Europe closes in red after the PMI figures

Europe closes in red after the PMI figures


EUROPEAN STOCK MARKETS END LOWER

by Claude Chendjou

PARIS (Reuters) – European stocks closed lower on Thursday and Wall Street was also trading in the red mid-session amid risk aversion linked to the release of PMI surveys in the United States, Europe and China, which reinforce fears of a recession while rising expectations of interest rate hikes.

In Paris, the CAC 40 began the month of September as it had ended in August, losing 1.48% to 6,034.31 points. The British Footsie fell 1.86% and the German Dax fell 1.6%.

The EuroStoxx 50 index fell 1.72%, the FTSEurofirst 300 1.77% and the Stoxx 600 1.8%.

Equity markets, which closed at the lowest since July, were hurt by manufacturing activity figures in the euro zone and the UK, which contracted in August to 49.6 and 47.3 respectively, according to the final results. from S&P Global surveys of purchasing managers.

In the United States, manufacturing activity was unchanged in August, at 52.8, while in China it fell for the first time in three months, at 49.5, due to weakening demand as the country persists in its policy of “zero COVID” so that the city of Chengdu will confine 21.2 million inhabitants.

“As European polls offer little hope that the bloc will avoid a recession at some point this year. And that is before winter sets in and energy bills skyrocket. The next six months will be long and hard for Europe. and you cannot count on the ECB to bring relief, quite the opposite”, summarizes Craig Erlam, market analyst at OANDA.

In fact, the markets are now largely betting on a rise in the cost of credit of 75 basis points this month in both the euro zone and the United States.

As a sign of nervousness, the volatility index rose in the United States to 27.18 points and in Europe it closed at 29.14 points (+4.29%).

VALUES IN EUROPE

In Europe, all the main compartments of the Stoxx 600 closed in the red, with commodities (-3.81%) and the tourism and leisure sector (-3.77%) registering the largest falls, in a context of fears of deterioration of 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, especially 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 full-year results, while Lufthansa fell 3.13% after announcing the cancellation of 800 flights on Friday.

The British group of consumer goods Reckitt Benckiser fell 5.17% after the announcement of the departure at the end of September of its executive director Laxman Narasimhan.

ON WALL STREET

At the close in Europe, the Dow Jones was down 0.5%, the Standard & Poor’s 500 was down 1.06% and the Nasdaq was down 2.14%.

The sectoral index of technological novelties and the one for semiconductors fell by 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 its chips dedicated to artificial intelligence to China.

Ford falls 2.19% after the announcement of the withdrawal of 198,000 Ford Expedition and Lincoln Navigator vehicles in the United States, while Boeing yields 5.03%, since the aircraft manufacturer declared that it is awaiting certification by part of the authorities of the 737 MAX 7 at the end of the year and the 737 MAX 10 of the next year.

Campbell Soup fell 2.99%, penalized by its 2023 adjusted earnings forecast, which came in below analyst expectations.

CHANGES

In the exchange rate, the dollar, which rose 0.97% against a basket of benchmark currencies, hit a new 20-year high on Thursday. Against the yen, it reached a maximum 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 haven asset.

The euro, down 1.19% at $0.9937, fell back below parity with the US currency.

SPEED

Bond yields in Europe benefited from revised ECB rate hike expectations next week.

The 10-year German Bund gained more than three basis points to 1.569%, while its Italian equivalent of the same maturity broke the 4% threshold in the session for the first time since mid-June before paring gains to close at 3.951%. . The yield differential (“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 on two-year Treasury bonds rose in session to a maximum of 15 years at 3.53% and the ten-year one took 13.3 points to 3.2628% on the eve of publication of the monthly employment report.

OIL

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 a barrel and US light crude (West Texas Intermediate, WTI) fell 2.84% to $87.01 a barrel.

TO FOLLOW ON FRIDAY:

The 12:30 GMT report from the US Department of Labor on job creation, the unemployment rate and wages for the month of August.

THE MARKET SITUATION

THE FENCE IN

EUROPE

Indices Last Var. Var. %THE LAST YEAR

Points

Eurofirst 300 1,608.12 -28.94 -1.77% -14.92%

Eurostoxx 50 3,456.70 -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

FINANCIAL WORLD

Indices Last Var. Var. %THE LAST YEAR

Points

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 in

Financial world: [.NFR]

“The Day Coming” – Update on the

next session on wall street [DAY/US]

CHANGES

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%

PRAYED

Var. %THE LAST YEAR

Spot Gold 1694.47 1710.71 -0.95% +11.70%

SPEED

Last Var. Spread/Bund

(points)

Future bonds 147.69 -0.28

10-year bonds 1.56 +0.00

2-year bond 1.18 +0.01

TAO at 10 years 2.18 +0.03 +61.40

10-year Treasury 3.26 +0.13

Treasury at 2 years 3.53 +0.08

OIL

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 change)

(Written by Claude Chendjou, edited by Sophie Louet)

#Europe #closes #red #PMI #figures

Leave a Reply

Your email address will not be published.