indices devises

by Laetitia Volga

PARIS (Archyde.com) – European stocks ended in the green on Wednesday as Wall Street rose as weaker-than-expected U.S. inflation data eased fears of a large Federal Reserve rate hike during of its next meeting in September.

In Paris, the CAC 40 gained 0.52% to 6,523.44 points. Britain’s Footsie gained 0.25% and Germany’s Dax advanced 1.23%.

The EuroStoxx 50 index ended up 0.91%, the FTSEurofirst 300 0.68% and the Stoxx 600 0.89%.

At the time of the close in Europe, Wall Street was on a sharp upward trend: the Dow Jones gained 1.54%, the Standard & Poor’s 500 1.94% and the Nasdaq Composite 2.58%.

Consumer prices (CPI) in the United States stagnated in July and showed an increase of 8.5% year on year while the Archyde.com consensus expected a rise of 0.2% month on month. and 8.7% on an annual basis.

Fed funds rate futures now reflect the likelihood that the US central bank will raise the fed funds rate target by 50 basis points in September (between 2.75% and 3%), not more than 75 basis points as estimated before the publication of the inflation figures.

The Fed’s fight once morest galloping inflation is far from over, however, and the institution’s officials might hesitate to slow down on the pace and extent of monetary tightening, some strategists point out.

“Overall, prices remain too high,” wrote Rubeela Farooq, at High Frequency Economics. “Coupled with job and wage growth, the inflation data supports the case for another big rate hike in September.”

Chicago Fed Chairman Charles Evans stressed that inflation remains at an “unacceptable” level and that the Fed will need to continue its monetary tightening to bring the “fed funds” rate likely into the range. 3.25%-3.5% by the end of the year.

VALUES

On the stock market, defensive sectors were among the biggest declines, with healthcare falling by 0.88% and utilities by 0.51%.

In corporate news, retailer Ahold Delhaize climbed 7.57% in Amsterdam following once more raising its annual earnings per share forecast.

RATE

US inflation data translated into lower bond yields as expectations of a sharp Fed rate hike in September waned.

The yield on ten-year US Treasuries hit a low of 2.674% before coming back around 2.76%, down three basis points.

The European market followed suit: Germany’s ten-year yield fell as much as 0.837%, its lowest since August 5, before paring its losses.

According to data from Refinitiv, money markets are still pricing in a 100% chance of a 50 basis point hike in key rates from the European Central Bank in September but investors now judge the rate hike to be 106 basis points. basis by December, compared to 113 bps before the publication of inflation in the United States.

“There’s enough of a difference in inflationary pressures between the US and the euro zone that short-term expectations for the ECB won’t change much,” said Peter Mccallum, strategist at Mizuho.

CHANGES

The dollar falls 1.34% once morest a basket of benchmark currencies (+0.02%) on the US inflation figures, which allows the euro to reach a five-week high once morest the note green at 1.0331.

The pound sterling fell in session to its lowest level since July 26 once morest the euro following a report from the Bloomberg agency that the British government plans to plan power cuts for industry and households in January in case of a very cold winter and a shortage of gas.

OIL

Oil prices are stabilizing following falling due to the resumption of crude deliveries on the Druzhba pipeline linking Russia to several Central European countries and the announcement by the US Energy Information Agency of a larger than expected increase in crude stocks in the United States last week.

Brent is unchanged at $96.3 a barrel and US light crude (West Texas Intermediate, WTI) is trading at $90.67.

(Written by Laetitia Volga, edited by Matthieu Protard)

PARIS (Archyde.com) – The New York Stock Exchange fell at the start of the session on Tuesday with disappointing forecasts from Micron Technology and cautious investors on the eve of monthly US inflation figures.

In early trading, the Dow Jones index lost 29.44 points, or 0.09%, to 32,803.1 points and the broader Standard & Poor’s 500 fell 0.24% to 4,130.09 points.

The Nasdaq Composite lost 0.81%, or 102.694 points, to 12,541.765.

Investors await with some feverishness the consumer price statistics which will be published one hour before the opening on Wednesday. A higher-than-expected inflation rate, following the good employment figures published on Friday, might probably encourage the Federal Reserve to continue its monetary tightening with sharp rate hikes. Traders estimate a 71.5% chance that the Fed will raise rates by 75 basis points in September.

The S&P energy index posted the strongest growth (+2.5%) thanks to the rise in oil prices fueled by fears over Europe’s supply from Russia.

Exxon Mobil and Chevron gain more than 2%. On the downside, Micron Technology fell 3.06% as the memory chipmaker issued a quarterly revenue warning and said its free cash flow is expected to be negative in the next quarter as demand continues to fall. Its competitors Nvidia and Advanced Micro Devices lost 2.81% and 2.64% respectively, deepening their losses recorded the day before following a similar warning from Nvidia.

* For values ​​to track, click

(Written by Laetitia Volga, edited by Jean-Stéphane Brosse)

Free stand. “Weekly view” by César Perez Ruiz, Head of Investments and CIO at Pictet Wealth Management.

The strength of the US labor market surprised markets last week with half a million jobs created in July, a figure well above expectations. Most of the new jobs have been in the service sector, which has benefited from the recovery of the economy following the lifting of health restrictions.

The average hourly wage increased by 5.2% on an annual basis, while unemployment reached its lowest level since 1969, at 3.5%. In this context, we do not expect any change in the Federal Reserve’s monetary policy, as the markets now expect a rate hike of 75 basis points (bps) at the September meeting.

Despite two straight quarters of negative growth, the U.S. economy is clearly not in a recession, even as investor fears have driven U.S. Treasuries holdings to levels not seen since November 2021. The onset of recession appears inevitable, but it is not imminent in our view. In the meantime, the US economy should benefit from the Inflation Reduction Act passed by the Senate late Sunday evening. We will be watching closely the next figures for producer and consumer price inflation, due later this week.

Probably the last quarter of strong sales growth

Stock markets held up well last week to the return of interest rate fears, thanks to the publication of rather reassuring results for the second quarter. Strong nominal growth translated into higher-than-expected sales and companies maintained margins by passing on higher costs to customers.

While 79% of S&P 500 companies announced an increase of +15% in their turnover and +10% in their earnings per share, these figures reached respectively +26% and +17% in Europe, thanks to to the weakness of the euro.

We are equity neutral. This is likely the last quarter of strong sales growth as consumers now prefer to seek the best prices or limit their purchases rather than accepting higher prices.

48% of containers passing through the Taiwan Strait now blocked

Reminiscent of the 1995 crisis, Chinese military exercises around the Taiwan Strait have intensified in response to the visit of Speaker of the US House of Representatives Nancy Pelosi. The Chinese army thus demonstrates that it is able to isolate the archipelago from the rest of the world.

With 48% of containers passing through the Taiwan Strait now blocked, supply constraints are likely to worsen if tensions persist. But it should be noted that China, heavily dependent on Taiwan for semiconductor chips, limited the blockade to 1% of its imports from the island.

Conversely, 42% of Taiwanese exports are destined for China, with 70% of the products concerned being related to technology. The current situation is likely to encourage companies to diversify their supply chains even further. In addition, world food prices plunged on an unprecedented scale since 2008 to reach their lowest level since January, in the wake of the Russian-Ukrainian agreement on the export of grain stocks.