Place de la Bourse in Paris
by Claude Chendjou
The main European stock markets, except Paris, ended in the green on Tuesday, while on Wall Street, the indices were slightly in the red at mid-session in a session dominated by wait-and-see, the market opting for caution before the results of Nvidia and key indicators expected in the week.
In Paris, the CAC 40, the only major European stock market to have finished in the green on Monday, fell 0.32% on Tuesday to 7,565.78 points. The British Footsie, closed on Monday due to a public holiday, rose 0.21%. The German Dax rose 0.44%.
The EuroStoxx 50 index gained 0.12%, the FTSEurofirst 300 0.29% and the Stoxx 600 0.23% thanks to the good performance of defensive sectors such as healthcare (+0.23%), utilities (+0.20%) and telecoms (+0.51%). Mining stocks, whose index on the Stoxx 600 rose 0.76% in the wake of copper prices now close to a six-week peak, also supported the stock markets.
At the time of the European close, the Dow Jones fell by 0.23% the day after closing at a record level for the first time in over a month. The Standard & Poor’s 500 fell by 0.04% and the Nasdaq fell by 0.06%. The American stock indices were penalized by the caution observed in the new technologies sector while Nvidia, the second largest global market capitalization behind Apple, must publish its quarterly accounts on Wednesday after the close of Wall Street.
Meanwhile, investors are keeping an eye on the US indicators of the week, notably the quarterly GDP and the monthly PCE price index, while the chairman of the Federal Reserve (Fed), Jerome Powell, opened the door on Friday to a first monetary easing on September 18 in view of the deterioration of the economy.
VALUES IN EUROPE
Mining groups Rio Tinto (+1.10%) and Anglo American (+1.28%) ended in the green, benefiting from the results of the Australian BHP Group which doubled the growth of its copper activity after a better than expected annual profit.
Ryanair rose 4.37%. Group Chief Executive Michael O’Leary said on Tuesday the airline no longer saw a risk of double-digit percentage declines in average fares this summer. Rival Easyjet jumped 6.89%.
Santander rose 2.73% as the Spanish bank launched a €1.525 billion share buyback programme.
In terms of recommendation changes, Daimler Truck dropped 1.19% with Goldman Sachs’ recommendation of “neutral” on the stock and Associated British Foods lost 0.59% with Deutsche Bank’s recommendation of “sell”. Continental on the other hand gained 2.74%, with UBS’s recommendation of “buy” on the stock.
TODAY’S INDICATORS
In Germany, the economy contracted by 0.1% in the second quarter compared to the previous one, while consumer sentiment is expected to deteriorate in September due to a rise in unemployment.
Consumer confidence in the United States improved in August, with the Conference Board index at 103.3 compared to 101.9 in July.
CHANGES
The dollar fell 0.11% against a basket of benchmark currencies to a one-year low on the prospect of a Fed rate cut next month.
The euro was down 0.01% at $1.1160, still close to a 13-month peak hit on Monday, while sterling was up 0.26% at $1.3227, around a two-year high hit last week. British Prime Minister Keir Starmer said on Tuesday that unpopular and painful decisions were needed to try to solve the problems facing Britain, particularly in terms of the budget.
Both currencies, and particularly the euro, have been the main beneficiaries of the recent wave of dollar weakness.
RATE
Geopolitical risk in the Middle East that could fuel inflation pushed up eurozone bond yields, with the ten-year German Bund ending up 3.1 basis points at 2.279%.
Its French equivalent rose 5.2 points to 3.008%, as Emmanuel Macron began a new round of consultations with a view to appointing a Prime Minister after having ruled out the possibility of a government led by the New Popular Front (NFP).
In the United States, the rate of ten-year Treasury bonds rose by 2.4 basis points to 3.8425%, the day after a practically stable session.
OIL
Oil prices fell slightly on Tuesday after jumping more than 7% in the previous three sessions amid supply concerns sparked by fears of a spread of the Middle East conflict and a possible shutdown of Libyan oil fields.
Brent fell by 1.47% to $79.99 per barrel and American light crude (West Texas Intermediate, WTI) fell by 1.76% to $76.07.
(Written by Claude Chendjou, edited by Kate Entringer)
