EUROPEAN SCHOLARSHIPS END IN RED
PARIS (Reuters) – European stock markets ended in the red on Thursday and Wall Street retreated slightly, opting for caution in the face of uncertainties over monetary policy in the United States and geopolitical instability in Afghanistan.
In Paris, the CAC 40 lost 0.16% to 6,666.03 points. The British Footsie fell by 0.35% and the German Dax by 0.42%.
The EuroStoxx 50 index lost 0.27%, the FTSEurofirst 300 lost 0.3% and the Stoxx 600 closed down 0.32%.
At the time of the European close, the main Wall Street indices were down slightly, from -0.2% to -0.4%, for fear of a reduction in purchases of securities by the Federal Reserve after calls for it. meaning of three members of the institution.
James Bullard, the chairman of the St. Louis Fed, and his colleague at the Kansas City Fed, Esther George, indicated in two separate interviews that the US central bank is gradually moving towards a plan to reduce asset purchases, without however specifying when this could be decided.
Their counterpart in Dallas, Robert Kaplan, said for his part that the US economy was still on track for the Federal Reserve to begin a ‘tapering’ in October or soon after.
In this context, the speech of the president of the institution, Jerome Powell, Friday at the economic symposium in Jackson Hole will be followed with even more attention.
Market participants further mentioned the deadly double explosion near the Kabul airport in Afghanistan as an explanation for risk aversion.
“Geopolitics usually don’t have too much of an impact on the market, but when news like this comes out it tends to have a little effect,” said Randy Frederick, Managing Director of Trading and Derivatives at Schwab Center for Financial Research.
VALUES
The European media sector posted one of the biggest gains, with its Stoxx index gaining 0.39%, backed by Vivendi. The French media and entertainment group gained 2.64%, at the top of the CAC, after its subsidiary UMG, which will soon be listed on the stock market, predicted an acceleration in its turnover growth this year.
Bouygues advanced 1.143% after raising its annual forecasts, the conglomerate having said it expects a current operating margin in 2021 at its level before the health crisis.
In decline, the cyclical compartments of raw materials (-1.49%), transport and leisure (-1.12%) and distribution (-0.81%) showed the strongest declines.
In Frankfurt, DWS fell 13.66% as the asset management group is targeted by an investigation by the US stock market policeman on the use of its sustainable investment criteria, according to a person familiar with the matter.
TODAY’S INDICATORS
In the United States, neither the upward revision of the gross domestic product (GDP) for the second quarter to 6.6% at an annualized rate, nor the slightly stronger than expected increase in weekly jobless claims have had any impact. real impact on the market trend.
In the morning, investors learned of the deterioration in the confidence of French business leaders and German consumers in August. The INSEE business climate indicator fell to 110 against 113 the previous month and the German index calculated by the GfK institute fell to -1.2 against -0.4 in July.
CHANGES
The dollar gained 0.19% after hitting its daily high against a basket of international currencies following statements by Esther George and James Bullard in favor of tightening monetary policy in the United States.
“James Bullard’s voice is being heard and you have to assume it’s having some impact (although he’s not a voting member),” said Steven Ricchiuto, chief US economist at Mizuho Securities USA.
The euro retreats slightly, to $ 1.1758.
The members of the Governing Council of the European Central Bank discussed at length their new indications on the future path of interest rates (“forward guidance”) and modified their project on several occasions in order to allay the concerns and objections of several officials of the institution, shows the minutes of their July meeting.
The South Korean won fell 0.52% against the greenback in the offshore market, erasing its initial advance after the widely expected rate hike by South Korea’s central bank.
RATE
On the bond market, the yield on ten-year Treasuries stabilized at 1.354% after a two-week peak at 1.375%.
Its German ten-year equivalent ended the day virtually unchanged at -0.415%.
OIL
The oil market is declining for the first time this week, penalized by renewed concerns about global demand amid rising COVID-19 cases.
The resumption of production in Mexico, affected by a fire on Sunday on an offshore platform, is also contributing to weigh on prices.
Brent fell 1.09% to $ 71.46 and US light crude (WTI) 1.24% to $ 67.51.
(Laetitia Volga, edited by Bertrand Boucey)
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