EUROPEAN STOCK MARKETS END LOWER
by Claude Chendjou
PARIS (Reuters) – European stock markets ended lower on Thursday and Wall Street was also trading in the red mid-session amid risk aversion linked to the publication of PMI surveys in the United States, Europe and China, which reinforce fears of a recession while expectations of interest rate hikes increase.
In Paris, the CAC 40 began the month of September as it had ended that of August, yielding 1.48% to 6,034.31 points. The British Footsie dropped 1.86% and the German Dax 1.6%.
The EuroStoxx 50 index fell by 1.72%, the FTSEurofirst 300 by 1.77% and the Stoxx 600 by 1.8%.
Equity markets, which ended at a low since July, were hurt by manufacturing activity figures in the euro zone and the United Kingdom, which in August posted contractions to 49.6 and 47 respectively. .3, according to the final results of S&P Global’s surveys of purchasing managers.
In the United States, manufacturing activity remained unchanged in August, at 52.8, while in China it fell for the first time in three months, at 49.5, due to the weakening demand as the country persists in its “zero COVID” policy so that the city of Chengdu will confine 21.2 million inhabitants.
“With European surveys offering little hope that the bloc will avoid a recession sometime this year. And that’s before winter even sets in and energy bills soar. The next six months will be long and difficult for Europe and it cannot count on the ECB to bring it any relief, quite the contrary”, summarizes Craig Erlam, market analyst at OANDA.
In fact, the markets are now betting by a very large majority on an increase in the cost of credit by 75 basis points this month in both the euro zone and the United States.
A sign of nervousness, the volatility index rose in the United States to 27.18 points and in Europe, it ended at 29.14 points (+4.29%).
VALUES IN EUROPE
In Europe, all the main compartments of the Stoxx 600 ended in the red, with commodities (-3.81%) and the tourism and leisure sector (-3.77%) posting the largest declines, against a backdrop of fears of a deterioration in the economy.
The mining groups ArcelorMittal, Rio Tinto and Glencore fell from 3.42% to 6.61%, while TotalEnergies, BP and Eni fell from 0.06% to 0.94%.
In luxury, particularly exposed to China, Hermès dropped 2.53%, LVMH 2.27% and Kering 2.15%.
In corporate news, Pernod Ricard rose 0.46% on better-than-expected annual results, while Lufthansa fell 3.13% after announcing the cancellation of 800 flights on Friday. .
British consumer goods group Reckitt Benckiser fell 5.17% on the announcement of the departure at the end of September of its chief executive Laxman Narasimhan.
AT WALL STREET
At the time of the close in Europe, the Dow Jones fell by 0.5%, the Standard & Poor’s 500 by 1.06% and the Nasdaq by 2.14%.
The sector index of technological news and that of semiconductors dropped 2.28% and 4.4% respectively. Washington has asked Nvidia (-11.34%) and Advanced Micro Devices (AMD) (-6.78%) to suspend the sale of some of their chips dedicated to artificial intelligence to China.
Ford drops 2.19% after the announcement of the recall of 198,000 Ford Expedition and Lincoln Navigator vehicles in the United States, while Boeing gives up 5.03%, the aircraft manufacturer having declared to be awaiting certification by the authorities of the 737 MAX 7 by the end of the year and the 737 MAX 10 next year.
Campbell Soup fell 2.99%, penalized by its adjusted profit forecast for 2023, which came out below analysts’ expectations.
In foreign exchange, the dollar, up 0.97% against a basket of benchmark currencies, hit a new 20-year high on Thursday. Against the yen, it hit a high since 1988, at 139.69. The greenback is supported by the prospect of a rapid and lasting rise in interest rates in the United States and its status as a safe haven asset.
The euro, down 1.19% to 0.9937 dollars, fell back below parity with the US currency.
Bond yields in Europe benefited from revised ECB rate hike expectations next week.
That of the ten-year German Bund gained more than three basis points to 1.569%, while its Italian equivalent of the same maturity exceeded the 4% threshold in session for the first time since mid-June before reducing its gains in closing at 3.951%. The yield spread (“spread”) between these two bonds widened in parallel during the session to 243.20 points, the highest level since July 29, before returning to 237 points.
In the United States, the yield of two-year Treasuries rose in session to a 15-year high at 3.53% and that of ten years took 13.3 points to 3.2628% on the eve of the publication of the report. employment monthly.
The health situation in China, combined with fears about inflation and interest rates are weighing on oil prices.
Brent fell 2.91% to 92.86 dollars a barrel and US light crude (West Texas Intermediate, WTI) 2.84% to 87.01 dollars a barrel.
TO BE FOLLOWED ON FRIDAY:
The 12:30 GMT report from the US Department of Labor on job creations, the unemployment rate and wages for the month of August
THE MARKET SITUATION
THE FENCE IN
Indices Last Var. Var. %YTD
Eurofirst 300 1608.12 -28.94 -1.77% -14.92%
Eurostoxx 50 3456.70 -60.55 -1.72% -19.58%
CAC 40 6034.31 -90.79 -1.48% -15.64%
Dax 30 12,630.23 -204.73 -1.60% -20.49%
FTSE 7148.50 -135.65 -1.86% -3.20%
SMI 10663.44 -191.59 -1.76% -17.18%
The values to follow in Paris
and in Europe: [WATCH/LFR]
THE TREND TO
Indices Last Var. Var. %YTD
Dow Jones 31344.34 -166.09 -0.53% -13.74%
S&P 500 3911.54 -43.46 -1.10% -17.93%
Nasdaq 11558.58 -257.62 -2.18% -26.12%
Nasdaq 100 12027.25 -244.79 -1.99% -26.30%
Minutes of the meeting at
Wall Street: [.NFR]
“The Day Ahead” – Update on the
next session on Wall Street [DAY/US]
Standby Price Var.% YTD
Euro/Dlr 0.9936 1.0057 -1.20% -12.60%
DLR/Yen 139.99 138.96 +0.74% +21.67%
Euro/Yen 139.11 139.68 -0.41% +6.74%
DLR/CHF 0.9841 0.9774 +0.69% +7.88%
Euro/CHF 0.9780 0.9828 -0.49% -5.68%
Stg/Dlr 1.1525 1.1622 -0.83% -14.81%
Index $ 109.7590 108.7000 +0.97% +14.13%
Gold Spot 1694.47 1710.71 -0.95% +11.70%
Last Var. Spread/Bund
Future Bunds 147.69 -0.28
10-year bunds 1.56 +0.00
Bund 2 years 1.18 +0.01
10-year OATs 2.18 +0.03 +61.40
10-year Treasury 3.26 +0.13
2-year Treasury 3.53 +0.08
Previous Price Var. Var.% YTD
US light crude 87.03 89.55 -2.52 -2.81% +42.18%
Brent 92.87 95.64 -2.77 -2.90% +40.65%
(Some data may show a slight shift)
(Written by Claude Chendjou, edited by Sophie Louet)