Equities slide continues, dollar stabilizes (updated)

Equities slide continues, dollar stabilizes (updated)


THE FALL IN EQUITIES CONTINUES, THE DOLLAR STABILIZES

PARIS (Reuters) – Europe’s main stock markets are headed for another drop on Wednesday, as market sentiment continues to be weighed down by signs of an economic slowdown and the prospect of further interest rate hikes amid still inflation. on the rise

Index futures contracts suggest a drop of 0.18% for the Paris CAC 40, 0.39% for the Dax and 0.22% for the EuroStoxx 50. London could narrowly escape the general decline, as the FTSE 100 is currently indicated to have risen 0.05%.

The CAC 40, like the Dax and the broad European Stoxx 600 index, has already posted three straight sessions of decline and is now posting a negative performance for the month of August after a sharp rebound in July.

Tuesday’s session was dominated by economic indicators that underscored the reality of recession risks, whether it be the European and US “flash” PMI indices, most of which reflect a contraction in private sector activity, or sales of new houses in the United States. United States, at its lowest level for six and a half years in July.

Investors, however, continue to anticipate further monetary tightening, an option that several US Federal Reserve officials have favored in recent days ahead of Federal Reserve Chairman Jerome Powell’s speech at the symposium on Friday. from Jackson Hole, Wyoming.

Neel Kashkari, president of the Minneapolis regional office, explained Tuesday that his biggest fear was that the monetary authorities underestimated the magnitude and duration of inflationary pressures, adding that it was “very clear” in his eyes that the Fed should continue to tighten. politics.

In fact, rare are the analysts who bet on a softening of Jerome Powell’s speech despite the deterioration of economic indicators.

“If you start giving the market any hope that things will get better over time, you risk ending up undermining your own strategy,” said Rob Carnell, an economist at ING.

ON WALL STREET

The New York Stock Exchange closed lower on Tuesday after the first results of the S&P Global PMI survey and new home sales statistics.

The Dow Jones Industrial Average fell 0.47%, or 154.02 points, to 32,909.59 and the Standard & Poor’s 500 lost 9.26 points, or -0.22%, to 4,128.73 while the Nasdaq Composite ended almost unchanged at 12,381.30.

Zoom Video Communications fell 16.5% after lowering its full-year profit and revenue forecast amid falling demand and intensifying competition. -times the reduction in the par value of its share.

Index futures so far suggest a lower open of around 0.3%.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index closed down 0.49%, its fifth straight drop, posting its worst close since Aug. 10.

In China, the Shanghai SSE Composite fell 1.4% and the CSI 300 1.37%, the lowest level in two weeks, as fears of an economic slowdown regained the upper hand over hopes of further stimulus measures. .

CHANGES

The dollar rises slightly against the other main currencies (+0.14%) and increases its rise since the beginning of the week to more than 0.5%.

The euro fell another 0.25% against the dollar to 0.9942, but remained above a fresh near 20-year low of 0.99005 hit in Tuesday’s session.

SPEED

US Treasury yields fell about two basis points to 3.0369% for ten-year bonds and 3.307% for two-year bonds.

They thus retreat a little from the rise registered on Tuesday, which took the decade to its highest level in more than a month, with investors betting on a “tough” speech by Jerome Powell in Jackson Hole despite signs of deterioration in the situation. economic. .

In Europe, the 10-year German Bund yield rose slightly in early trading to 1.337%. It reached 1.375% on Tuesday for the first time since July 1.

OIL

The price of the barrel is falling, the fear of a reduction in the supply of OPEC + that had favored a rise of close to 4% on Tuesday is gradually dissipating.

Brent fell 0.18% to $100.04 a barrel and US light crude (West Texas Intermediate, WTI) fell 0.07% to $93.67.

(Written by Marc Angrand, with Tom Westbrook in Singapore, edited by Matthieu Protard)

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