2023-08-21 17:34:58
View of the Palais Brogniard, former Paris Stock Exchange
PARIS (Archyde.com) – European stocks ended on a hesitant note on Monday, amid concerns about the Chinese economy and the trajectory of US rates.
In Paris, the CAC 40 advanced 0.47% to 7,198.06 points, while the German Dax gained 0.19% and the British Footsie remained stable.
The EuroStoxx 50 index ended the session with an increase of 0.28%, against 0.11% for the FTSEurofirst 300 and a stable Stoxx 600. The Chinese central bank did not provide the support expected by the markets to its economy, having lowered its one-year lending rate by 10 basis points, against a consensus of 15 basis points, and left its 5-year rate unchanged.
The move comes as the real estate debt crisis worsens, as previously sound developers such as Country Garden face funding difficulties, and a property-exposed fiduciary group has had to interrupt the payment of its coupons on its investment products last week.
The markets are also worried about the resistance of the US economy to rate hikes: if this solidity can give hope for a soft landing in activity, it could also convince the Federal Reserve to raise its rates again.
Fed Governor Jerome Powell will speak on the U.S. economy on Friday at the Jackson Hole meeting, which will be watched closely by investors.
US stocks will also be eyeing Nvidia’s results, due on Wednesday, as the chipmaker has been a major contributor to risky asset performance this year. Any disappointment in the group’s results could therefore weigh on equities.
VALUES
The automotive sector posted the best sector performance of the Stoxx 600, up 1.11%, supported by Continental which is considering the sale of its automotive division currently grouped within ContiTech, according to Manager magazine. The German group rose 5.87% and dragged Stellantis (1.81%) and Renault (1.88%) in its wake, which posted the best performances in the CAC 40.
Conversely, concerns about the trajectory of rates weigh on real estate, which posted the worst performance of the Stoxx 600 and fell 1.95%. Unibail Rodamco finished at the bottom of the CAC 40, having lost 1.27%
A WALL STREET
Like the European markets, the American markets are hesitating in a context of caution.
At the time of closing in Europe, trading on the New York Stock Exchange indicated a decline of 0.7% for the Dow Jones, while the Standard & Poor’s 500 yielded 0.17% and the Nasdaq Composite advanced by 0. .42%.
RATE
Selling in the bond markets resumed strongly on Monday, as investors sought to position themselves in anticipation of higher key rates.
The German ten-year yield soared 8.5bp to 2.705%, while that of the two-year rate rose 5.8bp to 3.107%.
The ten-year Treasury yield jumped 9.9bp to 4.3499%, while the two-year yield rose 5.8bp to 4.9941%.
CHANGES
Foreign exchange markets are moving cautiously ahead of Jackson Hole and in a context of reduced risk appetite, the dollar nibbling 0.08% against a basket of benchmark currencies.
The euro advanced 0.12% to 1.0886 dollars. The pound fell 0.02% to $1.2732.
OIL
Crude rose modestly as markets sought direction amid production cuts and concerns over the state of Chinese demand.
Brent nibbles 0.64% to 85.34 dollars a barrel and US light crude (West Texas Intermediate, WTI) rose 0.97% to 82.04 dollars.
(Writing by Corentin Chapron, editing by Kate Entringer)
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