New decline in sight in Europe after Wall Street – 06/29/2022 at 09:18

New decline in sight in Europe after Wall Street - 06/29/2022 at 07:54


EUROPEAN STOCK MARKETS ARE EXPECTED TO FALL

PARIS (Reuters) – The main European stock markets are expected to fall on Wednesday in the wake of Wall Street, which suffered the blow of a more marked deterioration than expected in the morale of American households, a newcomer to revive fears linked to the inflation and which has brought the risk of recession back to the forefront of investors’ concerns.

Index futures suggest a drop of 0.66% for the CAC 40 in Paris, 0.51% for the Dax in Frankfurt, 0.75% for the FTSE 100 in London and 0.54% for the EuroStoxx 50.

The Conference Board’s consumer confidence index fell 4.5 points in June to 98.7 and the expectations component fell to its lowest level since March 2013, which bodes well, according to survey officials. a deterioration in growth in the second half of the year and a risk of recession.

And statements by US Federal Reserve officials reaffirming the need for a rapid rate hike to curb inflation have not reassured investors: San Francisco Fed Chair Mary Daly pointed out that the bank Central was acting “as quickly as possible” and its counterpart in New York, John Williams, felt it necessary to act “quickly”.

Concerns about the US economy quickly took over the relief caused on Tuesday by the relaxation of quarantine rules in China.

Investors are now awaiting the intervention of Jerome Powell, the chairman of the Federal Reserve, during a debate with his counterparts from the European Central Bank (ECB), Christine Lagarde, and the Bank of England, Andrew Bailey, in the framework of the Central Banks Forum in Sintra, Portugal.

IN WALL STREET

The New York Stock Exchange ended sharply lower on Tuesday, weighed down by the figures from the household sentiment survey, which raised fears of a deterioration in the economic situation two weeks before the start of the results publication period.

The Dow Jones index fell 1.56%, or 491.27 points, to 30,946.99, the Standard & Poor’s 500 lost 78.56 points (-2.01%) to 3,821.55 and the Nasdaq Composite lost fell 343.01 points (-2.98%) to 11,181.54.

Among the heavyweights of the rating, Amazon fell by 5.14%, Microsoft by 3.17% and Apple by 2.98%.

Nike also dropped 7.0% after reporting a lower-than-expected profit forecast.

Futures on major indices suggest a slightly higher open.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index ended down 0.91%, technology having suffered from the decline of the Nasdaq on Tuesday: Tokyo Electron lost 2.84%, SoftBank 1.64%.

Contrary to the trend, the electricity companies took advantage of the declarations of the Japanese Prime Minister, Fumio Kishida, on his desire to use nuclear capacities as much as possible.

In China, the Shanghai SSE Composite fell by 0.87% and the CSI 300 by 0.94%. They had finished Tuesday at the highest since March 4, after a rebound of almost 20% since the end of April.

EXCHANGES/RATES

The dollar is virtually unchanged against other major international currencies (+0.09%) and therefore retains most of the gains made on Tuesday.

The euro, at 1.0491, continues the decline started on Tuesday (-0.61%, its biggest daily drop since June 13) after Christine Lagarde’s speech in Sintra, which did not bring any new element on the European Central Bank (ECB) interest rate trajectory.

On the government bond market, the yield on US Treasury bills stands at 3.1378%, down seven basis points. Its German equivalent amounts to 1.627% in the first exchanges.

OIL

The oil market fell after three consecutive sessions of increases, but profit taking was limited by the prospect of a still tense situation in the absence of excess capacity in the major producing countries.

Brent fell 0.46% to $117.44 a barrel and US light crude (West Texas Intermediate, WTI) 0.3% to $111.42.

(Written by Marc Angrand)

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