PARIS (Reuters) – European stock markets ended lower on Tuesday as investors digested the latest U.S. economic data ahead of Friday’s U.S. jobs report.
In Paris, the CAC 40 fell 0.93% to 7,575.1 points, while the German Dax fell 0.92% and the British Footsie 0.78%.
The EuroStoxx 50 index ended the session down 1.19%, while the FTSEurofirst 300 lost 0.99% and the Stoxx 600 fell 1%.
The ISM manufacturing indicator, published on Tuesday, confirmed the slowdown in activity in the primary sector. Above all, the continued decline in new orders, at their lowest since mid-2023, suggests a continued slowdown in activity.
“Overall, this ISM report contributes to the deteriorating trend in the US economy (…) and plays into the hands of those who have returned to duration and quality – both positions likely to be rewarded in such an environment,” explains Florian Ielpo, head of macro research at Lombard Odier IM.
Investors will nevertheless be attentive to the publication of the next indicators expected this week, and in particular the report on American employment on Friday, while the Federal Reserve will decide on its rates on September 18.
In fact, fears about persistent inflation have given way to fears about growth: investors are now worried about the impact of restrictive rates on activity on both sides of the Atlantic.
The Fed’s economic forecasts, which will be updated at its next meeting, will be key to understanding how much the central bank expects growth to slow, and whether a “soft landing” remains its primary scenario.
A WALL STREET
Wall Street fell in mid-session trading as investors worried about the outlook for US growth.
At the time of the European closing, trading on the New York Stock Exchange indicated a decline of 1.08% for the Dow Jones, against 1.4% for the Standard & Poor’s 500, and 2.16% for the Nasdaq Composite.
OIL
Crude prices fell sharply to their lowest since December as investors worried about the outlook for Chinese demand and a possible resumption of production in Libya, where extraction and exports have been at a standstill since militias clashed over the choice of a new central bank governor.
According to Bloomberg, the various factions are close to an agreement, which would allow production to return to its pre-crisis levels, 1.28 million barrels per day compared to 591,000 barrels per day on August 28.
Brent fell by 4.32% to $74.17 per barrel, while American light crude (West Texas Intermediate, WTI) weakened by 3.82% to $70.74.
VALUES
Nexans reached an all-time high and closed up 5.25%, following press reports of an agreement in principle between Greece and Cyprus on the Great Sea interconnector project linking the two countries and for which the French group had won the contract worth 1.43 billion euros.
Ubisoft closed down 5.39% as the video game company’s new titles underperformed.
Exosens gained 5.33%, the night vision specialist having declared on Tuesday that it was on track to reach its financial objectives.
Valneva gained 1.96%, posting one of the best performances on the SBF 120, after publishing new positive phase 2 data on its Lyme disease vaccine candidate on Tuesday.
Swiss Life reported better-than-expected half-year results on Tuesday and hit a high since 2001 early in trading, closing up 1.13%.
Watches of Switzerland jumped 6.16%, leading the Stoxx 600, as the group reported results in line with expectations.
Orsted rose 1.63% as the wind turbine maker secured offshore wind farm projects in the UK.
The energy and materials sectors fell 2.8% and 3.3% respectively, the worst sector performances in the Stoxx 600, as investors worried about weak Chinese demand.
RATE
Yields are down sharply as investors favour safe assets after a poor ISM indicator in the United States.
The yield on the German ten-year fell 6.4 bp to 2.274%, while the yield on the two-year rate fell 3.8 bp to 2.38%. At the time of the European close, the yield on the ten-year Treasury fell 6.1 bp to 3.85%, while the yield on the two-year bond fell 4.3 bp to 3.8837%.
CHANGES
The dollar is benefiting from its status as a safe haven currency and is gaining 0.16% against a basket of reference currencies, while the euro is eroding by 0.28% to 1.104 dollars and the pound sterling is losing 0.41% to 1.3095 dollars.
(Written by Corentin Chappron, edited by Blandine Hénault)
Copyright © 2024 Thomson Reuters
I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
