Europe ends in the red after the publication of the PMI indices


EUROPEAN STOCK MARKETS END LOWER

by Claude Chendjou

PARIS (Reuters) – European stock markets ended lower again on Tuesday as Wall Street moved in mid-session disorder amid fears of a recession, monthly PMI indices in the euro zone and the United States showing a further contraction in economic activity.

In Paris, the CAC 40 ended down 0.26% at 6,362.02 points. The British Footsie lost 0.61% and the German Dax lost 0.27%.

The EuroStoxx 50 index fell by 0.16%, the FTSEurofirst 300 by 0.48% and the Stoxx 600 by 0.42%.

Economic activity in the eurozone contracted for the second consecutive month in August with the composite PMI at 49.2, the weakest reading since February 2021, while in the UK it fell sharply. slowed down with a composite PMI index at 50.9 after 52.1 in July.

In the United States, activity plunged this month to its lowest level in 18 months, the composite PMI index having come out at 45.0 against 47.7 in July, in a context of weakening demand and monetary tightening against a backdrop of record inflation.

Sales of new homes fell 12.6% in July to 511,000 units, the US Department of Commerce announced on Tuesday.

The statistics pushed investors away from risky assets ahead of US Federal Reserve Chairman Jerome Powell’s much-anticipated speech at the annual Jackson Hole symposium on Friday.

VALUES IN EUROPE

On the pan-European Stoxx 600, basic resources (+2.55%) and energy (+3.15%) posted the strongest sector gains. Both of these compartments were supported by supply concerns, with Saudi Arabia citing a possible drop in oil production while the shutdown for maintenance of the Nord Stream 1 gas pipeline raised fears of a longer suspension in the context of the war in Ukraine.

The steelmaker ArcelorMittal and the oil company TotalEnergies took the lead in the CAC 40 with respective gains of 3.02% and 3.24%.

On the downside, Dassault Systèmes fell 2.4%, in the wake of the decline in the technology compartment, sensitive to changes in interest rates.

Elsewhere in Europe, German group Uniper advanced 4.02% after announcing the restart of the Heyden 4 coal-fired power plant in North Rhine-Westphalia in anticipation of the shutdown of Nord Stream 1.

Ryanair gained 1.96% on the upward revision of its passenger target for its full year.

AT WALL STREET

At the close in Europe, the Dow Jones fell 0.38%, the Standard & Poor’s 500 was almost stable and the Nasdaq advanced 0.16% on the back of buying on the cheap after Monday’s sharp drop in technology stocks.

Amazon and Tesla gain 0.33% and 1.61% respectively.

In business news, Macy’s jumped 5.47% as the department store group’s quarterly profit beat expectations, while Zoom Video Communications tumbled 15% after lowering its full-year profit and revenue guidance business in a context of falling demand and intensifying competition.

CHANGES

On the foreign exchange market, the euro rose to 0.9974 dollars (+0.33%) after hitting a new low in more than 20 years at 0.99005 during the session. The single currency recovered after the new home sales statistics in the United States.

The dollar, which had been at its highest since mid-July against other major currencies, lost 0.62% after this statistic.

RATE

The yield on ten-year Treasuries fell nearly four basis points to 2.9961% after a five-week high of 3.039%.

“The data points to a major contraction, showing that the economy has weakened rapidly, paving the way for the scenario that the Fed may not be as aggressive (as expected),” said Edward Moya, analyst at OANDA.

In Europe, yields also pared their closing gains: that of the ten-year German Bund took around two basis points to 1.32% while the two-year fell to 0.852% after touching a new higher in the session. high since late June at 0.941%.

OIL

Oil prices are rising, driven by the statements of the Saudi Minister of Oil, who recalled that OPEC had the means to raise prices by lowering its production.

The barrel of Brent rose 3.15% to 99.52 dollars a barrel and that of American light crude (West Texas Intermediate, WTI) 3.41% to 93.44 dollars.

(Written by Claude Chendjou, edited by Bertrand Boucey)

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