EUROPEAN SCHOLARSHIPS END ON FALL
by Claude Chendjou
PARIS (Reuters) – European stock markets ended lower Thursday after three consecutive sessions of increases since the start of the year, while on Wall Street the trend was hesitant at mid-session, investors remaining perplexed in the aftermath of the publication of the minutes of the meeting of the US Federal Reserve (Fed), which paves the way for monetary tightening earlier than expected.
In Paris, the CAC 40 lost 1.72% to 7,249.66 points. The British Footsie fell 0.88% and the German Dax fell 1.35%.
The EuroStoxx 50 index fell by 1.53%, the FTSEurofirst 300 by 1.3% and the Stoxx 600 by 1.25%.
Fed officials said at their meeting last month that the US job market was “very tight” and that the central bank may not only have to raise interest rates earlier than expected, but also reduce its balance sheet to control high inflation.
This offensive tone surprised the markets to the point of scaring some investors, notes Carlos de Sousa, manager at Vontobel Asset Management.
To the Fed’s “minutes” are added several mixed indicators published during the day, which reinforce risk aversion as investors watch Friday data on job creation in the non-agricultural sector in the United States in December and statistics on inflation in the euro area in November.
VALUES
In Europe, all sectors of the Stoxx 600 ended up in the red, starting with the technological compartment (-2.36%) which showed the most significant decline, in the perspective of monetary tightening across the Atlantic.
The banking index in Europe, on the other hand, gained 1.12%, benefiting from expectations of at least three rate hikes this year in the United States.
In Paris, Capgemini dropped 4.37% and Dassault Systèmes 3.65%. Crédit Agricole, BNP Paribas and Société Générale gained 1.15%, 1.35% and 1.86%.
Societe Generale also benefited from the announcement of the plan to buy out LeasePlan for 4.9 billion euros by its subsidiary ALD (+ 8.34%).
In distribution, Carrefour, which had already gained more than 5% on Wednesday after an article in Bloomberg according to which Auchan is considering a new offer on the group led by Alexandre Bompard, takes another 6.28%.
On the downside, Coface fell 10.29% after Natixis left its capital.
In the automotive industry, Stellantis, which announced Thursday the cessation of heat engines on Citroën Berlingo and SpaceTourer, dropped nearly 1%.
Airbus for its part ended up down 1.46%, the airline Qatar Airways claiming from the aircraft manufacturer compensation of $ 618 million (546 million euros) for problems on its A350, according to a document consulted by Reuters.
A WALL STREET
At close in Europe, the Dow Jones is down 0.28%, the Standard & Poor’s 500 is gaining 0.1% and the Nasdaq is up 0.4%
Securities sensitive to changes in rates such as technologies, which had particularly suffered on Wednesday to the point that the Nasdaq had lost more than 3%, its largest drop in one session since February 2021, are generally stable.
Netflix, however, drops 1.77% after the lowering of the group’s price target by JP Morgan, the intermediary expecting a medium-term decline in the number of subscribers to the platform.
On the upside, the financial (+ 0.73%) and banking (+ 1.40%) compartment is sought after, in anticipation of at least three rate hikes of a quarter of a point this year. Energy values (+ 1.89%) also rose, like Occidental Petroleum, which gained 1.7%, in the wake of the continued rise in oil prices.
TODAY’S INDICATORS
In the indicators published in Europe, the consumer price index calculated according to European standards (HICP) in Germany shows that inflation slowed down over one year in December (+ 5.7% after + 6.0% in November ) for the first time since June, even though it is still above the European Central Bank’s 2% target.
Orders to industry across the Rhine also posted a stronger-than-expected rebound in November despite bottlenecks.
On the services side, the growth of activity in the tertiary sector in Great Britain, on the other hand, reached its weakest pace in ten months in December, according to the final results of the monthly IHS Markit survey of directors of purchases.
In the United States, the growth of activity in the service sector slowed more than expected in December, probably due to the resurgence of the COVID-19 epidemic, shows the monthly survey of the Institute for Supply Management (ISM) released Thursday.
Unemployment claims in the United States last week also increased more than expected, to 207,000, according to the Department of Labor.
CHANGES
At exchange rates, the dollar is stable (0.04%) against a basket of benchmark currencies, regaining its breath after a 14-month peak while at the same time the support obtained following the publication of the minutes of the meeting of the Fed is shrinking. The greenback however gained 0.3% against the yen.
The euro, for its part, fell slightly, by 0.11%, to 1.1301 dollars.
Among cryptocurrencies, bitcoin, down 1.21% to less than $ 43,000, suffers from risk aversion.
RATE
On the bond market, the yield on ten-year Treasury bills appreciated by nearly three basis points to 1.7299%, to a nine-month peak, thanks to the Fed’s “minutes”, which pave the way for faster-than-expected interest rate hikes this year.
In Europe, yields are also trending upward as euro area money markets now factor in at 100% the probability of a European Central Bank rate hike in October, taking into account the change in tone of the euro area. Fed.
The ten-year German Bund yield ended with a gain of 1.7 points at -0.068% and its French equivalent of the same maturity at 0.256%, an increase of 2.3 points.
OIL
On the oil market, the rise in crude prices is not weakening. Black gold is driven, among other things, by the prospect of sustained global demand this year, supply problems in Libya and tensions in Kazakhstan.
The barrel of Brent takes 2.02% to 82.38 dollars and that of US light crude 2.56% to 79.8 dollars.
(Report Claude Chendjou, edited by Sophie Louet)