by Claude Chendjou

PARIS (Reuters) – European stock markets ended higher on Wednesday and Wall Street was also in the green at mid-session, the S&P 500 index having reached a record, in a movement of optimism before the publication of the report of the last meeting of the American Federal Reserve (Fed).

In Paris, the CAC 40 ended with a gain of 0.52% to 7,560.09 points. The British Footsie advanced 0.65% and the German Dax gained 1%.

The EuroStoxx 50 index rose by 0.68%, the FTSEurofirst 300 by 0.65% and the Stoxx 600 by 0.66%.

At the close in Europe, the Dow Jones gained 0.88% after reaching an unprecedented level at 5,790.43 points. The Standard & Poor’s 500 advances by 0.61% and the Nasdaq by 0.51%.

The majority of the main sectors of the S&P 500 are in the green, with industry (+0.86%) leading the rises.

Investors, who have been on the defensive since the publication of the monthly report on American employment on Friday, seem to be making a cautious return to risky assets ahead of the “minutes” of the Fed meeting on September 17 and 18 which will be published at 18:00 GMT.

Ben Laidler, head of equity strategy at Bradesco BBI, said he expected a reassuring report from the Fed meeting, as would the monthly consumer price index in the United States which will be published on Thursday.

Investors are currently pricing in a 25 basis point rate cut from the Fed in November, while the likelihood of a pause on borrowing costs is considered low, according to CME’s Fedwatch barometer.

The positive trend on Wall Street was reflected in Europe where the indices accelerated their closing gains, seeming to turn the page on the fears linked to the news from China the day before.

VALUES IN EUROPE

Kering gained 1.54% after the announcement of the appointment of Stefano Cantino as CEO of Gucci effective January 1, 2025.

Renault gained 3.30% thanks to positive comments from Stifel and other analysts on the diamond group.

Continental climbed 7.23%, the German equipment manufacturer having announced that it expected an improvement in its automotive activity in the third quarter.

Aixtron fell 3.36% after Deutsche Bank lowered its recommendation from “buy” to “hold” on the German semiconductor manufacturer.

British events organizer Informa rose 1.82%, supported by the confirmation of its outlook for this year.

CHANGES

The dollar rose 0.21% against a basket of international currencies before the publication of the Fed’s “minutes”, perhaps a sign that the market no longer believes in a new “aggressive” rate cut.

The New Zealand dollar fell on Wednesday to its lowest level since August 19, at 0.60705 dollars, penalized by the 50 basis point lowering of rates by the central bank of the New Zealand country (RBNZ).

The euro depreciated by 0.26% to 1.0951 dollars, while several officials of the European Central Bank (ECB) pleaded on Wednesday in favor of a further reduction in key rates in the euro zone.

The pound sterling is trading at $1.3093, down 0.20%.

RATE

Bond yields in the euro zone have struggled to find a clear direction, alternating between rising and falling, while several members of the ECB continue to speak before the institution’s next meeting, on October 17.

The ten-year German Bund yield ended with a gain of 1.1 basis points (bps), at 2.57%, after having fallen for a large part of the session. The two-year rate increased by 2.8 bps, to 2.258%.

The yield on ten-year US Treasuries rose 1.4 bps to 4.0491% at the close of trading in Europe.

OIL

The oil market is in decline with the increase in crude stocks in the United States last week, according to figures from the Energy Information Administration. This news takes precedence over the risk of supply disruption linked to the conflict in the Middle East and Hurricane Milton in the United States.

Brent lost 0.56%, to $76.74 per barrel, and American light crude (West Texas Intermediate, WTI) lost 0.35%, to $73.31.

METALS

Spot gold fell again, for the sixth consecutive session, by 0.33% to 2,613.37 dollars per ounce, with a session low of 2,605.07 dollars, in a context of downward revision of the rate of monetary easing by the Fed.

TO BE CONTINUED THURSDAY:

The publication of the consumer price index in the United States for the month of September

(Written by Claude Chendjou, edited by Zhifan Liu)

Copyright © 2024 Thomson Reuters