Europe ends up in the green, US inflation worries less – 12/01/2022 at 6:16 pm


EUROPEAN SCHOLARSHIPS END GREEN

by Claude Chendjou

PARIS (Reuters) – European stock markets ended higher on Wednesday in the wake of Wall Street, which was moving in the green at mid-session, stock markets in the United States being supported by the publication of inflation figures globally in line with expectations and comments deemed reassuring the day before Jerome Powell, the chairman of the US Federal Reserve.

In Paris, the CAC 40 ended with a gain of 0.75% to 7,237.19 points. The British Footsie took 0.71% and the German Dax 0.43%.

The EuroStoxx 50 index advanced 0.78%, the FTSEurofirst 300 0.69% and the Stoxx 600 0.64%.

Statistics released on Wednesday by the US Department of Labor showed that the rise in consumer prices in the United States had decelerated in December to stand at 0.5% compared to November, even if over one year it represented l strongest increase in 40 years (+ 7.0%).

These figures come as no surprise, however, since economists polled by Reuters forecast an average increase of 0.4% month-on-month and an increase of 7.0% year-on-year.

On Tuesday, statements to Congress by Jerome Powell, the chairman of the US Federal Reserve, deemed reassuring about the pace of the rise in interest rates, had already allowed Wall Street indices to end in the green while European markets had closed lower.

The surge in investor confidence is also being fueled by lower-than-expected producer price figures in China, which could encourage further easing of monetary policy in Beijing.

In Europe, on the indicator side, industrial production in November, however, posted an unexpected drop of 1.5% one year.

VALUES IN EUROPE

In Europe, the basic resources compartment (+ 3.11%) and the energy compartment (+ 2.3%) recorded the strongest increases in the Stoxx 600, thanks to anticipations of new support measures for the Chinese economy and an increase in global demand for crude. In Paris, TotalEnergies advanced 3.06%, ArcelorMittal 6.37%, while in London BP gained 3.20%, BHP Group 4.40%, AngloAmerican 3.87% and Rio Tinto 2.84 %

The European sector of new technologies (+ 1.54%) for its part benefited from the rise of the Nasdaq, whose securities had been massively sold in previous sessions. Capgemini gained 1.29%.

On the downside, the health sector (-0.54%) was penalized by the ebb in fears about the Omicron variant of the coronavirus. In France, Olivier Véran, the Minister of Health, spoke of a possible slowdown in the circulation of this strain.

EDF, in decline for a good part of the session, ended up almost stable despite the announcement of a new delay of the EPR reactor at Flamanville, the cost of which is now estimated at 12.7 billion euros.

In corporate results, OVHcloud finished with a gain of 4.55%, the leading European provider of cloud computing services having confirmed its annual targets.

Rexel, a group specializing in products and services for the energy sector, for its part jumped 10.31%, posting one of the best performances of the Stoxx 600, thanks to results exceeding its objectives for the year 2021.

In contrast, the Dutch health tech group Philips plunged 15.21% after a warning on its results.

Also in Amsterdam, the European number one meal delivery company Just Eat Takeaway.com gained 3.91% thanks to a 14% growth in its order intake in the fourth quarter and a confirmation of its objectives this year.

In London, the British distributor Sainsbury on Wednesday raised its annual profit forecast, allowing the title to close on a gain of 3.11%.

A WALL STREET

At the time of closing in Europe, the Dow Jones took 0.16%, the Standard & Poor’s 500 0.31% and the Nasdaq 0.30%.

On the equity markets, the technology compartment, which is particularly sensitive to changes in interest rates, rose further, by 0.57%, in the absence of any indication from Jerome Powell on the possibility of four increases in rates. Fed rate this year.

Microsoft and Tesla take 1.4% and 2.6%.

Apple is up 0.6% as Goldman Sachs said iPhone delivery times suggested supply was now largely meeting demand after supply difficulties last year.

On the downside, Biogen (-8.1%) suffers both from a lower recommendation and the limited scope of its treatment for Alzheimer’s disease, the US health agency CMS having announced that the Medicare program will not would only pay for treatments against this pathology for patients enrolled in a clinical trial.

In mergers and acquisitions, the satellite television operator Dish Network gains 3.8% in favor of discussions with its competitor DirecTV, a subsidiary of AT & T (+ 0.2%), according to an article in New York Post.

In terms of sectors, all the major indices of the S & P-500 are moving in the green, with the exception of health, which is down 0.41%.

CHANGES

On the foreign exchange market, the dollar lost 0.54% against a basket of benchmark currencies after statements by Jerome Powell and unsurprisingly inflation figures.

The euro is up 0.52% to 1.1424, its highest level since the start of the year.

RATE

Ten-year US Treasury bill yields react to US inflation figures, dropping near a basis point to 1.737% after peaking at 1.808% on Monday, with monetary tightening expected to accelerate in the USA.

The ten-year German Bund rate, the benchmark for the euro zone, contracted 2.4 basis points to -0.056%, while its French equivalent with the same maturity ended up down 1.8 points to 0.276 %.

“The figure on inflation is in itself impressive (…) but it was expected. The market reacted immediately. So there were probably expectations for it to emerge even higher”, comments Luca Cazzulani, strategist at UniCredit.

OIL

The oil market continues to recover and is now moving to its highest for two months, supported both by the current tensions on supply and by the ebb in fears related to the Omicron variant. Weekly figures from the Energy Information Administration (EIA) on inventories in the United States further showed that they had fallen to a low since October 2018.

A barrel of Brent rose 1.15% to 84.70 dollars and that of US light crude (West Texas Intermediate, WTI) 1.61% to 82.53 dollars.

(Report Claude Chendjou, edited by Jean-Michel Bélot)



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