by Claude Chendjou
PARIS (Reuters) – European stock markets ended lower on Monday and Wall Street was trading on a hesitant note at mid-session, with investors showing caution ahead of monetary policy announcements from several major central banks, including the US Federal Reserve ( Fed) and the Bank of England (BoE).
In Paris, the CAC 40 was penalized by the 12% fall in Société Générale shares, whose new general director Slawomir Krupa did not convince with his strategic plan, and ended down 1.39% at 7,276, 14 points. The British Footsie lost 0.76% and the German Dax lost 1.05%.
The EuroStoxx 50 index fell by 1.14%, the FTSEurofirst 300 by 1.04% and the Stoxx 600 by 1.13%.
In Europe, the optimism born last week from the prospect of an end to the rise in rates by the European Central Bank (ECB) gave way on Monday to new fears about the trajectory of the rates of the major central banks.
Several ECB officials such as Bostjan Vasle and Robert Holzmann stressed that a further increase in the cost of credit could not be ruled out, while Peter Kazimir said that we had to wait until spring to conclude that the peak in rates had been reached .
In Great Britain, where the BoE must make its decisions on Thursday, the market is awaiting a further increase in the main key rate to 5.50%, while in the United States, uncertainty remains over the Fed’s choice for the November meeting and beyond after the status quo scheduled for Wednesday.
“With inflation still well above the Fed’s 2% target, a further rate hike is certainly more likely than a rate cut, despite the markets’ fondest wishes,” Saira Malik wrote in a note. , investment manager at Nuveen.
Decisions from the Swiss, Norwegian and Japanese central banks are also expected this week, as well as monthly inflation figures in the euro zone and several European countries.
Société Générale (-12.05%) animated the exchanges in Paris, finishing at the bottom of the CAC 40 and showing one of the biggest drops in the pan-European Stoxx 600 index after the presentation of the bank’s 2026 strategic plan.
The technology compartment (-1.29%) also suffered with the rise in bond yields and the lowering of Nordic Semiconductor’s forecasts (-9.95%) for the current quarter.
The health index (-1.83%) was penalized by Lonza, the general manager Pierre-Alain Ruffieux having decided to leave the pharmaceutical laboratory at the end of the month, which raises concerns about the profit prospects of the band.
A WALL STREET
At the close in Europe, the Dow Jones advanced by 0.23%, the Standard & Poor’s 500 by 0.27% and the Nasdaq by 0.22% in a volatile session, marked by the decline of some of the major values technology and growth companies such as Nvidia (-0.39%) and Tesla (-2.75%).
Chip designer Arm Holdings, which made a successful debut on the Nasdaq last week, lost 5.54%, with Bernstein starting to track the stock at “underperformance” amid concerns for demand in the sector.
EXCHANGES The dollar index, measuring the fluctuations of the greenback against a basket of international currencies, approached its highest level in six months on Monday, at 105.32 points, before the decisions of the Fed, some experts, like Alvin Tan of RBC Capital Markets, believing that the American economy is more solid than that of Europe or Asia.
The euro is trading at $1.0686 (+0.29%) and the pound sterling at $1.2396 (+0.06%).
The ten-year German Bund yield ended up almost five basis points at 2.718% and the two-year yield also rose around five points to 3.262%.
In the United States, the yield on ten-year Treasuries reached an almost 16-year high, at 4.399%, the highest since November 2007. The two-year has returned above the 5% threshold.
The prospect of a drop in OPEC+ crude oil extraction for the end of the year combined with forecasts of strong demand in China is pulling the oil market, which is heading for a third session in a row in the green.
Brent rose 0.63% to $94.52 per barrel and American light crude (West Texas Intermediate, WTI) rose 1.16% to $91.82.
(Written by Claude Chendjou, edited by Bertrand Boucey)
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