US markets suffered on Wednesday after two indicators pointed to an economic slowdown, which also weakened the dollar, and slowed the bullish momentum in European equities.
After a positive open, Wall Street turned around: the Dow Jones returned 1.00%, the S&P 500 0.75% and the Nasdaq 0.59% around 17:00 GMT.
In Europe, Paris closed up 0.09% and Milan 0.27%, while Frankfurt lost 0.03% and London 0.26%.
The day’s economic indicators highlighted the economic slowdown in the United States, with steeper-than-expected declines in retail sales and industrial production.
“Recent data is sufficiently ambiguous to fuel the debate about a possible entry into a recession in the United States,” notes William De Vijlder, chief economist at BNP Paribas.
But this trend also shows the success of the US Federal Reserve in its fight against inflation, through a drop in demand: US producer prices also fell more than expected in December.
Investors continue to hope that central banks are then less proactive in their willingness to raise rates, such as Wednesday’s decision by the Bank of Japan, which maintained its accommodative policy, contrary to the expectations of some speculators. The Tokyo Stock Exchange took advantage of this and closed up 2.5%.
On the bond market, sovereign rates in Europe and the United States fell sharply: the US 10-year rate fell to 3.42%, against 3.55% on Tuesday.
And in terms of currencies, the dollar lost ground: the euro advanced by 0.25% to 1.0815 against the greenback after climbing to its highest level since April at 1.0887 dollars.
The pound rose even more (+0.55% to 1.2354 dollars), to the highest in a month, after the publication of inflation data which remains above 10% in the United Kingdom despite a slight slowdown.
It’s Microsoft’s turn to fire
American computer group Microsoft announced on Wednesday a series of cost-cutting measures, including the layoff of about 10,000 employees by the end of March, or just under 5% of its workforce, “in response to macroeconomic conditions and changes in customer priorities”. The stock fell 1.46%.
The tech sector held up a little better as funding conditions eased, with Apple up 0.37% and Amazon up 0.55% on Wall Street.
ASMI semiconductor pilot fish
Dutch semiconductor maker ASM International has raised its fourth-quarter sales forecast, which is expected to be released in late February.
The stock jumped 9.78% and led industry heavyweights such as STMicroelectronics (+2.03%), ASML (1.19%), Infineon (+0.59%).
United Airlines flies beyond expectations
The American company United Airlines, encouraged by the solidity of demand for its air tickets even at high prices, on Tuesday unveiled forecasts well above expectations for 2023, in particular anticipating a quadrupling of its operating profits. The stock fell 2.79% on Wall Street after a higher open.
In Europe, the aviation sector has been well oriented. Air-France-KLM gained 1.29% after announcing earlier today that it will not bid for Italy’s ITA Airways while Lufthansa (+5.41%) will bid to take a stake.
Linde says “auf Wiedersehen” in Frankfurt
Linde shares lost 1.53%. The shareholders of the German chemist today approved the proposed delisting from the Frankfurt Stock Exchange, marking the exit of one of the heavyweights of German industry from this European financial centre.
On the oil side
The oil market continued its momentum after already being buoyed the day before by hopes of a strong Chinese economic recovery this year: around 16:45 GMT, a barrel of US WTI gained 1.56% to 81, $43 and a barrel of Brent North Sea crude oil advanced 1.35% to $87.00.
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