by Claude Chendjou
PARIS (Reuters) – European stocks ended lower on Thursday and Wall Street traded in the red mid-session, while the dollar and bond yields rallied amid concerns over weaker economic conditions and tightening. monetary central banks.
In Paris, the CAC 40 ended down 0.47% at 6,576.12 points. The British Footsie lost 0.06%. The German Dax, on the other hand, rose by 0.23%, driven by Siemens.
The EuroStoxx 50 index fell by 0.11%, the FTSEurofirst 300 by 0.4% and the Stoxx 600 by 0.42%.
St. Louis Federal Reserve Chairman James Bullard said on Thursday that rate hikes in the United States had only a limited effect on inflation so far that the U.S. central bank would have to raise the cost credit of at least 100 additional basis points.
JPMorgan economists also expect the Fed to raise rates by 100 basis points by March and believe that the US economy could experience a “mild recession” in the second half of 2023.
Traders now price an 89% chance of a 50 basis point Fed rate hike in December and see rates peaking around 5% in June 2023.
In the United Kingdom, where inflation now exceeds 11%, the Minister of Finance, Jeremy Hunt, unveiled an austerity plan providing for tax increases and increased control of public spending. He explained that the country was already in recession and the economy was expected to contract by 1.4% next year.
VALUES IN EUROPE
On a sector level in Europe, almost all of the Stoxx 600 compartments ended in the red or with very small gains, with basic resources posting the largest decline (-1.68%) on fears of a recession.
In terms of business results, Bouygues plunged 6.50% after giving up its 2023 margin target for its subsidiary Colas in a context of cost uncertainties.
Siemens jumped 6.98% after announcing a better-than-expected quarterly profit and presenting a plan to consolidate five of its businesses into a separate entity.
Burberry’s better-than-expected quarterly sales were also welcomed, while Dutch insurer NN Group’s 2025 outlook (-4.06%) disappointed.
Thyssenkrupp fell 2.11% as the German group warned that its profit and sales would decline significantly in 2023.
AT WALL STREET
At the time of the close in Europe, the Dow Jones was practically stable but the Standard & Poor’s 500 fell by 0.47% and the Nasdaq by 0.36%.
The main sectors of the S&P-500 were down, with retail and consumer losing 1.13% and 1.15% respectively in the wake of Target’s Christmas sales warning on Wednesday and Kohl’s decision to withdraw. to its forecast for this year.
Chinese e-commerce giant Alibaba for its part dropped 8.13% after the publication of quarterly sales below expectations. Macy’s, against the trend, jumped 12.48%, the chain of department stores having mentioned the resistance of demand for high-end products and raised its forecast for annual profit.
In semiconductors, Nvidia fell 0.2% despite better-than-expected quarterly sales, affected by the warning on Wednesday from Micron Technology (-1.002%) which continues to weigh on the sector.
The results and forecasts of Cisco Systems are on the other hand welcomed, allowing the action to gain 3.80%.
THE INDICATORS OF THE DAY
In the United States, jobless claims fell last week, to 222,000 against 226,000 (revised) the previous week and a consensus of 225,000.
In the Philadelphia region, business conditions unexpectedly deteriorated in November with a “Philly Fed” index at -19.4 after -8.7 in October.
CHANGES
The dollar, which had recently lost ground on hopes of a lull in Fed rates, rose 0.76% against a basket of benchmark currencies, supported by statements deemed restrictive by several bank officials Central American.
The euro, down 0.45%, is trading at 1.0345 dollars.
The pound sterling fell 0.76% to 1.1817 dollars.
RATE
Bond yields in Europe ended up, supported by expectations of higher rates in the United States, despite statements by two European Central Bank (ECB) officials, Robert Holzmann and Pablo Hernandez de Cos, in favor of a increased caution in the Frankfurt institution’s monetary tightening.
The ten-year German Bund yield closed at 2.02% (+1.7 points), that of British bonds of the same maturity rose 5.6 basis points to 3.19%, while the Treasuries rate at ten years advanced by 7.4 points to 3.76%.
OIL
The easing of geopolitical tensions and fears over Chinese demand for crude oil in the context of the resurgence of the COVID-19 epidemic in the country are weighing on oil prices.
Brent fell 3.1% to $89.98 a barrel and US light crude (West Texas Intermediate, WTI) 4.28% to $81.93 a barrel.
(Written by Claude Chendjou, edited by Marc Angrand)
Copyright © 2022 Thomson Reuters