File photo of the offices of the London Stock Exchange Group
PARIS (Reuters) – Major European equity markets, with the exception of London, closed lower on Thursday and Wall Street lost ground in the mid-session, adding lower oil to caution as the Federal Reserve meeting approaches.
In Paris the CAC 40 lost 1.04% (64.57 points) to 6,157.84 points and in Frankfurt the Dax fell 0.55% while in London the FTSE 100 gained 0.07%.
The EuroStoxx 50 index lost 0.72%, the FTSEurofirst 300 0.58% and the Stoxx 600 0.65%.
At the time of the close in Europe, Wall Street was trading in the red after a hesitant start to the session: the Dow Jones was down by 0.18%, the Standard & Poor’s 500 by 0.62% and the Nasdaq Composite by 0.94%. .
After the turmoil of the last few days, mainly linked to the persistence of inflation in the United States, investors hoping to find new inspiration in the rain of the American indicators of the day have remained dissatisfied because they have not been able to draw conclusive conclusions.
Unemployment claims fell last week and retail sales rose an unexpected 0.3% in August. In addition, the “Empire State” activity index fell less than expected for September while the “Philly Fed” recorded an unexpected drop.
Finally, industrial production fell by 0.2% in August, but manufacturing production increased by 0.1%.
The good health of the labor market therefore seems to support consumption for the moment, but the order book of companies is showing signs of slowing down. All in a context of rising interest rates, which remains the number 1 concern of the markets.
Six days before the Fed’s decisions, the preferred scenario remains that of a three-quarter point hike in the fed funds rate, but the estimated probability of a 100 basis point hike remains above 20% according to the time barometer. real FedWatch.
This prospect continues to fuel the downward revision of the economic forecasts: Barclays now expects a contraction of advanced economies in the fourth quarter and global growth limited to 2.2% in 2023.
The price of the barrel fell nearly 4%, the lowest in a week, in reaction to the announcement of an agreement between employers and unions in the rail transport sector in the United States, which should help avoid a strike on a large-scale from Saturday and therefore great logistical inconveniences.
Brent dropped 3.53% to $ 90.78 a barrel and US light crude (West Texas Intermediate, WTI) dropped 3.74% to $ 85.17.
In Europe, the biggest sectoral decline of the day was for the energy sector, whose Stoxx index lost 2.1%. In Paris TotalEnergies fell by 2.4% and Vallourec by 6.57%.
The high-tech sector also suffered in the wake of the Nasdaq, recording a closing decline of 1.78%.
Growing, the banking sector benefited from the rise in Spanish stocks following the government’s statements on a possible modification of the project of exceptional taxation of bank profits. Santander gained 3.52%, Sabadell 4.9% and BBVA 2.23%.
The Stoxx index of eurozone banks took advantage of this to reach its highest level since 10 June.
In M&A news, Vodafone gained 1.98% after a news report that KKR and Global Infrastructure Partners funds were among contenders for entry into the funding round for its Vantage Towers (+ 11.39%).
The dollar hesitates against the other major currencies (+ 0.00%), not far from its recent highs.
The euro regained 0.1% against the greenback but remained below par at 0.9987. Against the Swiss franc, the single currency fell to its lowest level since January 2015.
The yen fell again after bouncing on Wednesday, due to a lack of new information on possible supportive interventions from Tokyo.
For the first time since July 2020, the yuan has plunged the threshold of seven for one dollar on the “offshore” market.
Bond yields are up in the United States as in Europe after the American indicators of the day, due to a lack of elements that would call into question the continuation of rate hikes.
The American two-year thus reached 3.879%, the highest level since 2007, and then rose again to 3.8604%, against 3.4548% for the ten-year.
In the eurozone, the German 10-year rose five basis points to 1.75% and the two-year hit an 11-year high of 1.539%.
The session was characterized by a brief reversal of the 10-30 year segment of the German yield curve, reflecting the growing concern for the health of the European economy.
(Written by Marc Angrand)