In-article:

Market: Europe ends in the green after the PMIs and before the Fed


by Claude Chendjou

PARIS (Reuters) – European stocks ended slightly higher on Wednesday and Wall Street also rose moderately late in the morning in New York, investors opting for risk taking after mixed data on economic activity in Europe and the United States. United States and before the publication of the minutes of the last monetary policy meeting of the American Federal Reserve (Fed).

In Paris, the CAC 40 ended with a gain of 0.32% to 6,679.09 points. The British Footsie advanced 0.17% and the German Dax nibbled 0.04%.

The EuroStoxx 50 index rose 0.42%, the FTSEurofirst 300 0.63% and the Stoxx 600 0.60%.

The contraction in private sector activity in the euro zone eased slightly in November with a composite “flash” index rising to 47.8, but demand continued to fall, according to the first results of the monthly survey. of S&P Global with purchasing managers.

In Great Britain, the “flash” composite PMI index also rose very slightly, to 48.3 in November after 48.2 in October.

In the United States, on the other hand, the composite PMI fell for the fifth consecutive month, to 46.3 after 48.2 in October, while new orders fell to their lowest level in two and a half years.

Investors are now waiting at 7:00 p.m. GMT for the “minutes” of the November meeting of the Fed, the last indicator of the day after the weekly jobless claims in the United States which rose more than expected (240,000) last week and the surprise rise sales of new homes in October (+7.5% to 632,000 units at an annualized rate).

AT WALL STREET

At the time of the close in Europe, the Dow Jones was unchanged, while the Standard & Poor’s 500 gleaned 0.07% and the Nasdaq rose 0.31%.

The positive trend on Wall Street is driven by growth stocks amid falling bond yields as the market continues to expect a limited 50 basis point rate hike next month and a less restrictive message from the Fed.

“For the most part (investors), they are confident that Fed members are likely to show signs that the pace of rate hikes may slow,” said Brian Klimke, chief investment officer at Cetera Investment Management.

Apple, Microsoft, Amazon and Meta Platforms take 0.4% to 0.7%. Tesla jumped 5.2%, benefiting from the raising of Citigroup’s recommendation from “sell” to “neutral”.

On the downside Nordstrom fell 6.40% as the department store group lowered its annual net profit forecast.

VALUES IN EUROPE

Among the major compartments of the European dimension, basic resources (+1.77%), tourism (+1.87%) and new technologies (+1.26%) posted one of the best progressions.

In individual stocks, Kering gained 0.59% as a source reported that Gucci’s chief creative officer Alessandro Michel was to step down. The group’s flagship brand has seen its growth slow down in recent quarters, its performance in China, a key market for the sector, becoming a source of concern for investors. Credit Suisse lost 6.12% as the Swiss bank forecast a heavy pre-tax loss in the fourth quarter.

Swiss specialty chemist EMS Chemie fell 0.68% after lowering its forecast for the full year.

CHANGES

Mixed economic data, expectations of a lull in interest rates and a return to risky assets weighed on the US dollar, which lost 0.77% against other major currencies.

The euro took the opportunity to rise to 1.0361 dollars (+0.57%), while the pound sterling advanced by 1.27% to 1.2034 dollars.

The New Zealand dollar jumped 1.25% to 0.6218 US dollars, driven by the decision of the New Zealand central bank to raise its rates by 75 basis points to 4.25%.

RATE

Long-term bond yields in Europe ended lower on the prospect of a slower pace of rate hikes after PMI data in Europe and the US showed weakening economic activity overall.

The ten-year German Bund yield fell five basis points to 1.92%, but the two-year yield rose four points to 2.14%, while the spread between these two maturities widened to 21 points. , the most pronounced inversion in 14 years.

The yield on ten-year US Treasury bonds fell by 3.6 points to 3.72% and the two-year one stood at 4.47% (-4.2 points).

OIL

Oil prices are hurt by statements by a European Union diplomat that G7 countries are considering capping the price of Russian oil transported by sea in the range of 65 to 70 dollars a barrel.

Brent fell 4.18% to 84.67 dollars a barrel and US light crude (West Texas Intermediate, WTI) 4.51% to 77.30 dollars a barrel.

TO BE FOLLOWED ON THURSDAY:

Minutes of the October monetary policy meeting of the European Central Bank (ECB).

US markets closed for Thanksgiving.

(Written by Claude Chendjou, edited by Kate Entringer)

Copyright © 2022 Thomson Reuters



Source link -84