by Claude Chendjou

PARIS (Reuters) – European stock markets ended in mixed order on Friday, while Wall Street was in the red late morning in New York amid questions about the extent of future rate cuts by the American Federal Reserve which meets next week.

In Paris, the CAC 40 ended with a gain of 0.04% to 8,164.35 points, close to its historic peak of 8,218.07 points. The German Dax fell 0.03%, while also remaining near its record of 18,039.05 points. The British Footsie fell by 0.2%.

The EuroStoxx 50 index lost 0.14% the day after reaching an unprecedented peak of 5,031.82 points. The FTSEurofirst 300 dropped 0.24%. The Stoxx 600 fell 0.19% after an all-time high of 509.31 points on Thursday.

Over the week as a whole, the CAC 40 posted a gain of 1.69% and the Stoxx 600 an increase of 0.43%.

At the close in Europe, the Dow Jones fell by 0.72%, the Standard & Poor’s 500 by 0.88% and the Nasdaq by 1.24%.

Eight of the eleven major sectors of the S&P-500 are in the red, with the new technologies sector (-1.57%) showing the biggest decline, notably Adobe (-14.15%) whose results disappointed, while Microsoft gives up 2.88%.

The session was marked by a consolidation of indices which are at record levels and volatility linked to the “three witches”, the expiry of options and futures contracts.

The Vix index on Wall Street jumped 7.63% to 15.5 points, very close to the threshold reflecting strong nervousness on the markets.

The likelihood of a Federal Reserve rate cut in June fell Friday to about 55% from nearly 75% last week, according to CME Group’s FedWatch barometer.

“The first planned rate cut could take place in June, but we would not be shocked to see it postponed until later in the year if (macroeconomic) data continues to be positive, as has been the case recently ” said Carol Schleif, chief investment officer at BMO Family Office.

VALUES IN EUROPE

In Europe, telecoms (+1.47%) and real estate (-1.96%) dominated the news with on the one hand the fall of the German group Vonovia (-10.55%) which suffered a significant annual loss, and on the other hand, a merger operation in Italy between Fastweb, a subsidiary of Swisscom (+4.88%), and Vodafone Italia, owned by Vodafone (+5.68%).

In Paris, the pharmaceutical laboratory Euroapi collapsed by 17.50% after the suspension of its recent outlook for 2024.

TODAY’S INDICATORS

The consumer price index harmonized with European standards (HICP) slowed less than expected in February, to 3.2%, according to final official data.

Industrial production in the United States posted an increase above expectations in February, of 0.1%.

American household morale has deteriorated slightly since the beginning of March, to 76.5, according to the first results of the University of Michigan survey.

CHANGES

The dollar advances 0.06% against a basket of reference currencies and is heading towards a weekly gain (+0.6% at this stage) after three weeks in a row in the red.

The euro also nibbles 0.06%, to 1.0887 dollars, despite Olli Rehn’s statements on Friday that the European Central Bank began a discussion last week on the appropriate timetable for a rate cut. Gabriel Makhlouf, another ECB official, indicated on Friday that the Frankfurt institution should be able to ease its monetary policy in June.

RATE

In the wake of tensions on bonds in the United States, the yield on ten-year Treasuries having risen to 4.322%, that of the German Bund of the same maturity ended up 1.8 basis points, at 2.444%. The increase is even clearer on the German two-year, which ended with a gain of 2.7 points, at 2.651%.

Sovereign yields reacted to mixed data published in the United States which generally showed an economy still resilient, making a cut in key rates less urgent.

OIL

Oil prices were stable on Friday the day after Brent reached its highest level since November, reaching $85. The oil market should record a gain of more than 3% over the week as a whole in anticipation of an increase in demand during the summer in the United States.

At the close of stock markets in Europe, Brent nibbles 0.05% to 85.38 dollars per barrel and American light crude (West Texas Intermediate, WTI) 0.14% to 81.15 dollars.

(Written by Claude Chendjou, edited by Sophie Louet)

Copyright © 2024 Thomson Reuters