Traders work at the Frankfurt Stock Exchange
by Claude Chendjou
European stock markets ended lower on Thursday amid a rise in bond yields, with the American Federal Reserve (Fed) warning on Wednesday that it would probably slow down the pace of its monetary easing.
At the close in Europe, the Dow Jones rebounded by 0.52%, the Standard & Poor’s 500 by 0.62% and the Nasdaq by 0.86% after suffering their worst fall in one session since August on Wednesday.
In Paris, the CAC 40 ended down 1.22% at 7,294.37 points. The British Footsie lost 1.14% and the German Dax lost 1.35%.
The EuroStoxx 50 index lost 1.58% and the FTSEurofirst 300 1.51%. The Stoxx 600 also declined by 1.51%, with all its major sectors finishing in the red, notably new technologies and real estate, which are very sensitive to rate fluctuations.
The Fed announced Wednesday that it expects only two rate cuts of 25 basis points in 2025, half a percentage point less than in its September forecast.
While the initial movement of panic was digested on Thursday on Wall Street, with a CBOE volatility index falling by more than 26%, stocks in Europe in turn suffered massive sales, with investors fearing in particular a significant dip. of the rate gap between the United States and Europe.
VALUES IN EUROPE
Microchip stocks like ASML, Infineon Technologies and STMicroelectronics fell 3.69% to 6.20%. Valneva jumped 9.56% after announcing that it was increasing the accessibility of its Chikungunya vaccine in Asia.
SoftwareOne Holding climbed 7%, as the Swiss technology group announced an agreement to buy Crayon Group (-4.07%), valuing its Norwegian competitor at around $1.34 billion.
TODAY’S INDICATORS
The US economy grew in the third quarter at a faster pace than initially expected, according to final gross domestic product (GDP) data.
Business conditions in the Philadelphia region deteriorated in December, with the Philly Fed index at -16.4 after -5.5 in November.
Unemployment claims fell in the United States last week, to 220,000 compared to 242,000 the previous week.
The business climate in industry in France remained stable in December compared to the previous month, at 97 points.
CHANGES
The dollar advanced Thursday, 0.4% against a basket of currencies, after reaching a two-year peak during the previous session, in reaction to announcements from the American Federal Reserve.
The yen lost ground against the dollar, to 157.57 per dollar, after the Bank of Japan (BoJ) kept its rates unchanged and gave few clues on its monetary outlook.
The euro stands at 1.0367 dollars, while the pound sterling trades at 1.2525 dollars (-0.39%) after the status quo on rates decided by the Bank of England (BoE).
RATE
Euro zone bond yields jumped on Thursday, but not as much as their American equivalents, after the Federal Reserve said it wanted to slow the pace of its easing in 2025.
That of the ten-year German Bund, benchmark for the euro zone, ended with a gain of 6.6 basis points (bp), at 2.309%, while that of American Treasury bonds of the same maturity advanced by 7.2 bp, at 4.5722%.
OIL
Oil prices fell after the Fed’s announcements: Brent fell by 0.82% to $72.79 per barrel and American light crude (West Texas Intermediate, WTI) by 0.68% to $70.10.
(Written by Claude Chendjou)
