New York (awp/afp) – European stock markets sank on Tuesday, worried about the prospect of new customs duties imposed on the United States’ trading partners, while Wall Street took a break.
European stock indices accentuated their losses at the end of the session and the Paris Stock Exchange fell by 2.69% at the close, Frankfurt by 2.13%, Milan by 2.15% and London dropped 1.22%. In Zurich, the SMI fell 1.60%.
The Americans “chose to bring back to the White House a man who declared, only a few weeks ago, that the European Union would have to ‘pay a high price’ if he won”, underlines Isabelle Mateos y Lago, economist at BNP Paribas.
“These variations are much more logical than the gains” that European indices were able to record after the election of Donald Trump last week “given the questions surrounding the economic consequences for Europe”, comments Andrea Tuéni, market analyst of Saxo Banque France.
Donald Trump warned that customs duties remained the cornerstone of his trade policy, citing the imposition of a surcharge ranging from 10 to 20% on all foreign products entering the United States and promised to go up to 60% for those from China.
In this context, “the election of Donald Trump could well prove to be the shock that will save Europe from procrastination on the measures to take to preserve its place in the world”, notes Isabelle Mateos y Lago.
In New York, the Dow Jones gave up 0.86 percent, the Nasdaq index 0.09 percent and the broad S&P 500 index 0.29 percent.
The S&P 500 remained positive for five sessions, which allowed it to progress by 5%. On Monday, all three indexes finished at records, just like Friday.
“After such progress in such a short period of time, it is not surprising to see the market catching its breath,” comments Art Hogan of B. Riley Wealth Management.
“If a reason was needed, the new rise in the 10-year bond rate provided it,” adds the analyst.
The yield on 10-year US government bonds rose to 4.42%, compared to 4.30% the day before at the close.
Investors were also cautious in view of the expected publication on Wednesday of the CPI consumer price index.
The euro bends against the dollar ___
Bitcoin, the largest cryptocurrency in terms of capitalization, took full advantage of Donald Trump’s return to power and rose to $89,968.
For comparison, it was trading below $70,000 before the November 5 presidential election.
Under a Trump presidency, with a Senate dominated by the Republican Party – also on track to obtain the House of Representatives – the United States could adopt bitcoin as a strategic reserve asset.
“There is no reason” to see the rise of bitcoin stop and the threshold of “100,000 dollars seems easily achievable”, estimates Andrea Tuéni.
On the foreign exchange side, the dollar continues to gain ground, benefiting from expectations of a more restrictive monetary policy from the American Central Bank (Fed), due to the inflationary risks of the future American president’s program.
The greenback gained 0.31% to 1.0623 dollars per euro, which fell earlier to its lowest level in a year against the United States currency.
Oil is floundering ___
Oil prices have increased very slightly, but remain weighed down by the prospect of apathy in Chinese demand, while supply could be oversupplied in the months to come.
The price of a barrel of Brent from the North Sea, for delivery in January, gained 0.08% to close at $71.89.
That of a barrel of American West Texas Intermediate (WTI), maturing in December, gained 0.12% to $68.12.
Bayer, notable fall of the session ___
German agrochemical and pharmaceutical giant Bayer fell more than 15% in Frankfurt, posting one of the worst performances of the European session, after the group announced that it remained in the red in the third quarter with a net loss. of 4.18 billion euros.
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