Global Equity Market Update: August Ends with Losses, Inflation Data Influences Trading

2023-08-31 21:01:07

Wall Street ended without direction: the Dow Jones index lost 0.48% and the S&P 500 fell 0.16% while the Nasdaq gleaned 0.11%, managing to remove a fifth session of gains in a row .

In Europe, Frankfurt stood out with an increase of 0.35%. Milan lost 0.29%, London 0.46% and Paris 0.65%.

These seven indices ended August with a monthly loss. The global equity index MSCI World fell by more than 2% over the month, its worst performance since February.

The session was dominated by inflation data but also limited, ahead of the important US jobs report due on Friday .

The euro zone’s annual rate remained stable in August at 5.3%, Eurostat announced on Thursday, a figure higher than analysts’ expectations (5.1%).

“The good news is that core inflation (which does not take into account volatile energy and food prices), the preferred measure of the European Central Bank (ECB), has slowed as expected. “, reports Christophe Boucher, Chief Investment Officer of ABN Amro Investment Solutions.

On the bond market, interest rates on European sovereign debt fell, particularly on short-term maturities which are more sensitive to monetary policy expectations.

For Christophe Boucher, these inflation figures, combined “with a deterioration in the economic outlook, will probably be enough for the ECB to take a break (in its rate hikes, editor’s note) at its September meeting”.

In the United States, inflation began to accelerate once more in July, to 3.3% over one year once morest 3.0% in June according to the PCE index published on Thursday, a measure favored by the American central bank (Fed).

The rise in prices, especially in services, “challenges the idea that the slowdown is at work and might worry Fed officials ahead of the meeting of the central bank’s monetary committee in September,” thinks Ben Ayers, economist at Nationwide.

Friday with the figures for job creation and unemployment in the United States, we expect a slowdown in new hiring and a marginal increase in the unemployment rate which would be viewed favorably by the markets, as this would give less reason the US Central Bank (Fed) to keep these interest rates high for a long time.

UBS results hailed

Swiss banking giant UBS posted a net profit of $29 billion in the second quarter of 2023, thanks to the takeover at a bargain price of its arch rival Credit Suisse, whose integration is expected to generate more than $10 billion. savings but which will lead to 3,000 job cuts in Switzerland.

Its stock gained 6.05% in Zurich.

Salesforce in power

Salesforce, the customer relations software giant, posted stronger-than-expected earnings and revenue and raised its full-year sales forecast to $34.8 billion, driven in particular by the development of the ‘artificial intelligence. The stock rose 2.99%.

Oil on the rise

Oil prices accelerated their gains on Thursday as the announcement of new production cuts from OPEC+ producing countries (the Organization of the Petroleum Exporting Countries and their allies) approached in an already tight market.

The barrel of Brent from the North Sea took 1.16% to 86.86 dollars and that of American WTI gained 2.45% to 83.63 dollars.

The price of gas in Europe fell by 9.21% to 35.75 euros per megawatt hour.

The euro nosedived once morest the dollar: -0.74% to 1.0842 dollars for one euro around 8:45 p.m. GMT.

Bitcoin fell 4.16% to $26,117.

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