by Claude Chendjou
PARIS (Reuters) – European stocks ended in the red on Monday, while Wall Street moved in disorder at mid-session, as caution dominated trading due to the risks associated with a rapid rise in interest rates, to economic recession and turbulence in the foreign exchange market.
In Paris, the CAC 40 ended down 0.24% at 5,769.39 points. The German Dax fell 0.46%. The British Footsie on the other hand nibbled 0.03%. The Milan Stock Exchange took 0.67% the day after the early legislative elections, won by the alliance of the rights led by Giorgia Meloni.
The EuroStoxx 50 index fell by 0.18%, the FTSEurofirst 300 by 0.29% and the Stoxx 600 by 0.42%.
At the end of another volatile session linked to the publication of several mixed macroeconomic indicators and statements by central bankers subject to various interpretations, the equity markets alternated one foot in the green and another in the red before conclude with a third negative session in a row.
In the bustling foreign exchange market, the pound sterling, which touched $1.0327 in the session, its lowest level since the United Kingdom’s switch to the decimal system in the early 1970s, traders speculated on a possible emergency intervention by the Bank of England (BoE).
The latter declared after the close of European stock exchanges that a full assessment of the impact of the fall of the pound on demand and inflation would be carried out at its next monetary policy meeting.
In Japan, Finance Minister Shunichi Suzuki said on Monday that his country was ready to react again to movements in currency speculation as Japanese authorities intervened last week in the foreign exchange market to support the yen against to the dollar.
The euro, for its part, fell in session to a low of 0.9569 dollars, a new low in twenty years against the American currency, while the dollar advanced by 0.8% against a basket of reference currencies.
VALUES
On the pan-European Stoxx 600, the technology compartment (+1.2%) was among the best progressers, supported by cheap purchases of stocks such as STMicroelectronics (+0.98%).
On the other hand, the real estate sector (-2.4%) showed the biggest drop in the prospect of further interest rate hikes.
The commodities compartment, down 1.03%, and the oil and gas compartment, down 0.39%, suffered from the strength of the dollar and fears of a drop in demand.
The Anglo American and Glencore mining groups respectively lost 2.58% and 1.10% in London, while in Paris ArcelorMittal fell by 0.36%.
AT WALL STREET
At the time of the close in Europe, the Dow Jones, which approached the dreaded “bear market” zone on Friday, fell another 0.56%. The Standard & Poor’s 500 fell Friday to a low since mid-June, yielding 0.46%. The Nasdaq, supported by cheap purchases of technology stocks, advanced 0.06%.
The volatility index, up 4.54% to 31.28 points, is near a three-month high.
At the sectoral level, the consumption compartments of so-called non-essential goods (+0.64%) and that of new technologies (+0.06%) are progressing.
Apple, Microsoft, Amazon and Tesla take 0.95%, 0.69%, 1.81% and 0.98% respectively.
Casino operators Wynn Resorts, Las Vegas Sands and Melco Resorts & Entertainment jumped 12% to 25%, driven by Macao’s announcement of a reopening of the sector to tourists from mainland China.
The Chevron and Exxon Mobil groups fell about 1% as oil prices fell to a low since January.
THE INDICATORS OF THE DAY
The OECD said Monday in its new forecast that developed economies risked a recession due in particular to the war led by Russia in Ukraine, inflation and the energy crisis.
The monthly survey by the Institute for Economic Studies Ifo showed that the business climate in Germany had deteriorated more than expected in September and that the risk of recession was increasingly clear.
RATE
Bond yields continue to rise, driven by expectations of a further rise in rates, despite an increased risk of recession.
The yield of the ten-year German Bund took more than five basis points to 2.092%, after having oscillated in session at 2.132%, the highest since December 2011. That of the two-year rose to 2.031%, the highest since December 2008, before paring its closing gains to 1.943%.
The yield differential (spread) between ten-year German bonds and those of Italy of the same maturity increased to 243.3 points at their highest since July 29, while Christine Lagarde, the President of the Banque European Central, said Monday after the victory of the alliance of the rights in Italy that the ECB was not intended to correct mistakes in domestic policy.
In the United States, ten-year and two-year Treasuries yields trade respectively at 3.8251% and 4.2779%, representing increases of 10.4 and 5.7 points respectively.
OIL
Oil prices, which have fallen to a nine-month low, are being penalized both by the sustained appreciation of the dollar and fears of a drop in global demand.
Brent fell 1.67% to 84.71 dollars a barrel and US light crude (West Texas Intermediate, WTI) fell 1.6% to 77.48 dollars.
TO FOLLOW TUESDAY:
THE MARKET SITUATION:
(Some data may show a slight shift)
THE FENCE IN
EUROPE
Indices Last Var. Var. %YTD
Points
Eurofirst 300 1540.75 -4.46 -0.29% -18.49%
Eurostoxx 50 3342.56 -6.04 -0.18% -22.24%
CAC 40 5769.39 -14.02 -0.24% -19.34%
Dax 30 12,227.92 -56.27 -0.46% -23.02%
FTSE 7020.95 +2.35 +0.03% -4.92%
SMI 10072.62 -65.16 -0.64% -21.77%
The values to follow
Paris and Europe:
[WATCH/LFR]
THE TREND TO
WALL STREET
Indices Last Var. Var. %YTD
Points
Dow Jones 29377.06 -213.35 -0.72% -19.16%
S&P 500 3669.68 -23.55 -0.64% -23.01%
Nasdaq 10855.68 -12.25 -0.11% -30.61%
Nasdaq 100 11305.90 -5.35 -0.05% -30.72%
Minutes of the meeting at
Wall Street: [.NFR]
“The Day Ahead” – Update on the
next session on Wall Street [DAY/US]
CHANGES
Standby Price Var.% YTD
Euro/Dlr 0.9616 0.9690 -0.76% -15.41%
DLR/Yen 144.56 143.32 +0.87% +25.64%
Euro/Yen 139.03 138.95 +0.06% +6.68%
Dlr/CHF 0.9939 0.9819 +1.22% +8.96%
Euro/CHF 0.9559 0.9511 +0.50% -7.81%
Stg/Dlr 1.0663 1.0856 -1.78% -21.18%
Index $ 114.0970 113.1920 +0.80% +18.64%
GOLD
Var. %YTD
Gold Spot 1632.29 1643.09 -0.66% +7.60%
RATE
Last Var. Spread/Bund
(pts)
Future Bunds 138.13 -1.35
10-year Bund 2.10 +0.00
Bund 2 years 1.96 +0.02
10-year OATs 2.74 +0.05 +64.40
10-year Treasury 3.84 +0.14
Treasury 2 years 4.29 +0.08
OIL
Previous Price Var. Var.% YTD
US light crude 77.59 78.74 -1.15 -1.46% +26.76%
Brent 84.86 86.15 -1.29 -1.50% +28.52%
(Written by Claude Chendjou, edited by Tangi Salaün)
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