Renewed anxiety on the markets


Paris (awp/afp) – The markets endured renewed anxiety on Friday in the face of disappointing indicators, diversely received bank results and the prospect of monetary tightening in the United States.

Wall Street continued its decline from the day before: the Dow Jones yielded 0.78%, and the broader S&P 500 index dropped 0.62%. The Nasdaq index, with a strong technological composition, was moving close to equilibrium (-0.06%) around 5:35 p.m. GMT.

In Europe, Frankfurt lost 0.93%, Paris -0.81%, London -0.28% and Milan -1.08%. In Zurich, the SMI dropped 0.75%.

The market is weighed down by a “renewed tension on just about all fronts, starting with that of interest rates and the American Federal Reserve which is chasing after inflation”, Lionel Melka, director of research at Homa, told AFP. Capital.

The statements of the future vice-president of the American central bank (Fed), Lael Brainard, on Thursday woke up the markets on the determination of the institution to fight against inflation.

Investors understood that an initial monetary tightening would potentially take place as early as March in the United States and that others would follow.

The pressure on the Fed will remain strong as the US midterm legislative elections approach.

Continued high inflation rates could imply even larger rate hikes than the three or four currently anticipated by market operators.

The rise in prices should slow in the United States in 2022, after having reached its highest level since 1982 last year, to fall back to around 2.5%, however estimated Friday John Williams, president of the Fed of New York. York.

A sign that the market is assimilating the process of normalization of the Fed’s monetary policy, the interest rate on the US 10-year debt stretched to 1.76% after a sharp easing the day before having taken it to 1, 69%.

For its part, the European Central Bank expects to see the high inflation of recent months, strongly driven by energy, lose force during 2022, its president Christine Lagarde said on Friday.

In terms of economic statistics, the session was disappointing with retail sales in the United States which fell sharply in December compared to November, whereas they were expected to be stable.

Furthermore, consumer confidence deteriorated slightly in January.

The week was marked by sector rotation, with an interest in cyclical and discounted stocks, compared to growth and technology stocks.

Vulnerable tech and luxury ___

Technology sector stocks showed their vulnerability to expectations of higher interest rates, such as Worldline (-3.95%) and Teleperformance (-1.83%) in Paris but also Infineon (-2.01%) in Frankfurt.

Growth stocks like L’Oréal (-2.42%), Hermès (-2.29%), Kering (-2.97%), LVMH (-2.1%) suffered.

Contrasting US Banks ___

JPMorgan Chase slipped (-5.4% to 159.15 dollars) was tackled for having published a quarterly turnover below expectations.

Also sanctioned, Citigroup (-2.32% to 66.22 dollars), which nevertheless did better than expected on both its turnover and its profit.

Conversely, Wells Fargo, whose turnover increased by 6% to 78.5 billion dollars in 2021, climbed 3% at mid-session.

On the side of oil, euro and bitcoin ___

Oil prices rebounded on Friday and reached their highest levels in more than two months. The barrel of Brent from the North Sea for delivery in March, the most traded contract in London, took 1.12% to 85.42 dollars, around 5:30 p.m. GMT.

As for the barrel of West Texas Intermediate (WTI) for delivery in February, it rose 1.28% to 83.17 dollars.

The European currency yielded 0.42% to 1.1408 dollars around 5.30 p.m. GMT, after having earlier reached 1.1483 dollars for one euro, a peak since mid-November.

Bitcoin took 0.58% to 43,068 dollars, after losing 2.2% the day before.

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