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MARKET REVIEW. European markets were hovering around equilibrium on Thursday, keeping an eye on interest rates in the bond market.
Wall Street was preparing for its part to attempt a new rebound, after two sessions clearly in the red.
In Asia, the indices rebounded strongly. The Hong Kong stock market soared after further easing from the Chinese central bank, while Tokyo ended higher.
Stock indices at 7:58 a.m.
In the United States, futures contracts Dow Jones posted an increase of 107.00 points (+0.31%) to 35,017.00 points. The futures contracts S&P 500 increased by 14.50 points (+0.32%) to 4,538.75 points. The futures contracts Nasdaq collected 91.25 points (+0.61%) at 15,124.75 points.
In Europe, the results were mixed. In London, the FTSE 100 gave up 12.43 points (-0.16%) to 7,577.23 points. In Paris, the CAC 40 posted a decline of 20.52 points (-0.29%) to 7,152.46 points. In Frankfurt, the DAX increased by 2.55 points (+0.02%) to 15,812.27 points.
In Asia, the Nikkei Tokyo ended up 305.70 points (+1.11%) at 27,772.93 points. For his part, the Hang Seng Hong Kong climbed 824.50 points (+3.42%) to 24,952.35 points.
On the oil side, the price per barrel of American WTI was down US$0.76 (-0.87%) at US$86.20. The barrel of Brent de la mer du Nord retreated US$0.60 (-0.68%) to US$87.84.
The context
The prospect of an accelerated tightening of US monetary policy and new signs of high inflation reduce investors’ risk taking,” said Jochen Stanzl, CMC Markets.
The pause observed in the rise in rates on the bond market and in oil prices did not convince investors to return to equities.
On the bond market, the yield on 10-year debt in the United States was around 1.84%, after a peak of 1.90% reached the day before during the session. The German bond rate with the same maturity, the Bund, remained negative (-0.02%) after its incursion into positive the day before.
Rates have been rising in recent weeks as inflationary pressure pushes central banks in Western economies to reduce their monetary support and plan a series of key rate hikes, notably for the US Federal Reserve.
Fighting inflation will require “a long-term effort”, conceded US President Joe Biden on Wednesday, who has made this axis a priority. “By then it will be painful for a lot of people,” he acknowledged.
Against this backdrop, “strong earnings are the only hope for short-term bulls,” said Swissquote analyst Ipek Ozkardeskaya.
In the USA, Netflix opens the ball for earnings releases from the big names in the technology sector.
The UK food and meal delivery platform Deliveroo published figures on Thursday indicating a sharp increase in performance for its 2021 financial year, despite the reopening of restaurants with the lifting of health measures linked to COVID-19. The action took 2.21% to 173 pence.
In Germany, Puma (+1.29% to 95.58 euros) also satisfied investors with a 14% increase in sales in the fourth quarter.
Conversely, the railway manufacturer Alstom fell 1.22% to 33.14 euros on the Paris Stock Exchange after results below consensus, despite a full order book.
The French company in the semiconductor sector Soitec plunged 15.76% to 172.60 euros after dissension for its management. It announced on Wednesday the imminent departure of its general manager Paul Boudre, in a decision contested by the executive committee which deemed it “incomprehensible” according to concordant sources.
Oil prices were stabilizing on Thursday, near seven-year highs reached on Wednesday, pending weekly U.S. commercial inventory figures released by the U.S. Energy Information Agency (EIA).
The euro was trading for 1.1336 US dollars (-0.05%) around 7:35 a.m. Quebec time.
the bitcoin was up 0.58% at US$41,960.