Frankfurt (-2.26%), Milan (-2.49%), Paris (-1.68%) and London (-0.70%) fell at the end of the session, ending down on the whole of the week. In Zurich, the SMI lost 1.10%.
At the end of a week of anxious waiting, the stock markets suffered the blow following the speech of the president of the American central bank on Friday, who reaffirmed with force his will to fight inflation, even if it means penalizing economic activity. .
Around the balance before the brief speech, delivered at 2:00 p.m. GMT, Wall Street fell very sharply: the Dow Jones lost 1.60%, the S&P 500 1.92% and the Nasdaq 2.45% around 3:50 p.m. GMT.
Same trend in Europe, where Frankfurt (-2.26%), Milan (-2.49%), Paris (-1.68%) and London (-0.70%) stalled at the end of the session, ending in decline for the week as a whole. In Zurich, the SMI lost 1.10%.
The movements were marked on the other markets, with a further sharp rise in interest rates on government bonds, particularly in Europe: the German yield for the 10-year bond rose to 1.38%, while it was still only 0.89% on August 15. The gap with the Italian rate was also widening.
The euro briefly gained 1% once morest the dollar before falling a little: around 3:50 p.m. GMT, it rose another 0.30% to 1.0005 dollars.
Fed Chairman Jerome Powell confirmed the institution’s guidelines: the American central bank will “vigorously use its tools” to curb inflation, which will lead to “a long period of weaker growth”, but there Giving up would, he says, be even more damaging to the economy.
The slowdown in US inflation in July, measured in particular by the PCE indicator, published on Friday, is not enough to lower our guard, he also commented.
“We expected a ‘hawkish’ speech (in favor of a strict monetary policy, editor’s note), it was more than expected. He left no door” to which supporters of a softer line might have clung, said Lionel Melka, director of research at Homa Capital.
This drop in shares erases for the markets part of the gains accumulated this summer, when investors had leaned towards “the chimeras” of a more flexible monetary policy, according to Mr. Melka.
Pressure on gas and electricity in Europe
In the euro zone as in the United Kingdom, the rise in energy prices, particularly gas and electricity, is putting even more pressure on the economy.
The price of European natural gas on the benchmark market, the Dutch TTF, remained close to its closing record on Thursday, falling 2.15% to 314.50 euros per megawatt hour around 3:40 p.m. GMT.
In a crazy week for energy prices in Europe, wholesale electricity prices for 2023 in Germany and France broke new records on Friday at 995 euros and more than 1,130 euros per megawatt hour (MWh) respectively with increases of around 25% over the session. These prices were around 85 euros a year ago.
The Czech Presidency of the European Union has announced that it wants to convene an emergency meeting on the energy crisis.
Technology stocks penalized
The Fed’s determination to raise its key rates, which then affects the debt market, penalized technology stocks more heavily, as they are very sensitive to financing conditions, which are essential for their growth.
Amazon (-2.94%), Alphabet (-4.34%) or Meta (-2.95%) returned most of their gains the day before. Tech companies whose results were unconvincing were hit harder, such as computer manufacturer Dell Technologies (-11.45%), online installment specialist Affirm (-20.16%).
Electronic Arts was floating (+5.28%), pushed by information from the Swedish media GLHF, according to which Amazon was regarding to make a takeover offer for the video game publisher.
In Europe, meal delivery platforms have also slipped, such as Just Eat (-7.79%), HelloFresh (-7.21%) or Deliveroo (-5.64%).
On the oil side
Rising in the morning, oil prices were turning around: the barrel of Brent from the North Sea, the benchmark for crude in Europe, for delivery in October, was stable at 99.34 dollars around 3:40 p.m. GMT.
A barrel of West Texas Intermediate (WTI), for delivery the same month, lost 0.35% to 92.17 dollars.
Bitcoin fell 4.05% to $20,770.
