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European stock markets ended hesitantly on Wednesday in a context dense with events and company results, before crucial monetary policy meetings for the rest of the year.
In Paris, the CAC 40 gained 0.31% to 6,915.07 points, while the German Dax stood still and the British Footsie rose 0.33%.
The EuroStoxx 50 index ended the session with an increase of 0.2%, compared to 0.14% for the FTSEurofirst 300 and a stable Stoxx 600.
The results season is in full swing on both sides of the Atlantic, and surprises in the figures contribute greatly to the movements of the indices.
Europe is thus under pressure from the collapse of Worldline, after the warning on its profits, while technology stocks are suffering from the slowdown in the growth of Alphabet’s cloud computing activities, which is falling sharply on Wall Street.
However, caution remains on the markets which are positioning themselves before several key events.
On Thursday, the European Central Bank will decide whether or not to raise its rates. If the markets are counting on rates remaining at their current level, investors will listen carefully to the institution’s comments, while the conflict in the Middle East and the decline in activity in Europe confirmed Wednesday by the figures of the credit complicates the inflation outlook.
From now on, the duration for which rates will be kept at a restrictive level matters more to the markets than the terminal rate.
Furthermore, GDP growth in the United States, published on Thursday, and PCE inflation expected on Friday will give a final image of the American economy before the next meeting of the Federal Reserve, next Wednesday.
TO VALUES
Worldline collapsed on the stock market by 59.24% after lowering its financial objectives for 2023 and announcing a cost reduction plan in the face of the deterioration of the economic situation. Nexi falls in the wake of Worldline and drops 13.37%.
Kering declined by 3.47% after its quarterly results, during which the group announced a turnover of 4.46 billion euros, a drop of 9% on a comparable basis while analysts expected a decline of ‘around 6%.
Dassault Systemes jumped 7.98% at the top of the Stoxx 600 after revising upwards its earnings per share forecast for 2023 on Wednesday, after faster than expected growth in its turnover in the third quarter.
ASM International advanced 5.91%, among the best performances of the Stoxx 600, after having exceeded its turnover forecasts for the third quarter on Tuesday, thanks to a strong contribution from the Chinese market.
Deutsche Bank rose 8.18% to become one of the best performers on the Stoxx 600 after its quarterly results, as the bank reported an 8% drop in third-quarter net profit, smaller than expected .
A WALL STREET
Wall Street hesitates at closing time in Europe, Alphabet pushing the tech sector downward, but investors’ caution before the publication of other results and indicators at the end of the week limits losses.
At closing time in Europe, trading on the New York Stock Exchange indicated an increase of 0.24% for the Dow Jones, compared to a drop of 0.86% for the Standard & Poor’s 500 and 1.5 % for the Nasdaq Composite.
RATE
Yields in the United States are rising again after the publication of data on mortgage loans, and the return of selling pressure from systematic buyers.
At the close of the European interest rate markets, the ten-year Treasury yield rose 8.1 bp to 4.9101%, while the two-year rate increased 3 bp to 5.0915%.
The yield on the German ten-year rose by 5.9 bps to 2.883%, while that of the two-year rate rose by 2.5 bps to 3.181%.
CHANGES
The foreign exchange markets are stable in a wait-and-see context before the ECB’s decision on Thursday and the publication of new activity data in the United States on Thursday and Friday.
The dollar is standing still against a basket of reference currencies, while the euro remains at $1.0587. The pound sterling fell 0.16% to $1.2139.
OIL
Crude is advancing moderately, worried about the slowdown in developed economies, but supported by tensions in the Middle East. Brent rose 0.78% to $88.76 per barrel, with American light crude (West Texas Intermediate, WTI) rising 0.47% to $84.13.
(Written by Corentin Chappron, edited by Kate Entringer)