Paris (awp / afp) – Western markets remained on edge on Tuesday at the start of a meeting of the US Federal Reserve, in an economic and geopolitical environment not conducive to risk taking.
Wall Street plunged back into early trading, with the Dow Jones losing 1.92%, the S&P 500 2.35% and the Nasdaq 2.71% around 3:00 p.m. GMT, after Monday’s crazy session, finally concluded in the green despite a fall by at least 3% during the session for its three indices: an hour before the close, they had turned around, bouncing for a brief hunt for bargains, the Dow Jones ending Monday at +0.29% the Nasdaq at +0.63% and the S&P 500 at +0.28%.
On Tuesday, the European indices rebounded humbly, losing their little vigor after the American opening: Paris only recovered 0.23%, London +0.68%, Frankfurt +0.56% and Milan +0.28%. In Zurich, the SMI gained 0.32%.
Illustration of the nervousness of market players, the VIX volatility index rose to its levels of autumn 2020 (38/39).
The tension is palpable as the monetary committee of the American central bank (Fed) began its meeting on Tuesday morning, which will end on Wednesday noon.
The Federal Reserve paved the way for raising its key interest rates from the first half of 2022, in response to inflation and its effects on wages.
Markets are also anxiously awaiting how many hikes are planned for the coming months and how far the monetary committee plans to hike rates.
“But it’s not just the Fed, of course,” said Oanda analyst Craig Erlam.
Geopolitical threat, health crisis, less favorable outlook in China and costs for companies faced with inflation and supply problems, the risks for the markets are adding up at the start of the year.
Thus, the IMF on Tuesday lowered its forecast for global growth to 4.4%, against 4.9% previously.
Investors are also awaiting the publication of the results of several technological giants this week, including Microsoft (Tuesday), Tesla (Wednesday) and Apple (Thursday) after mishaps by certain American banks and Netflix, as well as the publication of growth. US for the 4th quarter of 2022.
“The disappointing start to the season hasn’t helped lift morale” and without improvement “the January blues could turn into something much more worrying,” Erlam said.
The American defense group Lockheed Martin, which unveiled better-than-expected financial results on Tuesday, took 2% while 3M, which notably produces scotch tape, post-its and respiratory protection masks, lost nearly 1% after its results around 2:40 p.m. GMT.
Earnings warning for Credit Suisse ___
Credit Suisse, the number two in the Swiss banking sector, issued a warning on its fourth quarter results on Tuesday due to litigation provisions of 500 million Swiss francs (482 million euros). Around 2:50 p.m. GMT, the stock lost 1.81% to 8.13 Swiss francs. The day before, the title had lost 6.8% in the market correction movement.
Ericsson better than expected ___
The Swedish telecoms equipment giant Ericsson (+7.57% to 108.08 Swedish kronor) announced on Tuesday a sharp increase in net profit in 2021, with a fourth quarter well above expectations.
Swatch at earnings time ___
The Swiss watchmaker Swatch Group (-2.66% to 282.30 Swiss francs) returned to profit in 2021 and reported a strong rebound in turnover, driven by China and the United States. United, while remaining below its pre-pandemic level.
On the side of oil, euro and bitcoin ___
Oil prices rose again on Tuesday, boosted by geopolitical tensions between Ukraine and Russia, after losing some of their gains the day before, weighed down by risk aversion.
Around 2:40 p.m. GMT, the price of a barrel of Brent from the North Sea for delivery in March rose by 0.87% to 87.02 dollars.
In New York, a barrel of West Texas Intermediate (WTI) for delivery the same month gained 0.70% to 83.90 dollars.
The euro traded for 1.1279 dollars (-0.41%).
Bitcoin still yielded 0.78% to 36,520 dollars.
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