L’inflation ravive l’aversion au risque sur les actions

L'inflation ravive l'aversion au risque sur les actions


EUROPEAN STOCK EXCHANGES, WITH THE EXCEPTION OF LONDON, ENDED LOWER ON FRIDAY

by Claude Chendjou

PARIS (Reuters) – European stocks, with the exception of London, closed lower on Friday and Wall Street was also trading in the red amid inflation-linked risk aversion and recession fears following the release of the monthly production prices in Germany and statements by several US Federal Reserve (Fed) officials about the need for an interest rate increase.

In Paris, the CAC 40 ended with a loss of 0.94% to 6,495.83 points. The British Footsie, meanwhile, rose 0.11%. The German Dax lost 1.12%.

The EuroStoxx 50 index fell 1.25%, the FTSEurofirst 300 0.7% and the Stoxx 600 0.77%.

For the week as a whole, the Paris index fell 0.88% and the pan-European Stoxx 600 fell 0.80%.

Caution dominated stock trading in response to the release of German producer price data in July, which posted record monthly (+5.3%) and yearly (+37.2%) increases, suggesting the persistence of high inflation while natural gas prices hold. moving at high levels (247 euros per megawatt hour).

In its monthly report, the German Finance Ministry said on Friday that the country’s economic outlook is now bleak.

In the United States, several Fed officials, including James Bullard, Mary Daly and Esther George, reignited fears that the economy could slip into recession by declaring themselves in favor of a sharp rate hike in September, while the cost of credit has already raised by a total of 225 basis points since March.

“As market participants begin to return from their vacations and look back…they will find that central banks are still far from achieving their inflation control goals,” the notes wrote in a note from the strategists at ENG.

“So that means a continuation of the balance of power between central bank tightening expectations and recession fears.”

In this context, the intervention next week by Jerome Powell, president of the Fed, at the annual conference of central bankers in Jackson Hole, is especially expected.

VALUES IN EUROPE

At a sector level in Europe, the defensive compartments of healthcare (+0.79%) and food and beverages (+0.38%) resisted the downward trend, while economically sensitive sectors such as tourism (-3.03%) ) and the automobile (-2.8%) were among the most significant decreases.

Renault fell 3.07% and Stellantis 2.94%, while Sodexo (-1.2855%) was downgraded from Jefferies’ recommendation to “hold” the stock.

In the rest of Europe, Just Eat Takeaway soars 25.75% after the announcement of the sale of its stake in iFood to Prosus (-1.32%).

ON WALL STREET

At the close of Europe, the Dow Jones fell 0.78%, the Standard & Poor’s 500 1.18% and the Nasdaq 1.85%, in a context of taking profits and lack of appetite for risk in a context of anticipation of rate hikes .

The compartment for new technologies, sensitive to the evolution of the cost of credit, fell by 1.58%, with Amazon (-2.56%) and Alphabet (-1.98%) standing out.

On the corporate earnings side, Deere (-0.79%) was in the red after the world’s largest farm machinery maker cut its annual profit forecast, while Foot Locker jumped 22.29% at the end. of the year thanks to better-than-expected results. quarterly results and the announcement of the appointment of former Ulta Beauty director Mary Dillon as chief executive officer of the group.

SPEED

Bond yields in Europe were buoyed by the release of German producer prices, seen as a leading indicator of inflation. The ten-year Bund, a benchmark for the euro zone, took more than 13 basis points, to 1.229%, the maximum in a month, due to fears of stagflation in Europe, according to Viraj Patel, macroeconomic strategist at Vanda Research.

For its part, the yield on US 10-year Treasury bonds advanced 11 points to 2.992%, also up to a one-month high, supported by the latest statements from Fed officials.

CHANGES

In currencies, the dollar rose 0.56% against a basket of benchmark currencies, after hitting a five-week high in the session, heading for its best weekly performance since April 2020. The euro, down 0 .44%, trading at $1.0044, the lowest for more than a month.

The pound, on track for its biggest weekly decline against the dollar since September 2020, did not benefit from news of an unexpected rise in UK retail sales in July.

OIL

Oil prices are volatile after two consecutive rising sessions: the barrel of Brent gained 0.98% to 97.54 dollars and that of light American crude (West Texas Intermediate, WTI) 1.36% to 91 $.73.

(Some data may show a slight change)

(Written by Claude Chendjou, edited by Matthieu Protard)

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