Paris (awp/afp) – The stock markets were nervously awaiting the decisions of the American central bank (Federal Reserve, Fed) on its rates on Wednesday, fearing that it would be more aggressive than expected.
Wall Street was trending lower and lower. Around 4:10 p.m. GMT, the S&P 500 lost 0.29%, the Nasdaq 1.01%, while the Dow Jones was almost stable (-0.06%).
European markets closed down: Paris lost 1.24%, Milan 1.40%, London 0.90% and Frankfurt 0.49%. In Zurich, the SMI lost 1.01%.
The expected event of the day is the end of the Fed meeting, with the announcement of the institution’s next measures and the press conference of its chairman Jerome Powell, after the close of European markets.
Barring an about-face, the Fed will raise its key rates to control soaring inflation in the United States, a delicate battle with the country’s risk of recession.
“The 0.50 point rise seems certain, but there is still a bit of an unknown and a 0.75 point rise cannot be completely ruled out,” said Alexandre Neuvy, director of private management at Amplegest. , to explain the prevailing nervousness, especially on the bond market.
Sovereign interest rates continued to rise, especially for European states, while the US 10-year yield returned to around 3%, a historically high level.
“The big unknown at this point is whether the Fed boss will be supportive of a 75 basis point rate hike as early as June, which is almost fully priced in by the fed funds futures market already,” commented Patrick O’Hare of Briefing.
The indications on the sales of assets held by the Fed, and thus the reduction of its balance sheet, will also be scrutinized.
Economists are wondering about the impacts of these measures, while growth is already showing signs of weakness, with health confinements in China and the war in Ukraine still weighing on the global outlook.
In the United States, private sector companies added 247,000 jobs in April, a figure well below analysts’ expectations, “a sign that people are still reluctant to return to the labor market”, according to Michael Hewson, analyst at CMC Markets.
Oil rises with the threat of a European embargo ___
Crude prices were up sharply, driven by the European Commission’s proposal for a gradual embargo on Russian oil. Commercial crude oil reserves in the United States increased by 1.3 million barrels, well above forecasts.
Around 4:05 p.m. GMT, a barrel of Brent from the North Sea for July delivery took 3.43% to 108.56 dollars. US WTI for June delivery rose 3.73% to $106.23.
Just Eat in bad shape ___
Just Eat shares fell 9.32% in Amsterdam. The Chairman of the Supervisory Board has decided not to stand for re-election. In addition, the company announced the launch of an internal investigation against its chief operating officer regarding possible misconduct at a professional event.
Maersk, Fresenius and Flutter hailed ___
Maersk (+3.60%), Fresenius (+3.14%) and Flutter (+5.14%) jumped after the release of strong quarterly results.
Aston Martin gained 6.74% after announcing the departure of chief executive Tobias Moers, replaced by former Ferrari boss Amedeo Felisa after a steep first-quarter loss.
Conversely, British online clothing retailer Boohoo plunged 12.40% after falling slightly into the red for its 2021/2022 financial year, undermined by cost inflation.
In addition, the chemical giant BASF (+3.23%) did not comment on the rumours, reported by Bloomberg, according to which it would seek to sell its energy assets in Russia.
On the euro and bitcoin side ___
The euro took 0.15% against the dollar, to 1.0538 dollar.
Bitcoin took 2.88% to 38,880 dollars.
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