by Claude Chendjou
PARIS (Reuters) – European stock markets ended in the green on Wednesday for the third session in a row and Wall Street was also up at the end of the morning in New York despite mixed indicators on manufacturing activity and job offers as investors now await the minutes of the last US Federal Reserve (Fed) meeting.
In Paris, the CAC 40 ended with a gain of 2.3% to 6,776.43 points. The British Footsie advanced 0.41% and the German Dax 2.18%.
The EuroStoxx 50 index rose 2.36%, the FTSEurofirst 300 1.4% and the Stoxx 600 1.38%.
The equity markets in Europe were driven by the inflation figures in France (+6.7% in December after +7.1% the previous month) which confirm after those of Germany that the rise in prices in the euro zone seems to be leveling off, which could encourage the European Central Bank (ECB) to moderate the rise in its interest rates.
The recovery of activity in the private sector in the euro zone, with a composite PMI index at 49.3 in December after 47.8 in November, according to the final results of S&P Global, also contributed to the good performance of the financial markets. .
In the United States, the ISM manufacturing index, on the other hand, fell to 48.4 last month after 49.0 in November against a consensus of 48.5, according to the monthly survey of the Institute for Supply Management (ISM). .
The US Department of Labor’s monthly “Jolts” (Job Openings and Labor Turnover Survey) also suggests that the labor market remains tight. At the end of November, 10.458 million jobs were to be filled in the United States, against ten million forecast by the Reuters consensus.
This situation, which could lead the Fed to maintain its high rates for an extended period, especially since the President of the Fed of Minneapolis, Neel Kashkari, estimated on Wednesday that the American central bank should continue to raise the cost of credit, at the minus up to 5.4% against 4.25%-4.50% currently.
Investors are now waiting at 19:00 GMT for the minutes of the Fed’s December monetary policy meeting in which they hope to pick up on the future path of interest rates and the evolution of economic conditions.
VALUES
Among the major compartments of the European listing, distribution (+3.25%), new technologies (+2.72%), banks (+2.49%), insurance (+2.33%) and luxury stocks like LVMH (+5.0%) and Richemont (+2.4%) were sought after.
Conversely, energy (-3.08%) suffered from the decline in oil prices, following concerns about demand, particularly from China.
TotalEnergies dropped 2.34%, BP 3.62% and Shell 3.46%.
AT WALL STREET
At the close in Europe, the Dow Jones advanced 0.71%, the Standard & Poor’s 500 1.14% and the Nasdaq 1.04% in a context of renewed risk appetite in the aftermath of the drop in the first session of the year.
The trend before the Fed’s “minutes” is supported by cheap buying, especially in technology stocks, and the hope of a recovery in the Chinese economy despite the resurgence of the COVID-19 epidemic .
Apple rebounded 2.39% as JP Morgan hinted that demand for iPhones remains strong. Microsoft, on the other hand, fell 4.63% after UBS’s rating was downgraded to “neutral”.
Salesforce is up 3.15% after announcing plans on Wednesday to cut about 10% of its global workforce and close offices.
RATE
Eurozone bond yields fell sharply after inflation figures in several countries in the bloc await Friday price data from the whole of the eurozone.
The ten-year German Bund yield lost about ten basis points, to 2.27%, and the two-year yield, more than eight points, to 2.58%.
In the United States, the yield on ten-year Treasuries fell by 8.5 points, to 3.70%, and that of two years fell by 5.2 points, to 4.35%, in a context of renewed risk appetite.
CHANGES
The dollar fell 0.39% against a basket of benchmark currencies, the euro rising to $1.0617 (+0.67%) thanks to the recovery in PMIs in the currency bloc which outweighed the slowdown in inflation.
OIL
Concerns about demand from China, faced with the COVID-19 epidemic, are weighing on oil prices: Brent fell 4.56% to $78.36 a barrel and US light crude (West Texas Intermediate, WTI) lost 4.55% to $73.43.
(Written by Claude Chendjou, edited by Jean-Stéphane Brosse)
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