Stocks in red, fear of recession in Europe
PARIS (Reuters) – Wall Street was expected to fall on Monday and European stock markets, except for London, also fell mid-session, as fears of a recession in the euro zone took precedence over optimism born of hopes for further easing of health restrictions in China.
Futures on the New York indexes indicated an opening on Wall Street down 0.36% for the Dow Jones, 0.4% for the Standard & Poor’s 500 and 0.27% for the Nasdaq, due mainly to uncertainties over evolution of interest rates after the monthly employment report in the United States published on Friday.
In Paris, the CAC 40 fell 0.53% to 6,706.25 points at 12:15 GMT. In Frankfurt, the Dax is yielding 0.6%. In London, however, the FTSE gained 0.3% thanks in particular to commodities.
The pan-European FTSEurofirst 300 index fell by 0.17%, the EuroStoxx 50 in the euro zone by 0.39% and the Stoxx 600 by 0.25%.
According to sources, China may announce ten new measures to adjust its policy to combat the COVID-19 epidemic on Wednesday, in addition to the relaxations announced in mid-November.
However, this information took a back seat mid-session after the publication of the S&P Global purchasing managers’ survey showed that private sector activity in the eurozone fell for the fifth consecutive month in November with the composite PMI at 47.8.
In Great Britain, the expected contraction in the fourth quarter seemed to be confirmed with a decline of around 0.4% of GDP due to a further decline in activity in the service sector in November after the manufacturing sector.
Retail sales in the euro zone also fell slightly more than expected in October, by 1.8% over the month and 2.7% over the year.
PRICES IN EUROPE
In Europe, the main resource compartment (+1.69%) posted the best development of the Stoxx 600 in reaction to the news from China.
In London, mining groups Anglo American, Glencore and Rio Tinto gained 2.30%, 1.36% and 2.61% respectively, while in Paris, Eramet advanced 5.20% and ArcelorMittal 2.24%.
In corporate news, Renault gained 1.3% despite uncertainties over an agreement on its strategic alliance with Nissan.
Luxury stocks such as Hermès (-0.39%), Kering (-0.82%) Burberry (-1.155%) and Richemont (-0.2%) were punished by HSBC forecasts, which expected a slowdown in sector sales from in the fourth quarter.
Credit Suisse jumped 4.44% in third-party expressions of interest for investing at least $1 billion in the group’s new investment banking division, according to information from the Wall Street Journal.
Vodafone, he is taking 0.18% after the announcement of the departure of its CEO Nick Read.
RATE
European bond yields were broadly stable despite statements by two European Central Bank officials, François Villeroy de Galhau, that it was too early to talk about a “terminal rate” that would be the highest for cost of credit in the euro zone.
The ten-year German Bund yield fell around two basis points to 1.83% and the two-year yield fell one point to 2.10%.
In the United States, yields, which closed on Friday due to fears of a recession, began to rise again on Monday: the ten-year gained 1.6 points, to 3.51%, and the two-year 3, 7 points, to 4.31%
CHANGES
The dollar fell -0.16% against a basket of benchmark currencies, its status as a safe haven asset suffering from expectations of an improving health situation in China.
The euro and pound sterling seized the opportunity to climb to more than five-month highs at 1.0585 dollars and 1.2345 dollars respectively.
OIL
Oil prices are benefiting from expectations of increased demand in China and OPEC+’s maintenance of its production cut of two million barrels per day (bpd), the entry into force on Monday of the G7 agreement on the capping of The price of Russian oil imported by sea was not seen as a surprise.
Brent rose 2.63% to 87.82 dollars per barrel and US light crude (West Texas Intermediate, WTI) 2.79% to 82.21 dollars per barrel.
(Written by Claude Chendjou, edited by Kate Entringer)
