by Marc Angrand
PARIS (Reuters) – European stock markets ended in the red on Wednesday and on Wall Street, the decline prevailed mid-session pending decisions from the US Federal Reserve, which should accelerate the tightening of its monetary policy in raising its main interest rate by half a point.
In Paris, the CAC 40 lost 1.24% (80.5 points) to 6,395.68 points, its lowest closing level since March 15. In London, the FTSE 100 was down 0.84% and in Frankfurt, the Dax was down 0.49%.
The EuroStoxx 50 index lost 0.96%, the FTSEurofirst 300 1% and the Stoxx 600 1.08%.
On the New York Stock Exchange, at the time of the close in Europe, the Dow Jones fell by 0.27%, the Standard & Poor’s 500 by 0.6% and the Nasdaq Composite by 1.54%.
The Fed is due to announce at 6:00 p.m. GMT the findings of its monetary policy committee and all economists polled by Reuters expect it to raise the federal funds rate target (“fed funds”) by 50 basis points, within a range from 0.75% to 1%, which would be its biggest increase since May 2000.
It could also specify the timing and terms of its balance sheet reduction and its chairman, Jerome Powell, could give clues at his press conference on what the central bank is ready to do to stem rising inflation. at its highest for 40 years.
Faced with the prospect of further rate hikes, 59.4% of investors surveyed by the American Association of Individual Investors believe that stock prices will fall in the next six months, the highest percentage since March 2009.
If the results of companies provide support for the American indices on Wednesday after the well-received publications of Advanced Micro Devices (+1.23%) and Starbucks (+5.95%), this support was less supported in Europe, several companies that have disappointed expectations.
VALUES
In Paris, EDF thus sold 2.47% after being cautious about its earnings outlook and having mentioned an increase in the risks linked to the Hinkley Point project in the United Kingdom.
Danish jeweler Pandora lost 2.1% after highlighting uncertainties surrounding its outlook.
On the rise, the Belgian industrial materials group Umicore jumped 10.35%, the best performance of the Stoxx 600, after reports from Bloomberg on the interest of the South Korean LG Chem in possible acquisitions abroad.
Ubisoft took 8.97% in reaction to a Dealreporter article that the Guillemot family, its largest shareholder, could join forces with a private equity group to launch a bid to prevent a hostile takeover.
THE INDICATORS OF THE DAY
In the United States, the private sector created 247.00 jobs in April according to the monthly ADP survey, a figure below expectations, and the growth of activity in the services sector slowed, the sectoral ISM index returning to 57, 1 after 58.3 in March.
In the euro zone, growth in the private sector accelerated last month according to the final results of the S&P Global surveys: the composite PMI index rose to 55.8 in April from 54.9 in March.
Retail sales in the euro zone also posted a more marked drop than expected in March, by 0.4% over one month.
CHANGES
The dollar, whose fluctuations have eased in recent days after a period of rapid rise, is giving up some ground pending the announcements of the Fed: the index which measures its evolution against a reference basket is down 0 .14%.
The euro, for its part, appreciated by 0.26% to 1.0547 dollars.
The pound sterling is practically stable against the greenback but is down a little against the euro (-0.28%) on the eve of the Bank of England’s (BoE) monetary policy meeting, which should end with another rate hike.
RATE
Headed down after the publication of the monthly ADP survey, the yield on ten-year US Treasury bonds rose again and exceeded the symbolic threshold of 3% for the third consecutive session, a movement favored by Fed expectations.
The two-year, even more sensitive to changes in key rates, is moving to its highest level since December 2018, at 2.8093%.
In Europe, the momentum given by the American market was combined with the effect of declarations by Isabel Schnabel, one of the members of the executive board of the European Central Bank (ECB), in favor of an initial increase in rates from July: the ten-year German yield rose in session to 1.036%, its highest level since 2015, before returning to 0.976%.
OIL
The oil market is benefiting from the announcement by the European Union of its intention to gradually end its imports of Russian crude oil within six months, a factor that takes precedence over fears of a deterioration in Chinese demand.
Brent gained 3.25% to 108.38 dollars a barrel and US light crude (West Texas Intermediate, WTI) 3.41% to 105.90 dollars.
TO BE FOLLOWED ON THURSDAY:
THE MARKET SITUATION:
(Some data may show a slight shift)
THE FENCE IN
EUROPE
Indices Last Var. Var. %YTD
Points
Eurofirst 300 1729.93 -17.44 -1.00% -8.48%
Eurostoxx 50 3724.99 -36.20 -0.96% -13.34
%
CAC 40 6,395.68 -80.50 -1.24% -10.59
%
Dax 30 13,970.8 -68.65 -0.49% -12.05
2%
FTSE 7493.45 -67.88 -0.90% +1.47%
SMI 11880.2 -121.64 -1.01% -7.73%
4
The values to follow in Paris and
in Europe : [WATCH/LFR]
THE TREND TO
WALL STREET
Indices Last Var. Var. %YTD
Points
Dow Jones 33129.1 +0.33 +0.00% -8.83%
2
S&P 500 4163.53 -11.95 -0.29% -12.64
%
Nasdaq 12419.5 -144.22 -1.15% -20.62
3%
Nasdaq 100 12946.6 -143.23 -1.09% -20.67
7%
Minutes of the session on Wall
Street: [.NFR]
“The Day Ahead” – Update on the
next session on Wall Street [DAY/US]
CHANGES
Standby Price Var.% YTD
Euro/Dlr 1.0545 1.0520 +0.24% -7.24%
DLR/Yen 129.97 130.10 -0.10% +12.96
%
Euro/Yen 137.08 136.92 +0.12% +5.19%
DLR/CHF 0.9826 0.9788 +0.39% +7.72%
Euro/CHF 1.0364 1.0295 +0.67% -0.05%
Stg/Dlr 1.2491 1.2498 -0.06% -7.67%
Index $ 103.319 103.465 -0.14% +7.43%
0 0
GOLD
Var. %YTD
Gold Spot 1866.49 1867.79 -0.07% +23.04
%
RATE
Last Var. Spread/Bund
(pts)
Future Bunds 153.25 -0.42
10-year Bunds 0.97 -0.01
2-year Bunds 0.27 -0.01
10-year OATs 1.51 -0.01 +53.20
10-year Treasury 2.97 +0.02
2-year Treasury 2.81 +0.04
OIL
Previous Price Var Var.% YTD
nt
US light crude 105.87 102.41 +3.46 +3.38% +72.96%
Brent 108.36 104.97 +3.39 +3.23% +64.11%
(Written by Marc Angrand, edited by Jean-Michel Bélot)
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