Traders work at the New York Stock Exchange
by Claude Chendjou
PARIS (Archyde.com) – European stocks ended higher and Wall Street was also in the green midday on Monday, as equity markets opted for a rebound for the first session of the fourth quarter following a markedly difficult September. by concerns regarding economic conditions, interest rates and inflation.
In Paris, the CAC 40, which ended the third quarter with an overall decline of 2.71%, began the last three months of the year with a gain of 0.55% to 5,794.15 points. The British Footsie advanced 0.22% and the German Dax 0.79%.
The EuroStoxx 50 index gained 0.72% and the FTSEurofirst 300 0.64%. The Stoxx 600, which lost 4.73% over the three months to September, rebounded 0.77%.
The rebound in Europe, led by Wall Street, which posted its third consecutive weekly decline last week, was led mainly by commodities and energy, in a context of fears over supply, which took on the not on concerns regarding the recession and falling demand.
Final results from the monthly S&P Global Purchasing Managers Survey confirmed that manufacturing activity in the eurozone recorded its steepest contraction in 27 months in September, with the index falling to 48.4 following 49.6 in August.
In the United States, the deceleration in manufacturing activity was also confirmed with an index published by the Institute for Supply Management (ISM) which rose in September at its weakest pace in almost two and a half years, at 50.9, while the new orders index contracted to 47.1, in a context of rising interest rates which undoubtedly weighed on demand.
These two statistics have revived hopes that European central banks might slow the pace of their interest rate hikes.
“There is a more worried tone around systemic risks and therefore the hope that central banks will be more cautious,” said Antoine Bouvet, rates strategist at ING.
VALUES IN EUROPE
In Europe most of the major sectors of the rating ended in the green, basic resources (+2.64%) and energy (+2.94%) in the lead.
Sources told Archyde.com that OPEC+ is considering a production cut of more than 1 million barrels per day at its meeting on Wednesday.
TotalEnergies gained 3.08%, BP 2.21% and Eni 3.04%.
New technologies (+0.91%) were also sought following in the wake of the strong rebound of the Nasdaq linked to bargain purchases.
In business news, the title Credit Suisse lost 0.93% amid rising Credit Default Swaps (CDS) and concerns regarding the state of liquidity of the Swiss bank which is finalizing a restructuring expected on October 27.
Bonduelle fell 4.77% following the publication of an annual profit down 38%.
Logitech International fell 1.72% and Just Eat Takeaway 5.72% following recommendation cuts from Exane BNP Paribas and JP Morgan respectively.
A WALL STREET
At the close in Europe, the Dow Jones advanced 2.01%, the Standard & Poor’s 500 1.76% and the Nasdaq 1.21%.
Ten of the eleven main indices of the S&P-500, which on Friday recorded its worst September since the 2008 financial crisis with a drop of nearly 9% over the whole month, are in the green.
Technology groups Meta Platforms and Microsoft and Apple gained 0.36% to 1.80%.
In the wake of the oil jump, Exxon Mobil and Chevron take 4.32% and 4.77% respectively.
On the downside, Tesla fell 8.66% following reporting vehicle deliveries below expectations in the third quarter. Its competitors in the electric Lucid Group and Rivian Automotive yield respectively 2.21% and 4.10%.
CHANGES
The pound benefits from the announcement of the abandonment of the plan to abolish the top bracket of income tax following the presentation on September 23 of a much criticized “mini budget” which plunged the United Kingdom into financial turmoil.
The British currency, which hit a one-week high of 1.133 dollars in session, gained 0.98% to 1.1274 dollars at the close of trading in Europe. The dollar, for its part, fell 0.37% once morest a basket of international currencies, including the euro, which advanced 0.06% to 0.9805 dollars.
The yen rose 0.19 to $144.48 as Japan said it was ready to take “decisive” action in the foreign exchange market if excessive movements in its currency persist.
RATE
Bond yields in the UK fell as the close approached in Europe in reaction to the latest government announcements. The two-year and ten-year Gilt rates fell 26.4 points to 4.017% and 17.3 points to 3.928% respectively.
The ten-year German Bund yield, a benchmark for the euro zone, ended down 22.1 points to 1.89%, its lowest level since September 22, due to a downward revision in expectations of interest rate hikes given the weakness of the latest economic indicators, in particular the PMIs.
In the United States, the yield on Treasuries with the same maturity also fell 20.1 points to 3.603%.
OIL
Oil prices are driven by a possible OPEC+ production cut of more than a million barrels per day, which would represent the largest drop in extractions since the start of the COVID-19 pandemic.
Brent crude jumped 3.72% to 88.31 dollars a barrel and US light crude (West Texas Intermediate, WTI) 4.21% to 82.84 dollars.
(Written by Claude Chendjou, edited by Sophie Louet)
