by Claude Chendjou
PARIS (Reuters) – Stocks in Europe ended lower on Monday and Wall Street fell red in late morning New York amid renewed risk aversion linked to the resurgence of COVID-19 cases in China, causing the dollar to rise and oil to fall.
In Paris, the CAC 40 ended down 0.15% at 6,634.45 points. The British Footsie lost 0.12% and the German Dax lost 0.36%.
The EuroStoxx 50 index fell 0.4%, the FTSEurofirst 300 and the Stoxx 600 both fell 0.06%.
Equity markets, which had seen an upturn on Friday amid ebbing fears about rates, fell again pending Wednesday’s minutes of the last monetary policy meeting of the US Federal Reserve (Fed) and Thursday that of the European Central Bank (ECB), in the absence of major economic indicators during this session.
Caution was also fueled by the resurgence of the COVID-19 epidemic in China, with 26,824 new local cases recorded on Sunday, a level close to the pandemic peak of last April. This led the authorities to close schools in Beijing and to decree new confinements, in particular in Guangzhou, where nearly 19 million inhabitants reside.
These announcements have dampened hopes of an acceleration of the recent easing of the “zero-COVID” policy in China and raise fears of an impact on demand and production as the monthly “flash” PMI indices will be published on Wednesday in Europe. .
“Markets are moving into safe-haven assets due to COVID-related restrictions in China. We see healthcare and utilities rising while more China-sensitive stocks are sold off,” notes Patrick Armstrong. , Chief Investment Officer at Plurimi Wealth.
VALUES IN EUROPE
In Europe, sectors exposed to China such as basic resources (-1.56%), energy (-2.78%), transport and leisure (-0.58%) and the goods compartment and industrial services (-0.24%) were among the largest declines. Conversely, the defensive healthcare sector (+1.01%) posted one of the best performances.
In London, the mining groups Anglo American, Glencore and Rio Tinto fell from 1.76% to 2.32%, while in Paris Eramet, ArcelorMittal and Vallourec lost 0.7% to 12.83%, despite the latter’s confirmation of its outlook for this year.
Compass, for its part, fell by 1.43%, the world number one in collective catering having announced that it expects an operating margin for 2023 below market expectations.
Virgin Money soared 14.93% after a 43% jump in annual profit.
AT WALL STREET
At the time of the close in Europe, the Dow Jones retreated by 0.29%, the Standard & Poor’s 500 by 0.55% and the Nasdaq by 0.99%, the indices being weighed down by the fall in oil and the evolution unfavorable from the COVID-19 pandemic in China.
The energy compartment fell 4.23% to its lowest level in four weeks as the barrel of Brent yielded more than 5%, in reaction to a Wall Street Journal article according to which, under pressure from Washington , Saudi Arabia and other oil-producing nations are discussing an increase of up to 500,000 barrels per day in OPEC+ production.
Stocks exposed to China such as casino operators Wynn Resorts, Las Vegas Sands and MGM Resorts, and Chinese technology groups listed in New York such as Alibaba, Pinduoduo and JD.com are in the red.
On the rise, Walt Disney jumped 6.51% following the announcement of the return of its former general manager, Bob Iger, and the resignation of Bob Chapek, who succeeded him at the head of the group in February 2020 .
THE INDICATORS OF THE DAY
Producer prices in Germany fell in October for the first time in two and a half years, by 4.2% month on month after a 2.3% gain in September, mainly thanks to the slowdown in energy prices .
CHANGES
On the foreign exchange market, renewed risk aversion benefited the dollar, which gained 0.87% against a basket of benchmark currencies.
“All eyes are on China today and its zero-COVID policy. Traders fear that China will expand its restrictions, which could slow growth,” said John Doyle of Monex USA.
The euro, down 0.85%, is trading at $1.0236, while the pound is trading at $1.1792, down 0.78%.
RATE
Bond yields in Europe ended lower on fears about the future economic outlook and the prospect of a lull in interest rates. Philip Lane, the ECB’s chief economist, said the case for a 75 basis point rate hike from the Frankfurt institute had waned.
The ten-year German Bund yield lost about four basis points to 1.98% and the two-year German Bund yield fell nearly two points to 2.08%.
In the United States, the yield on Treasury bills fell by three points to 3.78% for the ten-year, while the two-year was stable at 4.52%.
OIL
Oil prices widen their losses after reports from the Wall Street Journal of a possible OPEC+ production hike added to concerns about Chinese demand.
At the close of trading in Europe, Brent fell 5.28% to 82.99 dollars a barrel after losing up to five dollars in session, the lowest since early January. American light crude (West Texas Intermediate, WTI) fell 5.43% to 75.73 dollars a barrel.
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 1710.49 -1.00 -0.06% -9.51%
Eurostoxx 50 3909.28 -15.56 -0.40% -9.05%
CAC 40 6634.45 -10.01 -0.15% -7.25%
Dax 30 14,379.93 -51.93 -0.36% -9.47%
FTSE 7376.85 -8.67 -0.12% -0.10%
SMI 11085.04 +39.55 +0.36% -13.91%
The values to follow
Paris and Europe:
[WATCH/LFR]
THE TREND TO
WALL STREET
Indices Last Var. Var. %YTD
Points
Dow Jones 33642.93 -102.76 -0.30% -7.42%
S&P 500 3943.85 -21.49 -0.54% -17.25%
Nasdaq 11032.27 -113.79 -1.02% -29.48%
Nasdaq 100 11563.22 -113.79 -0.97% -29.15%
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 1.0234 1.0324 -0.87% -9.98%
DLR/Yen 141.95 140.35 +1.14% +23.37%
Euro/Yen 145.32 144.92 +0.28% +11.51%
Dlr/CHF 0.9585 0.9546 +0.41% +5.08%
Euro/CHF 0.9811 0.9855 -0.45% -5.38%
Stg/Dlr 1.1784 1.1884 -0.84% -12.90%
Index $ 107.8890 106.9300 +0.90% +12.18%
GOLD
Var. %YTD
Gold Spot 1734.65 1749.74 -0.86% +14.35%
RATE
Last Var. Spread/Bund
(pts)
Future Bunds 140.33 +0.15
10-year Bunds 1.99 +0.01
Bund 2 years 2.09 +0.01
10-year OATs 2.47 +0.01 +47.40
10-year Treasury 3.81 -0.01
Treasury 2 years 4.53 +0.02
OIL
Previous Price Var. Var.% YTD
US light crude 75.92 80.08 -4.16 -5.19% +24.03%
Brent 83.14 87.62 -4.48 -5.11% +25.91%
(Written by Claude Chendjou, edited by Marc Angrand)
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