by Claude Chendjou
PARIS (Reuters) – The main European stock markets, except Frankfurt, ended in the red on Thursday, while Wall Street evolved slightly in the green at the midpoint, the session having been hesitant after mixed macroeconomic indicators.
In Paris, the CAC 40 ended down 0.65% at 7,316.7 points. The British Footsie lost 0.46%. The German Dax, supported in particular by real estate and the Vonovia group (+5.14%) stood out from other European markets with a gain of 0.35%.
The EuroStoxx 50 index fell by 0.42%, the FTSEurofirst 300 by 0.26% and the Stoxx 600 by 0.2%.
Over the whole month, the Parisian CAC 40 lost 2.41% and the pan-European Stoxx 600 index 2.79%.
A slew of contrasting macro data was released during the session, prompting investors to be cautious after several sessions of rising indices.
While the PCE consumer price figures in the United States (+0.2% in July and +3.3% year on year) came out broadly identical to last month and in line with expectations, the strength of consumer spending ( +0.8%) surprised on the other hand, creating volatility on the equity markets.
“There is a lot of data still to come (but) it is very likely that the Fed will not move (its rates) in November and that we are done with rate hikes”, estimates however Tony Roth, director of the investments at Wilmington Trust.
In the euro zone, where inflation figures were also published, stabilization was observed in August, with an index up 5.3% over one year, as in July. Economists polled by Reuters, however, expected inflation to decelerate to 5.1%.
After the release of this data, the probability of a rate hike by the European Central Bank (ECB) in September fell from 50% to less than 30%.
VALUES IN EUROPE
The hope of a lull in interest rates supported the real estate index which gained 1.64%, the best sector performance of the Stoxx 600.
The finance compartment (+1.52%) was driven by UBS (+6.05%), which said it anticipated 10 billion dollars in savings with the absorption of the Swiss branch of Credit Suisse.
On the downside, Pernod Ricard (-6.74%) weighed on the luxury compartment by declaring that it expected lower sales in China: LVMH, Hermès, Kering and L’Oréal fell from 0.82% to 2.71% .
AT WALL STREET
At the time of closing in Europe, the Dow Jones grabbed 0.06%, the Standard & Poor’s 500 0.21% and the Nasdaq 0.43%.
Among the 11 major sectors of the S&P 500, new technologies (0.53%) lead the way. Salesforce gained 3.35% as its revenue forecast for the current quarter was raised.
THE INDICATORS OF THE DAY
Jobless claims fell in the United States last week, to 228,000, but the number of people regularly receiving benefits increased, to 1.725 million in the week to August 19.
Retail sales in Germany unexpectedly fell in July, by 0.8%, compared to the previous month.
CHANGES
The dollar strengthened (+0.53%) against a basket of benchmark currencies after mixed US indicators. Currency traders also remain cautious before the official monthly employment figures in the United States.
The euro is trading at 1.0842 dollars, down 0.75% after the inflation figures in the community bloc.
The Chinese yuan strengthened Thursday to 7.2485 against the dollar, its highest level in two and a half weeks, in reaction to the decision of the Chinese central bank to support the struggling real estate sector.
RATE
Bond yields in Europe and the United States fell after the inflation data, with the ten-year German Bund yielding 6.5 basis points to 2.4710%, while its American equivalent of the same maturity dropped a just over two points, to 4.0848%.
OIL
Oil prices benefited from the sharp fall in crude inventories in the United States last week and the drop in production from OPEC + countries: Brent gained 0.91% to 86.64 dollars a barrel and crude American light (West Texas Intermediate, WTI) 0.78% to 82.27 dollars.
TO BE FOLLOWED ON FRIDAY:
US Department of Labor report on job creation, unemployment rate and wages for the month of August.
(Written by Claude Chendjou, edited by Jean-Stéphane Brosse)
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