the month as a whole, the CAC 40 lost 2.69% and the Stoxx 600 1.52%.
“We’ve hit new highs for the S&P this year, but there comes a point where the market has to digest those gains,” says Sam Stovall, chief investment strategist at CFRA Research, noting that the famous stock market adage “sell in May and s ‘Sell in may and go away’ may have happened a month in advance.
At the close in Europe, the Dow Jones fell 0.86%, the Standard & Poor’s 500 fell 0.74% and the Nasdaq fell 0.87%, as the Fed began a two-day policy meeting monetary.
Even before the Fed’s decisions, investors fear a persistence of inflationary pressures in the United States, which would be likely to dissuade the central bank from quickly easing its monetary policy.
Data released Tuesday showed that the index measuring labor costs in the United States posted stronger than expected growth, of 1.2%, in the first quarter, against a backdrop of rising wages.
After the publication of this statistic, bond yields rose further as money markets now only expect the Fed to cut rates by around 30 basis points this year, according to LSEG data.
In Europe, where numerous macroeconomic indicators were published during the day, the hesitant trend at the start of the morning gave way to a more marked decline in the wake of Wall Street.
Most of the major sectors of the pan-European Stoxx 600 finished in the red, with cyclical sectors such as automobiles (-4.18%) also being affected by manufacturers’ results.
VALUES IN EUROPE
In the automobile industry, Stellantis fell 10.03% on a cautious margin target in the first half, dragging Renault (-5.51%) into its decline.
Mercedes-Benz plunged 5.15%, the manufacturer having announced that it wanted to remain firm on its prices despite a difficult first quarter, while Volkswagen lost 4.64% after a 20% plunge in its quarterly profit.
In finance, HSBC (+4.11%) ended in the green, supported by a quarterly result higher than forecasts, despite the announcement of the surprise departure of its managing director Noel Quinn.
Prudential, on the other hand, fell by 5.44% due in particular to the mediocre performance of its Chinese joint venture CITIC Prudential Life. The Spanish bank BBVA took 3.36%, saying it had approached its competitor Sabadell with a view to a possible merger.
In air transport Air France-KLM (-4.29%) and Lufthansa (-0.42%) finished in the red after a difficult first quarter and committed to reducing their costs.
In other sectors Rexel lost 4.86% after a falling quarterly turnover, while the satellite operator SES fell by 7.84% after the announcement of the acquisition of Intelsat for 3.1 billion dollars (2.8 billion euros).
TODAY’S INDICATORS
In France, the economy accelerated in the first quarter by 0.2%, but according to INSEE, inflation rebounded over one month in April, by 0.5%.
In Germany, today’s data shows a stagnation in the unemployment rate in April at 5.9%, economic growth slightly better than expected in the first quarter (+0.2%) and retail sales above expectations in March ( +1.8%).
In the United States, consumer confidence deteriorated against all expectations in April, with the Conference Board index at 97.0 after 103.1 in March.
RATE
The yield on ten-year US Treasury bonds rises 4.5 points, to 4.6571%, and that of two years, a little more than three points, to 5.008%.
The yield on the ten-year German Bund ended up 5.5 points, at 2.585%, and the two-year yield gained 7.4 points, at 3.032%. The 10-year rate, however, remained below the five-month peak reached last Thursday at 2.65% while two members of the European Central Bank (ECB), Pablo Hernandez de Cos and Francois Villeroy de Galhau, confirmed the outlook. of a rate cut in June in the euro zone.
CHANGES
The dollar rose by 0.40% against a basket of reference currencies, including the euro which stood at 1.0683 dollars (-0.34%) and the pound sterling at 1.2514 dollars (-0. 37%)
The Japanese currency is trading at 157.51 yen per dollar after briefly exceeding the threshold of 160 the day before, fueling speculation of an intervention by the Japanese authorities to the tune of 35 billion dollars to stabilize the yen.
OIL
The oil market is falling against a backdrop of an increase in American production to 13.15 million barrels in February according to figures from the EIA, the American Energy Information Agency. The talks in Cairo with a view to a truce between Israel and Hamas are also contributing to the decline in crude oil prices.
Brent fell 0.63% to $87.84 per barrel and American light crude (West Texas Intermediate, WTI) fell 1.08% to $81.74.
(Writing by Claude Chendjou, edited by Kate Entringer)
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