by Claude Chendjou

PARIS (Reuters) – Wall Street was up late Wednesday morning in New York, while the European stock markets extended their closing rally born from the hope of an end to the rise in interest rates by the major central banks after new indicators showing an easing of inflationary pressures.

In Paris, the CAC 40 ended with a gain of 0.33% to 7,209.61 points. The British Footsie advanced 0.62% and the German Dax gained 0.86%.

The EuroStoxx 50 index increased by 0.55%, the FTSEurofirst 300 by 0.42% and the Stoxx 600 by 0.42%.

At the close in Europe, the Dow Jones gained 0.33%, the Standard & Poor’s 500 0.20% and the Nasdaq 0.18%. Target, which soars 16.55% after announcing that it anticipates a profit well above expectations for the end-of-year holiday quarter, is livening up the discussions.

The previous day’s session on Wall Street had already been clearly in the green with the slowdown in monthly consumer prices (CPI) in the United States.

The decline in inflationary pressures in the United States was confirmed by the Department of Labor, which reported a more marked deceleration than expected in the increase in producer prices (PPI), to 1.3% over one year. in October.

The same phenomenon is observed in Europe with a slowdown in HICP inflation in France to 4.5% over one in October, to 1.8% in Italy and 4.6% in Great Britain.

At the same time, demand is weakening since industrial production in the euro zone fell by 6.9% year-on-year in September, according to Eurostat, while the European Commission lowered its growth forecast for the bloc this year to 0.6%.

In the United States, retail sales fell in October, by 0.1%, after an increase of 0.9% in September, suggesting that consumers are starting to feel the pressure exerted by interest rates. high interest rates from the US Federal Reserve (Fed).

Money markets now predict with a 100% probability a status quo on Fed rates in December, according to CME Group’s FedWatch barometer. They also expect a first drop in the cost of credit in the United States in May 2024.

VALUES IN EUROPE

Luxury stocks were sought after in Europe following the publication of Chinese statistics which showed better than expected retail sales and industrial production. Kering, LVMH and Richemont advanced from 0.50% to 1.71% with the luxury sector gaining 0.98%.

In the automobile sector, up 1.22%, Renault gained 2.27%, the car manufacturer having announced that it wanted to more than double the sales of its new electric entity Ampère with 7 vehicle models.

UBS ended up in the green (+2.26%) after obtaining a new trial in the case in France where it was ordered to pay 1.8 billion euros for illegal bank canvassing and laundering of aggravated tax fraud.

On the downside, Alstom fell by 15.03%, penalized by the announcement of a capital increase project, while Alcon fell by 5.35% after a lowering of its annual forecasts.

TODAY’S INDICATORS

The unemployment rate in France, calculated according to the standards of the International Labor Office (ILO), increased by 0.2 points in the third quarter, to 7.4%, according to INSEE data.

Manufacturing activity in the New York region, as measured by the Empire State index, rebounded unexpectedly in November, to 9.1 after -4.6 in October.

CHANGES

The dollar rose 0.26% against a basket of reference currencies after its sharp fall the day before, which sent the American currency to a two-month low. The rebound of the greenback can also be explained by the retail sales figures in the United States which showed a less marked decline than expected in October.

The euro stands at 1.0843 dollars (-0.33%) and the pound sterling at 1.2417 dollars (-0.64%).

RATE

Eurozone bond yields also rebound after US retail sales statistics suggest the US economy remains resilient.

The yield on ten-year Treasuries gained 11 basis points, to 4.553%, after having lost 18 points the day before.

Its German equivalent of the same maturity ended up around three points, at 2.644%, after a decline of almost 12 basis points on Tuesday.

OIL

Oil prices are falling under the effect of a greater than expected increase in crude stocks in the United States last week and record American oil production: Brent fell by 0.7% to 81.89 dollars. per barrel and light American crude (West Texas Intermediate, WTI) by 1.04% to $77.45.

(Written by Claude Chendjou, edited by Bertrand Boucey)

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