Business

Stocks sink, dollar wins – 09/23/2022 at 13:11


A display screen exhibits the decline within the French CAC 40 share value in Paris

LONDON (Reuters) – Wall Street was anticipated to fall sharply on Friday and European shares had been buying and selling at close to two-yr lows because the rising menace of a recession and a number of price hikes in current days dampened investor urge for food for riskier property.

Futures contracts on New York’s predominant index signaled a decline of 1.14% for the Dow Jones, 1.35% for the S&P 500 and 1.49% for the Nasdaq.

In Paris, the CAC 40 misplaced 2.1% to five,794.13 factors round 10:55 GMT, its lowest since July 5. In London, the FTSE 100 fell 1.79% and in Frankfurt, the Dax fell 2.33%.

The EuroStoxx 50 index fell 2.41%, the FTSEurofirst 300 2.07% and the Stoxx 600 2.53%.

The latter fell to its lowest degree since December 2020, its decline accentuated after the discharge of the primary outcomes of the S&P Global PMI survey, which confirmed a marked contraction in non-public sector exercise within the euro zone.

And morale on Wall Street is clearly not good: Goldman Sachs minimize its yr-finish goal for the S&P 500 by 16% to three,600 factors versus 4,300, implying an extra drop of about 5% from the top of December.

In a be aware written the day after the Federal Reserve’s announcement, David Kostin, an analyst at Bank of America, defined that “most fairness traders have taken the view {that a} exhausting touchdown state of affairs is inevitable, and their priorities are the timing, depth, and length of that state of affairs in addition to potential recessions.” Investment Strategy for.”

For its half, Bank of America, in its weekly replace on funding flows, identified that equities haven’t but bottomed out, as markets are removed from deflationary shocks. , rising rates of interest and recessions.

Values ​​in Europe

No ranking sector in Europe escaped the downturn. The sharpest declines had been in commodities (-4.96%) and vitality (-4.01%) compartments, in opposition to a backdrop of decrease oil and base metallic costs (-3.6%). % for copper, -5% for nickel, for instance).

In the banking sector, Credit Suisse fell 8.97% to an all-time low after Reuters reported that the financial institution was contemplating one other capital enhance, which might be its fourth in seven years.

The solely rise within the CAC 40 was for Airbus, which gained 0.3% after a reassuring assertion by its CEO on the day of its presentation to traders.

M6 additionally took a 7.04% pending indicative provide to purchase shares from RTL Group (a subsidiary of Bertelsmann).

price

The heightened menace of recession shouldn’t be sufficient to cease rising bond yields, which proceed to profit from constant will increase in rates of interest by most main central banks.

US yields are thus shifting to their highest since 2011, at 3.7806% for the ten-yr and 4.2183% for the 2-yr.

In the euro zone, German two-yr bonds jumped almost ten foundation factors to 1.975%, the very best since December 2008, and ten-yr bonds topped 2% for the primary time since 2013.

The latter retreated solely briefly after the flash PMI figures.

change

Flash European PMIs and a number of feedback on recession prospects solely prolonged the autumn within the euro and pound sterling. And the latter can also be affected by a pointy rise in price range deficit forecasts by the British authorities.

The euro thus fell 0.82% in opposition to the dollar to 0.9755, its lowest since 2002, and the pound sterling fell 1.99% to $1.1033, its lowest since 1985.

The dollar index, which measures the buck’s volatility in opposition to a reference basket, in contrast, rose 0.69%, the very best since May 2002.

The yen fell 0.51% after market intervention by Japanese authorities began a rebound of greater than 1% on Thursday.

the oil

Oil markets have as soon as once more bowed to the danger of a deterioration in world demand within the coming months, to which have to be added the appreciation of the dollar, which isn’t often unfavorable to uncooked supplies quoted within the American forex.

Brent fell 3.08% to $87.67 a barrel and US gentle crude (West Texas Intermediate, WTI) fell 3.5% to $80.57.

(Writing by Marc Angrand, Editing by Jean-Stephen Brose)

.

Leave a Reply

Your email address will not be published.