2024-02-14 04:11:19
Across the Atlantic, Wall Street sank into the red: the Dow Jones recorded its worst session of the year and lost 1.35%. The technology-dominated Nasdaq lost 1.80% and the S&P 500 lost 1.37%.
“The central element of the session” was inflation in the United States with the publication of the CPI index, underlines Alexandre Hezez, analyst for the Richelieu group. Published mid-session, the CPI index revealed a slowdown in inflation in January in the United States, to 3.1% over one year compared to 3.4% in December. However, analysts hoped to see the index fall to 2.9%, below the symbolic threshold of 3%.
“The machine is having trouble slowing down”
“We remain on a trend of disinflation, but we see that the machine is having difficulty slowing down in the United States,” estimates Alexandre Hezez. However, “if inflation suddenly stabilizes or picks up, this would mean that the interest rates of the American central bank (Fed) will not fall,” he continues.
Read also: Inflation in Switzerland fell to 1.3% in January
Investors now estimate a 33% chance of a Fed rate cut in May, compared to 52% on Monday, according to CME Group futures market calculations. After the publication of the CPI, “the market reaction” was however “in line with expectations”, quips Edoardo Campanella, economist at UniCredit. “The dollar appreciated, Treasury yields jumped and stock prices fell,” he summarizes.
On the bond market, the yield on two-year US Treasury bills, the maturity most sensitive to expectations regarding monetary policy, climbed to 4.66% around 9:30 p.m. GMT compared to 4.48% at Monday’s close. .
Read also: Unemployment in the United States: we should not take the figures literally
For the ten-year maturity, the interest rate rose to 4.32%, the highest since November 30, compared to 4.18% on Monday. On the foreign exchange market, the dollar climbed 0.58% once morest the euro which was worth 1.0709 dollars.
The CPI index is the one on which, in particular, pensions are indexed. The Fed favors another measure of inflation, the PCE index, which it wants to bring down to 2% – a level considered healthy for the economy – and whose data for January will be published on February 29.
Real estate and technology in the red
Sensitive to interest rate levels, the values of the real estate and technology sectors have fallen significantly in Europe. In Paris, shopping center giant Unibail-Rodamco-Westfield (URW) fell 4.17%. In Frankfurt, Adler lost 10.78%, Deutsche Wohnen 3.06%.
On the technology side, the global call center giant Teleperformance suffered a drop of 3.04% and the Franco-Italian manufacturer of electronic components STMicroelectronics fell by 3.53%. In London, Deliveroo dropped 2.4%. In Frankfurt, HelloFresh dropped 8.12% and Infineon 4.96%.
Lyft levitating
Lyft, Uber’s competitor in car rental with driver, was levitating (+58% to 19 dollars) following the close in electronic trading on Wall Street on the announcement of results exceeding expectations and the projection of achieve operational balance in 2024.
In the wake of the American CPI, an ounce of gold traded for $1,992.40 (-1.34%) around 9:30 p.m. GMT, falling below the $2,000 threshold. Bitcoin hovered around $50,000 earlier in the session, a threshold exceeded on Monday for the first time since November 2021, but fell to $49,659 (-0.38%).
Read also: “Europe must create strategic stocks of rare metals”
Oil prices ended higher, ignoring the unpleasant surprise in US inflation, with some seeing this as a sign that demand remains strong. The price of a barrel of Brent from the North Sea increased 0.93%, to close at 82.77 dollars. A barrel of American West Texas Intermediate (WTI) gained 1.23%, to $77.87.
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