EUROPE FINISHES IN THE RED
(Repeat for bullet points)
by Claude Chendjou
PARIS (Archyde.com) – European stocks ended lower on Friday, while Wall Street moved on a hesitant note in the middle of the session, as equity markets were still shaken by the figures for U.S. inflation which peaked 40 years on an annual basis and revived fears of an acceleration in monetary tightening.
In Paris, the CAC 40 ended down 1.27% at 7,011.6 points. The British Footsie lost 0.15% and the German Dax 0.42%.
The EuroStoxx 50 index fell by 1%, the FTSEurofirst 300 by 0.56% and the Stoxx 600 by 0.59%.
Over the week as a whole, however, the Parisian index gained 0.86% and the Stoxx 600 1.61% thanks in particular to the solid results generally published by companies. However, equity markets remain under pressure from central bank policies.
The US Department of Labor reported on Thursday that the consumer price index (CPI) rose 7.5% year on year, its fastest pace since February 1982, while so-called core inflation (“ core CPI”) rose 6.0% year-on-year, its strongest growth since August 1982.
St. Louis Federal Reserve Chairman James Bullard said he was in favor of a 1% rate hike by July.
Goldman Sachs now says it expects seven 25bp rate hikes in the U.S. and HSBC expects a 50bp hike in March followed by four quarter-point hikes for the rest of the year .
In the euro zone, where inflation in the euro zone reached 5.1% in January over one year, leading some analysts to predict a rate hike as early as June, Christine Lagarde, President of the European Central Bank (ECB ), however, said in an interview published on Friday that a rapid rate hike would not solve inflation-related problems and that a gradual adjustment was preferable.
VALUES IN EUROPE
In Europe, most Stoxx 600 sectors ended lower, with real estate (-1%) and healthcare (-1.3%) posting the largest losses.
Energy (+1.3%), driven by a further rise in oil prices, and automotive (+0.9%), supported by the preliminary results of Mercedes-Benz (formerly Daimler) (+6.7 %), were among the few compartments to resist the downtrend. BMW advanced 2.7% and Volkswagen 0.7%. Volvo Cars, on the other hand, fell 4.7%, penalized by the publication of a quarterly profit below analysts’ expectations.
In Paris, EDF lost 2.3% following lowering its estimate of nuclear production in France for 2023.
Euronext lost 2.5%, its quarterly results being marked, according to analysts, by a stronger increase than expected in its expenses.
The results of Ipsen (+6.4%) and TF1 (+1.8%) were however welcomed.
Worldline, for its part, jumped 5.7%, as the Wall Street Journal reported that the Apollo fund was set to buy the company’s payment terminals for $2.3 billion ($2.02 billion). euros).
A WALL STREET
At the time of the close in Europe, the Dow Jones advanced 0.1% but the Standard & Poor’s 500 fell 0.17% and the Nasdaq 0.5%.
The prospect of an acceleration of monetary tightening in the United States supports the major banks on Wall Street. JPMorgan Chase & Co, Goldman Sachs Group, Bank of America Corp, Wells Fargo & Co, Citigroup and Morgan Stanley advance from 0.4% to 2.2%, while the financial compartment takes 0.5% and that of banks 0 .9%.
The digital giants, which had already suffered on Thursday, are still declining, like Tesla, Apple, Alphabet and Microsoft, which lost 0.3% to 2.3%.
On the results side, the action of the American sports equipment manufacturer Under Armor plunged 9.5% following a warning on its margin for the current quarter.
The only economic indicator of the day, the morale of American households deteriorated more than expected in February, the first estimate of the monthly survey from the University of Michigan showed on Friday, with a confidence index at 61.7, the level the lowest since October 2011.
CHANGES
In foreign exchange, the dollar advanced 0.16% once morest a basket of international currencies, still supported by expectations of a stronger than expected rise in US Federal Reserve rates.
The euro, down 0.26%, fell below the threshold of 1.14 dollars, penalized by the latest statements by Christine Lagarde.
RATE
US bond yields continue to rise in the wake of US inflation data.
That of ten-year Treasuries took nearly 3.4 basis points to 2.0626%, following crossing the 2% threshold on Thursday for the first time since August 2019. The two-year yield, the most sensitive to changes rates, ahead of four points to 1.597%.
The yield spread between these two bonds fell for the first time since August 2020 below 40 basis points, a sign of anticipation of a sharp hike in rates by the US Federal Reserve.
In Europe, the ten-year German Bund yield ended almost stable at 0.292% the day following its peak since December 2018.
Its French equivalent of the same maturity also stood still at 0.763%.
OIL
Prices are up in reaction to the International Energy Agency (IEA) announcement of tensions in the crude market but are heading for a decline over the week on inflation concerns and the prospect of an increase in Iranian supply.
The barrel of Brent advances by 1.7% to 92.9 dollars and that of American light crude oil (WTI) by 1.8% to 91.5 dollars.
(Report Claude Chendjou, edited by Sophie Louet)
