A trader at his desk at CMC Markets in London
by Claude Chendjou
PARIS (Reuters) – European stocks closed higher on Monday for a third straight session on the back of a possible stimulus plan in China and strong performance from the media and semiconductor sectors, while Wall Street indices rambled at the end of the day. of the morning in New York, investors were generally cautious after the comments deemed restrictive by a US Federal Reserve (Fed) official on interest rates.
In Paris, the CAC 40 closed with a gain of 0.22% at 6,609.17 points. The UK Footsie advanced 0.92% and Germany’s Dax gained 0.62%.
The EuroStoxx 50 index rose by 0.49%, the FTSEurofirst 300 by 0.14% and the Stoxx 600 by 0.14%.
At the close in Europe, the Dow Jones was up 0.27%, while the Standard & Poor’s 500 fell 0.02% and the Nasdaq 0.39%.
Christopher Waller, one of the US central bank governors, said the Fed might consider slowing the pace of rate hikes in December, but that shouldn’t be seen as a “slack” in its commitment to cut the US rate. ‘inflation.
He also believed that markets should now focus on the “peak in rates”, although we are probably still “a long way off”, and not the pace of any hike, deeming more data than just the numbers needed. week, which showed a more marked slowdown than expected.
US retail sales data, due on Wednesday, could provide investors with new insights into economic conditions and future rates as the Fedwatch Barometer forecasts a range of 4-4 Federal Funds, 25%-4.5% within December.
Goldman Sachs, for its part, expects a “significant” drop in US inflation next year with a core PCE index at 2.9% versus 5.1% now.
In the euro zone, where final October inflation figures are due on Thursday, European Central Bank (ECB) executive board member Fabio Panetta said on Monday the bank should continue to hike rates, avoiding excessive tightening which could destroy productive capacity and deepen the recession.
Those statements, however, took a back seat as investors in Europe cling to reports from China, where an easing of health restrictions is still expected despite a resurgence in COVID-19 cases and the implementation of a plan to tighten the troubled real estate sector.
US President Joe Biden and his Chinese counterpart Xi Jinping also both called for improved relations between Washington and Beijing on Monday, ahead of the opening of the G20 summit in Bali, Indonesia.
VALUES IN EUROPE
The media sector (+0.75%) and new technologies (+1.16%) were among the best performers on the Stoxx 600. The former was driven by an increase in the annual profit forecast of the British specialist in organization of events and fairs Informa, whose share took 5.75%. In his wake, Pearson, CTS Eventim and Lagardère gained 1.64%, 1.73% and 1.71% respectively.
The technology sector was buoyed by German semiconductor maker Infineon (+7.77%), which on Monday announced plans to invest five billion euros in a new plant in Dresden after revising upwards its long-term financial targets term. ASML of the Netherlands gained 2.5% and French-Italian STMicroelectronics gained 3.14%.
Elsewhere, Teleperformance, challenged over working conditions in Colombia, gained 6.68%, a meeting on the file scheduled between the call center specialist and the Colombian government.
Roche lost 3.98% in response to a setback in two clinical trials for an Alzheimer’s disease drug candidate.
On Wall Street, the three major indexes move erratically, the Nasdaq is weighed down by tech stocks (-0.32%) due to new rate worries.
Meta Platforms, Apple and Amazon lost 0.4% to 1.82%.
On the upside, Biogen and Eli Lilly took 4.17% and 1.23% respectively, profiting from the setbacks of their Swiss competitor Roche.
Movie operator AMC Entertainment jumped 7.20% on the weekend success of the movie ‘Black Panther: Wakanda Forever’.
INDICATORS OF THE DAY
Industrial production in the euro area rose more-than-expected in September, by 0.9% month-on-month and 4.9% year-on-year, according to data released by Eurostat on Monday.
Bond yields in the US are supported by Christopher Waller’s statements: the 10-year yields 4.5 basis points to 3.87% and the 2-year 7.5 points to 4.40%
In Europe, the yield on the German Bund closed almost stable, with the 10-year bond at 2.15% and the two-year bond at 2.11%.
In the foreign exchange market, the dollar, which lost 4% last week, its biggest weekly decline since March 2020, recovered 0.57% against a basket of international currencies on Monday, benefiting from the rate hike.
The euro, which rose in the morning on Asian markets to a three-month high, lost 0.1% to 1.0342 dollars. Among cryptocurrencies, bitcoin fell 1.17% to $16,501 but the sector remains under pressure after the fall of FTX as the CEO of Binance, the world’s leading cryptocurrency exchange, called for new regulation on Monday.
Oil prices are hurt by both a strong dollar, a record number of COVID-19 infections in China and a drop in OPEC’s crude demand forecasts for this year and next.
Brent crude fell by 1.97% to 94.1 dollars a barrel and US light crude (West Texas Intermediate, WTI) by 2.52% to 86.72 dollars a barrel.
(Written by Claude Chendjou, edited by Sophie Louet)