PARIS (Reuters) – European stock markets ended dispersed on Wednesday, with markets positioning themselves before the next meeting of the Federal Reserve on Wednesday, and driven by numerous results publications.
In Paris, the CAC 40 lost 0.27% to 7,656.75 points, while the German Dax fell by 0.46% and the British Footsie by 0.28%.
The EuroStoxx 50 index ended the session down 0.33%, against a stable FTSEurofirst 300 and Stoxx 600.
The Fed’s next decision, which will be announced at 7:00 p.m. GMT, constitutes the main event of the week for investors, awaiting new indications on the trajectory of the American economy in 2024.
LBPAM strategists summarize the challenges of an expected meeting without surprises.
“In recent months, inflation has continued to decelerate, which should reassure the Fed. However, it still remains difficult to separate the effects associated with the disappearance of temporary factors from those which are not. This week, we will see whether the Fed thinks its battle against inflation has been won or whether it remains more cautious,” summarize the strategists.
The markets were also driven by several indicators on Wednesday. Inflation in France and Germany notably fell more than expected in January, while the ADP indicator of private job creation in the United States increased less sharply than expected at the start of 2024.
The results of Microsoft and Alphabet, two of the “magnificent seven” whose performance helped support the American markets in 2024, also disappointed investors on Wednesday, putting pressure on indices exposed to technology.
Investors will have to wait until the end of the week to take a breather. On Thursday the next monetary policy decision of the Bank of England will be announced, as well as inflation in the euro zone for January, while the monthly report on American employment is expected on Friday.
The results of Apple, Amazon and Meta, three of the “magnificent seven”, will be announced on Thursday.
RATE
Yields collapsed on both sides of the Atlantic ahead of an expectedly accommodative US monetary policy meeting, and after several indicators pointing to slowing European and US inflation.
At the close of the European interest rate markets, the yield on the ten-year Treasury declined by 9.4 bp to 3.9634%, compared to a fall of 12.8 bp for the two-year rate, to 4.2314%.
The German ten-year yield fell 11.1 bps to 2.162%, while the two-year yield fell 11.3 to 2.4139%.
VALUES
Vivendi gained 1.60% after its supervisory board approved the plan to split its activities.
Novo Nordisk announced better than expected figures for its last quarter, and gained 3.56%. GSK’s forecast pushed the stock up 1.96%, while Novartis’ fourth quarter pressured the stock, which ended down 3.45%.
H&M surprised the market by announcing a change of CEO amid slowing sales and lost 12.37%.
Vodafone lost 2.08% after the group announced the rejection of Iliad’s revised proposal on the merger of their subsidiaries in Italy.
A WALL STREET
Wall Street appears mixed at closing time in Europe, under pressure from disappointing results for tech companies and investor caution ahead of the next Fed meeting.
At closing time in Europe, trading on the New York Stock Exchange indicated a stable Dow Jones, compared to a drop of 0.8% for the Standard & Poor’s 500 and 1.46% for the Nasdaq Composite.
Microsoft lost 1.32% and Alphabet 6.18%.
CHANGES
The dollar falls before the next decision of the Federal Reserve, which should confirm the continuation of the disinflation process.
The dollar lost 0.2% against a basket of reference currencies, while the euro gained 0.14% to 1.0855 dollars. The pound sterling strengthened by 0.24% to $1.2728.
OIL
Crude fell during the session but could post its first monthly gain since September. Manufacturing activity in China contracted for the fourth consecutive month, data showed Wednesday.
Brent fell 1.38% to $81.73 per barrel, American light crude (West Texas Intermediate, WTI) fell 2.67% to $75.74. Over the month of January, Brent could increase by 6.32%.
(Written by Corentin Chappron, edited by Zhifan Liu)
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