European stock markets closed Monday without a common direction, but rather stable, at the end of a session without any major publication and in the absence of American investors, due to a public holiday in the United States, which tends to reduce trading volumes. The Paris Stock Exchange gained 0.2%, while London fell slightly by 0.15%. Frankfurt advanced slightly (+0.13%), enough to close at a new high, at 18,930.85 points.
The German ten-year rate rose slightly (2.34% against 2.30% on Friday), reacting little to the victory of the far-right AfD party in the regional election in Thuringia, which weakens the coalition of German Chancellor Olaf Scholz. “It’s not a big session” for the markets, marked by the absence of American investors due to a public holiday in the United States (Labor Day), comments Florian Ielpo, head of macroeconomic research at Lombard Odier IM. As a result, “There was little liquidity” et “There were no significant events either” to lead the stock markets in one direction or another, the analyst continued.
Investors remain focused on the United States and are trying to anticipate the extent of rate cuts by the American central bank (Fed), the first of which is expected in September. The markets will be particularly attentive to all indicators related to labor in the United States, “the Fed having indicated that no further slowdown in the jobs market would be tolerated”explains Florian Ielpo. In this context, the publication of the ISM manufacturing index for August will attract attention on Tuesday, “because the indicator contains an employment component”the analyst said. But the most important figures of the week are expected on Friday, in the US employment report.
The market expects four Fed rate cuts by the end of the year, and up to five more cuts in 2025. “If the employment data is not good, we risk seeing these expectations of rate cuts intensify.”to prevent too strong a slowdown in the American economy from leading it into recession, concludes Florian Ielpo.
Defense sector in decline
In Europe, defense stocks ended sharply lower. In Milan, Leonardo fell by 7.1%; in Stockholm, Saab AB fell by 5.47%; in Frankfurt, Rheinmetall lost 2.69%; in London, BAE Systems fell by 2.82% and in Paris, Thales dropped by 2.37%.
Volkswagen: savings plan welcomed
Investors reacted positively to announcements by the leading European automobile group Volkswagen (+1.25%), which is considering an unprecedented cost-cutting plan in the company’s history, with factory closures in Germany and dry layoffs, to cope with a “extremely tense situation” on its market.
Rightmove buoyed by possible takeover bid
The property classifieds site soared more than 27% in London after Australian company REA Group, controlled by media mogul Rupert Murdoch, announced on Monday morning that it was considering a “possible offer” to buy the site, without specifying the amount of its offer. REA Group shares lost 5.28% on the Sydney Stock Exchange.
Oil prices stable
Oil prices were fairly stable on Monday. At around 15:50 GMT, a barrel of North Sea Brent crude was trading at $76.92 (-0.02%) and its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in October, was up 0.18%, at $73.68. The euro gained 0.18% to $1.1068. Bitcoin was up 0.4% to $58,652.
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