by Claude Chendjou
PARIS (Reuters) – European stock markets ended lower on Wednesday and Wall Street was also in the red at mid-session, the markets continuing to opt for caution at the start of the year after the rally recorded at the end of 2023 awaiting new indicators on the trajectory of interest rates and the economy.
In Paris, the CAC 40 ended down 1.58% to 7,411.86 points with a drop in LVMH (-3.81%), Kering (-3.02%) and Hermès (-1.90%). . The British Footsie lost 0.51% and the German Dax lost 1.38%.
The EuroStoxx 50 index fell by 1.43%, the FTSEurofirst 300 by 0.79% and the Stoxx 600 by 0.86%.
This last index, which jumped 12.7% over the whole of 2023, thus records its second consecutive session of decline since the start of 2024, falling to a three-week low, under the influence of the decline in the resources compartment basic (-2.18%), finance (-2.43%), technology (-1.91%) and luxury values (-2.65%).
Many analysts predict a rate cut from the European Central Bank (ECB), the Bank of England (BoE) and the US Federal Reserve (Fed) this year, with a first reduction as early as October. If this hypothesis is not called into question for the moment, they hope that the data on American employment and inflation in the euro zone, forecast for Friday, will reinforce this hope, while the report will be published this Wednesday at 7:00 p.m. GMT from the last Fed meeting.
“If something happens that is not in the scenario, then there may be a risk of disappointment (…),” underlines Russ Mould, investment director at AJ Bell.
“Markets are just catching their breath now, waiting for some degree of confirmation, and there is no major news at the moment,” he adds.
VALUES IN EUROPE
Alstom, the largest decliner in the CAC 40, ended down 9.90% after a suspension of the stock in the wake of Barclays’ decision to maintain its recommendation on the industrialist to be “underweight” with a reduced price target. at 8 euros.
Atos fell 5.75% after gaining up to 12% at the very start of the session following the announcement of discussions with Airbus (-2.92%) for the purchase of its BDS (Big data & security).
Ryanair dropped 4.92%, the group having warned that certain online travel agencies had stopped offering its flights for sale.
ASML fell by 2.85%, continuing to suffer from the partial revocation of an export license to China.
Maersk rose 5.11% thanks to the increase in Goldman Sachs’ recommendation to “neutral” from “sell”.
A WALL STREET
At the close in Europe, the Dow Jones fell by 0.62%, the Standard & Poor’s 500 by 0.67% and the Nasdaq by 0.95%.
“The decline yesterday, today and perhaps the next few weeks is because people are taking profits and re-evaluating assumptions about the pace of rate declines discussed at the end of last year,” says Ken Polcari, managing partner at Kace Capital Advisors.
The technology groups Nvidia, Apple and Tesla fell from 0.86% to 3.28% in the wake of the rise in sovereign yields in the United States.
TODAY’S INDICATORS
Manufacturing activity in the United States recovered more than expected in December while remaining in contraction territory, with an ISM index at 47.4.
The number of job openings in the United States fell slightly in November, a sign of a labor market that is slowing with the Fed’s massive interest rate hike, shows the latest “Jolts” report (Job Openings and Labor Turnover Survey) from the Department of Labor released Wednesday.
The number of unemployed in Germany increased slightly in December, by 5,000 seasonally adjusted to reach 2.703 million, show figures from the Employment Office, which show an unemployment rate of 5.9%.
CHANGES
The dollar gained 0.38% against a basket of reference currencies after an increase of 0.86% on Tuesday pending new indicators in the United States. The greenback is at a two-week high
The euro fell 0.39% to 1.0904 dollars, its lowest level since December. The day before, the single European currency suffered its biggest drop in one session (-0.95%) since July.
The pound sterling gained 0.18% to $1.2637.
RATE
Tensions on the bond market continue, notably with the yield on the American ten-year bond which has crossed the 4% mark.
In Europe, the yield on the ten-year German Bund ended down almost five points, at 2.024% in a volatile session where it climbed to 2.105%.
OIL
The oil market rose on Wednesday as a disruption at the main oil field in Libya reinforced fears that tensions in the Middle East could reduce crude supplies around the world.
Brent rose 2.69% to $77.93 per barrel and American light crude (West Texas Intermediate, WTI) rose 2.91% to $72.43.
(Written by Claude Chendjou, edited by Jean Terzian)
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