by Pauline Foret
(Reuters) – European stock markets ended slightly lower on Tuesday as the corporate earnings season got into full swing, with the approach of the United States elections weighing on sentiment.
In Paris, the CAC 40 finished stable, gaining 0.06% to 7,535.10 points. The British Footsie lost 0.14% and the German Dax 0.13%.
The EuroStoxx 50 index also closed stable, losing 0.01%, the FTSEurofirst 300 0.17% and the Stoxx 600 0.18%.
The approach of the US presidential elections is worrying investors, as the race looks set to become increasingly close. Some market players, assuming that Republican candidate Donald Trump will win, have already started to take refuge in certain stocks considered “safe”, while the latest Reuters/Ipsos poll reports a minimal lead for Kamala Harris, at 46% against 43%.
All eyes are also on global central banks. With less than two weeks before the election in the United States, bets on a possible more aggressive rate cut by the Federal Reserve are in full swing. In Europe, Christine Lagarde declared at the annual meeting of the International Monetary Fund (IMF) that inflation in the euro zone could return to the 2% mark more quickly than expected.
“With the European economy looking so fragile, several consecutive rate cuts from the ECB and the expectation of a rate cut from the Bank of England, we will see a boost in confidence in businesses and among consumers,” said Danni Hawson, head of financial analysis at AJ Bell.
“At the moment there are a lot of moving parts and investors are trying to keep up.”
The results season is also progressing, with many companies exceeding analysts’ expectations, such as SAP, Saab and Morgan Sindall.
VALUES
In Paris, Eurofins lost 10.88% after missing its own nine-month forecast, falling to the bottom of the Stoxx 600.
Saab gained 7.41% after reporting an operating profit above expectations and confirming its annual outlook.
SAP gained 2.4%, after gaining nearly 5% earlier in the day, after raising its annual outlook, citing strong demand for its cloud computing services.
A WALL STREET
Wall Street is still in the red at closing time in Europe, with the Dow Jones losing 0.19%, the Standard & Poor’s-500 0.26% and the Nasdaq Composite 0.14%.
Philip Morris and General Motors both gain about 8.3% after reporting their third-quarter results.
Lockheed Martin lost 4.96% due to the impact of payments for its F-35 jets despite raising its forecasts on Tuesday.
TODAY’S INDICATORS
While no major economic indicators were released today, the International Monetary Fund’s semi-annual report on global financial stability was released, in which the IMF indicated that markets may underestimate the risks posed by the upcoming elections and armed conflicts.
The IMF also announced that it would raise its growth forecasts for the United States, the United Kingdom and France in 2024, while lowering those of China, Germany and the euro zone.
CHANGES
The dollar continued to advance on Tuesday, driven by expectations of a measured approach from the Federal Reserve to monetary policy and bets around the US presidential race.
The greenback gains 0.02% against a basket of reference currencies.
The euro lost 0.06% to 1.0808 dollars.
RATE
US bond yields fell slightly after hitting a record high on Tuesday, as speculation around the presidential elections and the possibility of a more aggressive Federal Reserve reduced demand for sovereign debt.
The ten-year Treasuries yield gained 2.8 basis points to 4.2096%, and the two-year treasuries gained 2.4 basis points to 4.0494%.
The yield on the ten-year German Bund gained 0.1 basis point to 2.3180%, with the two-year remaining stable at 2.1990%.
OIL
Oil resumes its growth on Tuesday, as investors try to assess the measures taken by China to revive its economy as well as the impact of the conflict in the Middle East.
Brent gained 2.26% to $75.97 per barrel and American light crude (West Texas Intermediate, WTI) gained 2.59% to $72.39.
TO BE CONTINUED ON WEDNESDAY:
Many corporate results are expected in Europe on Wednesday, including Kering, Air Liquide, Thales, Deutsche Bank, Roche, WPP and Volvo Car.
(Written by Pauline Foret, edited by Augustin Turpin)
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