by Claude Chendjou

PARIS (Reuters) – European stock markets, excluding London, ended down on Monday after an unsuccessful attempt to continue the rebound that began on Friday, while on Wall Street, indices were slightly in the green at mid-session in a hesitant session.

The positive trend recorded in the morning thanks to support from the energy sector (+0.15%) ended up fading over the course of the session, with wait-and-see attitude taking over again as important monetary policy meetings, as well as results from stock market giants, are expected during the week.

In Paris, the CAC 40 ended down 0.98% at 7,443.84 points. The British Footsie, rich in hydrocarbon stocks, gained 0.08%, resisting the downward trend. The German Dax lost 0.49%.

The EuroStoxx 50 index fell by 0.97%, the FTSEurofirst 300 by 0.21% and the Stoxx 600 by 0.20%.

At the time of the European closing, the Dow Jones was stable (+0.01%), the Standard & Poor’s 500 was up 0.32% and the Nasdaq was up 0.46%, with gains being smaller than at the opening, in a session with mixed results.

The good initial performance of the “tech” index (+0.28%) and that of semiconductors (+0.7%) is also more measured while the financial accounts of Apple (+0.15%), Meta (+0.97%) and Amazon (+0.72%) among others are expected during the week.

VALUES IN EUROPE

Heineken fell 10.14% as the Dutch brewer reported operating profit for the first six months of the year that fell short of analysts’ forecasts. Carlsberg fell 4.32%.

Reckitt Benckiser, maker of Enfamil infant formula, closed down 8.76%, indirectly penalized by a court ruling against Abbott Laboratories on infant formula.

Philips rose 14.62% as the Dutch medical device maker reported better-than-expected quarterly results, helped by the implementation of its restructuring program.

Merck advanced 3.13% on the back of an increase in its annual forecasts, particularly after a solid operational performance in its healthcare division.

Natwest Group ended up 2.62% after Britain’s new Chancellor of the Exchequer Rachel Reeves announced on Monday that she would abandon the previous government’s plan to sell the bank’s shares publicly, saying the deal would be too costly for taxpayers.

Emeis (ex-Orpea) fell by 18.89% after revising downwards on Friday its range for growth in current operating profit before rental income (EbitdaR) for this year.

CHANGES

The dollar rose slightly (+0.23%) against a basket of reference currencies, while the euro lost 0.38%, to 1.0816 dollars.

The yen remains firm at 154 per dollar ahead of the Bank of Japan’s (BoJ) monetary policy decision, which is expected to raise its key interest rates by 10 basis points. The Japanese currency posted its best two-week performance so far this year last week, although it remains the worst-performing G10 currency in 2024.

RATE

The easing in the yield on 10-year US Treasury bonds, which stands at 4.1763%, is now more tenuous, on the eve of the two-day monetary policy meeting of the Federal Reserve (Fed). The market nevertheless continues to expect a rate cut in September and hopes that the Fed will provide signals in this direction.

The yield on the German Bund of the same maturity ended down about four basis points, at 2.359%.

The British two-year Gilt fell to 3.846% on Monday, its lowest level since May 2023, before the presentation on Tuesday by the new Minister of Finance of the first budget of the new government. The financial markets are also now anticipating with a probability of 58% a cut in the rates of the Bank of England (BoE) on Thursday, against a probability of 51% last Friday.

OIL

The oil market is falling as Israeli officials said Monday they wanted to punish Hezbollah after the attack on the Golan Heights while avoiding a “generalized war.”

Brent fell 1.97% to $79.53 per barrel and US light crude (West Texas Intermediate, WTI) fell 2.03% to $75.59.

TO BE CONTINUED TUESDAY:

(Written by Claude Chendjou, edited by Kate Entringer)

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