PARIS (Reuters) – European stock markets ended mixed on Monday after PMI indicators were considered disappointing, but encouraged by the accommodating positioning of central banks.
In Paris, the CAC 40 lost 0.48% to 7,013.73 points, while the German Dax fell 0.35% and the British Footsie finished stable
The EuroStoxx 50 index ended the session down 0.38%, compared to 0.16% for the Stoxx 600 and a stable FTSEurofirst 300.
Investors are torn between an encouraging rate outlook and a slowdown in the European economy, which could worsen in the fourth quarter.
The publication of PMI indicators on Monday, the contraction of which worsened in the euro zone, thus revived fears of negative growth in the fourth quarter for the bloc, which would then tip into recession. Investors are nevertheless encouraged by the latest central bank decisions. The European Central Bank thus kept rates unchanged during its last monetary policy meeting, as did the Federal Reserve, and money markets are now betting that rates have reached their ceiling on both sides of the Atlantic.
Assets are therefore consolidating after having rebounded last week, especially since the week, poor in publications and indicators, encourages a wait-and-see attitude.
“The combination of less aggressive speeches from central banks during their last meetings and weaker economic data contributed to a sharp drop in long-term rates and a rebound in equities,” note LBPAM strategists.
“This is in line with our scenario (of a gradual slowdown in the United States), but we think the adjustment has been rapid and that the rate cut and stock rebound could be slower from now on .” Jerome Powell, Chairman of the Fed, will speak this week with several other American monetary policy makers. Walt Disney, Instacart and Biogen will also publish their quarterly results this week.
Airline stocks rose after Ryanair said it expected a record annual profit this year, easing investors’ concerns over a possible fall in fares over the winter. The British group increased by 5.33%, while Air France-KLM gained 0.14%, and Easyjet 1.23%.
Telecom Italia dropped 3.35% after the announcement on Sunday of the approval by the board of directors of the telecom operator of the sale of its fixed network to the private equity fund KKR, a decision contested by its main shareholder Vivendi which declined by 1.41%.
The rise in bond yields weighed on the real estate sector, which lost 2.91%.
A WALL STREET
Wall Street is rising after a weaker-than-expected jobs report and a pause in the Fed’s rate hikes, which are unlikely to progress further, according to money markets.
At closing time in Europe, trading on the New York Stock Exchange indicated an advance of 0.14% for the Dow Jones, compared to 0.13% for the Standard & Poor’s 500 and 0.23% for the Nasdaq. Composite.
European bond markets are falling after strengthening sharply last week, with the yield on the 10-year German Bund hitting a seven-week low.
At the close of the European interest rate markets, the ten-year Treasury yield rose 9.3 bps to 4.6514%, while the two-year rate rose 7.1 bps to 4.9031%.
The German ten-year yield jumped 10.1 bps to 2.737%, while that of the two-year rate strengthened by 5.9 bps to 3.092%.
The dollar is stable as traders digest the implications of the latest Fed meeting.
The dollar is standing still against a basket of reference currencies, while the euro is nibbling 0.13% to 1.0743 dollars. The pound sterling gained 0.11% to 1.2388 dollars.
Crude prices are rising after Saudi Arabia and Russia reaffirmed over the weekend that they would maintain their production cuts until the end of the year.
Brent rose 1.45% to $86.12 per barrel, American light crude (West Texas Intermediate, WTI) rose 1.7% to $81.88.
(Written by Corentin Chappron, edited by Kate Entringer)
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