The financial centers of Paris (+ 1.85%), London (+ 1.70%) and Madrid (+ 2.50%) wiped out their losses on Monday.
A sharp rebound on Wednesday allowed the Western stock markets to make up for their losses at the start of the week, once the Delta variant set aside and attention refocused on good corporate results.
In Europe, the financial centers of Paris (+ 1.85%), London (+ 1.70%) and Madrid (+ 2.50%) wiped out their losses on Monday, a session marked by sharp declines.
Frankfurt and Milan for their part grew by 1.36% and 2.36% respectively. In Zurich, the SMI gained 0.64%.
The New York Stock Exchange continued its rebound from the day before. Around 5:30 p.m. GMT, the Dow Jones advanced 0.74%, the Nasdaq 0.61% and the S&P 500 0.67%.
On Monday, markets had fallen sharply due to the threat the Delta variant of the coronavirus poses to the economic recovery.
But, now, “worries (…) seem to have been replaced by optimism”, driven in particular by “better than expected business results today,” said Michael Hewson, chief analyst at CMC Markets UK.
Between good corporate results and the conviction that central bank support will not stop anytime soon, investor risk aversion seems to have dissipated.
The quarterly results season has so far been “very good in the United States and also positive in Europe,” according to Philippe Cohen, manager at Kiplink Finance.
The markets also have their sights set on the monetary policy meeting of the European Central Bank (ECB) on Thursday.
Philippe Cohen “does not expect any surprises from this meeting”. “We can recognize Christine Lagarde’s consistency”: as long as the economy has not picked up, the President of the ECB should not, according to him, announce the withdrawal of monetary support.
“The decisive step will be the Jackson Hole conference at the end of August, this is where the ECB and the Fed should reveal themselves and unfold their plans”, anticipates the analyst.
In the bond market, yields recovered after falling sharply in recent days.
The American soft drink giant Coca-Cola (+ 1.23% to 56.51 dollars) has revised its forecasts upwards for 2021 in favor of the reopening of the economy. It anticipates a 12% to 14% growth in its turnover.
Netflix does not convince
Netflix fell 4.33% to 508.11 dollars, after disappointing results announced Tuesday after the close of the stock market. Despite a doubling of its quarterly profit over one year, “investors did not like the target of growth in the number of subscribers, set at 3.5 million for the third quarter, lower than the 5.86 million that Wall Street anticipated, ”said Edward Moya analyst at Oanda.
The car in shape
In Paris, automotive suppliers had the wind in their sails in the wake of half-year results above expectations published by Plastic Omnium (+ 4.91% to 26.52 euros), despite shortages of electronic components. Valeo took 2.77% to 23.78 euros and on the manufacturers’ side, Renault appreciated by 4.46% to 31.41 euros and Stellantis by 3.29% to 15.68 euros.
Even Daimler (+ 1.10% to 70.84 euros) ended up in the green in Frankfurt after lowering its sales forecast for its main automotive branch Mercedes-Benz Cars.
According to Philippe Cohen, the sector is driven by the prospects for sales of electric and hybrid vehicles and the fact that “valuations in the automotive sector are low.”
On the oil, euro and bitcoin side
Oil prices were still up on Wednesday, continuing like the stock markets rebound from a fall on Monday and not suffering from news of an unexpected rise in crude oil inventories in the United States.
Around 5.30 p.m. GMT, a barrel of Brent North Sea for September delivery gained 4.21% to 72.30 dollars in London from Tuesday’s close.
In New York, a barrel of WTI for the same month, which is the first day of use as a benchmark contract, rose 4.87% to 70.44 dollars.
The euro appreciated 0.17% against the greenback, to 1.1799 dollars, after having reached at the start of European trade a low since the beginning of April, at 1.1752 dollars.
Bitcoin reinforced its rebound (+ 7.05% to $ 32,050).