Stock market Europe consolidates at the close, Wall Street rebounds mid-session

by Claude Chendjou

PARIS (Reuters) – The main European stock markets ended Tuesday with slight variations, while on Wall Street the trend turned green late morning in New York after statements by Fed officials, including Christopher Waller, who mentioned a possible drop in interest rates in the United States in the coming months.

In Paris, the CAC 40 ended down 0.21% at 7,250.13 points. The British Footsie dropped 0.07%. The German Dax, supported by defensive stocks such as those in community services, gained 0.16%.

The EuroStoxx 50 index fell by 0.15%, while the FTSEurofirst 300 and the Stoxx 600 each lost 0.30% each but their decline was limited by the support of the defensive compartment.

At the close in Europe, the Dow Jones advanced by 0.46%, the Standard & Poor’s 500 by 0.31% and the Nasdaq by 0.33%.

The stock markets, which had been trending in the red since the start of the session, in a consolidation movement after the significant gains recorded this month and before the publication this week of inflation figures in the euro zone and in the United States, attempted a rebound at the end of the session.

Christopher Waller, one of the governors of the American Federal Reserve (Fed), said on Tuesday he was “increasingly confident” that the current level of interest rates of the American central bank will be sufficient to bring back inflation to the 2% target and did not rule out a drop in the cost of credit in the months to come.

These statements pushed down US sovereign yields and the dollar.

In addition to Christopher Waller, other Fed officials such as Austan Goolsbee spoke during the day, the latter estimating that inflation in the United States is on the verge of recording its sharpest decline in 71 years. An intervention from Jerome Powell, the president of the American central bank, is expected on Friday, the day after the publication of the PCE price index in the United States and consumer price statistics in the euro zone.

The Fed, the European Central Bank (ECB) and the Bank of England (BoE) will make their next monetary policy decisions on December 13 and 14.

VALUES IN EUROPE

Atos fell 6.58% as the IT services group announced it was renegotiating its agreement with Daniel Kretinsky on Tech Foundations.

Ubisoft plunged 8.97% in reaction to the announcement of a placement of bonds convertible into shares.

easyJet gained 4% after an annual profit in line with expectations.

Julius Baer, ​​penalized by the lowering of Morgan Stanley’s advice, lost 4.68%.

TODAY’S INDICATORS

Bank lending to euro zone businesses fell in October for the first time since 2015, contracting 0.3% after rising 0.2% in September, according to data released by the ECB.

Consumer confidence in the United States improved significantly in November, shows the Conference Board’s monthly survey.

CHANGES

The dollar (-0.51%) fell on Tuesday to its lowest since August 11 against a basket of reference currencies after statements by Christopher Waller. The index is on track to decline by more than 3% for the month as a whole, the largest since November 2022.

The euro is at 1.1003 dollars (+0.46%) at a high of more than three and a half months, while the pound sterling is trading at 1.2708 dollars (+0.66%), at a peak since September.

RATE

The yield on Treasuries declines to a nearly two-month low after statements by Fed officials.

The ten-year one gives up almost five basis points, to 4.34% and the two-year one gives up nine points, to 4.76%.

In the euro zone, the yields on these two maturities ended respectively at 2.49% (-5.9 points) and 2.91% (-6.7 points).

OIL

The oil market is rising sharply in anticipation of further production cuts by OPEC+ which meets on Thursday.

Brent gained 2.44% to $81.93 per barrel and American light crude (West Texas Intermediate, WTI) gained 2.5% to $76.73.

TO BE CONTINUED ON WEDNESDAY:

(Written by Claude Chendjou, edited by Blandine Hénault)