NEW DROP IN SIGHT IN EUROPE, PMI WILL ENJOY THE MORNING
PARIS (Reuters) – Major European stock markets are expected to continue their slide on Tuesday amid new indicators likely to underline the deteriorating economic situation and pending clarification on US monetary policy.
Index futures point to a drop of 0.17% for the Frankfurt Dax, 0.2% for the London FTSE 100 and 0.19% for the EuroStoxx 50. As for the Paris CAC 40, it could yield around 0.2% according to the first indications available.
The Parisian market lost 1.8% on Monday and registered its worst close since July 28, as did the broad European Stoxx 600 index (-1.0%), after a 13% rebound in gas prices. of natural reference in Europe and gloomy economic forecasts in Germany and the United Kingdom.
After a mid-summer rally helped by better-than-expected corporate results and the first signs of slowing inflation in the United States, investors appear to have suddenly been caught up in the reality of the economic slowdown and the aftermath of the war. in Ukraine.
The PMI “flash” indices will be followed in the morning to try to better assess the risk of recession in the coming months: the Refinitiv consensus expects them to confirm the contraction of private sector activity in Germany and in the eurozone as a whole.
In the United States, the session will also be driven by monthly data on new home sales, which should have been curbed by the rise in interest rates in July.
But even in the event of positive surprises, a marked increase in risk appetite is unlikely three days after the much-anticipated Jackson Hole intervention by Jerome Powell, chairman of the US Federal Reserve, which should confirm the priority given to the fight against inflation, and therefore the continuous rise in interest rates.
ON WALL STREET
The New York Stock Exchange closed sharply lower on Monday as investors favored assets seen as safer, such as government bonds and the dollar, as concerns about recession risk and monetary tightening mount.
The Dow Jones Industrial Average fell 1.91%, or 643.13 points, to 33,063.61, the Standard & Poor’s 500 lost 90.49 points, or 2.14%, to 4,137.99 (its worst daily performance since on June 16) and the Nasdaq Composite fell 323.64 points (-2.55%). ) to 12,381.57.
The 11 main S&P sector indices closed in the red and among the most marked falls, the technology compartment lost 2.78%, with the values of this sector being more sensitive to the evolution of rates.
Apple, Microsoft, Amazon and Nvidia lost 2.30% to 4.57%.
On the rise, Signify Health jumped 32.03% after Bloomberg reports that UnitedHealth, Amazon, CVS Health and Option Care Health made a bid to take over the home health provider.
Futures contracts on major indices point to a slightly higher open for now.
On the Tokyo Stock Exchange, the Nikkei index lost 1.18% less than an hour after closing, once again weighed down by technology after the fall of the Nasdaq: SoftBank lost 2.46%, Tokyo Electron 0.53%.
The trend is more mixed in China, with the Shanghai SSE Composite gaining 0.09% but the CSI 300 losing 0.33% as property values fell further (-1.59%).
The dollar lost some ground against the other major currencies (-0.05%), but this move did little to benefit the euro: the European single currency, at 0.992, remained very close to its 20-plus year low. on Monday. ($0.9926) in reaction to growing recession fears.
The general fall in safe havens seen on Monday also pushed the pound to a two-and-a-half-year low, while the yen hit a one-month low.
In the bond market, benchmark US yields dipped a bit after finishing higher on Monday ahead of Jerome Powell’s Jackson Hole intervention.
The ten-year bond was back at 3.0128% after a five-week high at 3.039% and the two-year bond fell almost three basis points to 3.306%.
Oil prices are on the rise after Saudi Arabia issued a warning of a potential OPEC+ production cut in response to falling prices in recent weeks.
Brent gained 0.51% to $96.97 a barrel and US light crude (West Texas Intermediate, WTI) 0.62% to $90.92.
The risk of OPEC+ supply cuts outweighs the still highly uncertain prospect of an Iranian nuclear commitment.
(Written by Marc Angrand, edited by Matthieu Protard)
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