PARIS (Reuters) – European stock markets ended lower on Wednesday as investors digested the latest data from the United States suggesting economic activity is slowing across the Atlantic.
In Paris, the CAC 40 fell 0.98% to 7,500.97 points, while the German Dax fell 0.83% and the British Footsie declined 0.35%.
The EuroStoxx 50 index ended the session down 1.35%, while the FTSEurofirst 300 lost 1.12% and the Stoxx 600 fell 1.03%.
Job openings, a gauge of demand for jobs, were much weaker than expected in July, according to JOLT data. On Tuesday, the ISM survey of manufacturing activity confirmed the slowdown in the sector and suggested it could persist, rekindling concerns about U.S. economic momentum.
These indicators, along with the next ones expected this week, are essential to the trajectory of rates because the Federal Reserve confirmed at the Jackson Hole symposium in August its commitment to supporting employment.
However, the “soft landing” scenario favored by investors seems to be moving away. While rate cuts motivated by slowing inflation would benefit risky assets, cuts triggered by too strong a slowdown would weigh on stocks, since investors would see them as a decline in corporate profits.
The next indicators scheduled for this week will therefore be eagerly awaited. In particular, the monthly employment report on Friday will allow us to quantify the extent of the slowdown in the US employment market.
A WALL STREET
Wall Street is hesitant at mid-session, with investors digesting the latest indicators published across the Atlantic.
At the time of closing in Europe, trading on the New York Stock Exchange indicated a 0.21% increase for the Dow Jones, against a stable Standard & Poor’s 500 and a rise of 0.11% for the Nasdaq Composite.
VALUES
Nvidia’s decline dragged European technology stocks down with it. The technology sector declined 3.2%, the worst sector performance in the Stoxx 600 index.
STMicroelectronics lost 1.5%, while Infineon dropped 3.7%. ASM International fell 5.3%, while ASML fell 6%, pressured by a UBS rating cut.
The luxury sector in Europe suffered from poor growth prospects in China. LVMH finished at the bottom of the CAC 40, losing 4%, compared to 6% for Richemont and 3.2% for Dior.
Swedish carmaker Volvo Cars on Wednesday abandoned its goal of going all-electric by 2030 and ended down 5.4%.
Commerzbank fell 2.4% as the German state announced plans to reduce its stake in the bank.
Saipem, an Italian energy engineering group, announced on Tuesday evening that it had won two offshore contracts in Saudi Arabia and rose by 2.4%.
RATE
US yields fell as investors favoured safe assets amid economic uncertainty.
The yield on the German ten-year bond fell by 7 bp to 2.214%, while the two-year rate fell by 5 bp to 2.311%.
At the time of the European close, the yield on the 10-year Treasury fell by 5.5 bp to 3.7892%, while the yield on the two-year note fell by 9.5 bp to 3.793%.
CHANGES
The dollar is falling as traders worry about the poor economic outlook in the United States.
The greenback fell 0.43% against a basket of benchmark currencies, the euro rose 0.34% to $1.1081, and the pound strengthened 0.26% to $1.3145.
OIL
Crude prices are falling after poor US data, as OPEC considers delaying its planned October production increase.
Brent fell by 0.45% to $73.42 per barrel, while US light crude (West Texas Intermediate, WTI) weakened by 0.5% to $69.99.
(Written by Corentin Chappron, edited by Blandine Hénault)
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