by Pauline Foret
(Reuters) – European stock markets ended mixed on Tuesday, benefiting from a period of respite as bond yields fell, while remaining cautious less than a week before the inauguration of Donald Trump.
In Paris, the CAC 40 ended up 0.2% at 7,423.67 points and the German Dax rose 0.64%. The British Footsie closed down 0.28%.
The EuroStoxx 50 index is up 0.48%, the FTSEurofirst 300 is down 0.03% and the Stoxx 600 is down 0.07%.
Investors were reassured this Tuesday by a less marked increase than expected in producer prices (PPI) in the United States, which increased by 3.3% year-on-year in December while analysts were counting on an increase of 3.4%.
The figure allowed bond yields to stabilize somewhat after their recent surge, easing pressure on equity markets, while a slight decline in oil prices also helped ease tensions.
This period of respite could, however, be short-lived if the consumer price index (CPI), which is to be published on Wednesday and is expected to increase by 2.9% over one year, were to surprise investors and revive prices. speculation about a possible premature end to the cycle of rate reductions initiated by the Federal Reserve in 2024.
“We received the PPIs today, and the rise was less sharp than expected, which was a real relief for the markets,” said Aneeka Gupta, equity strategist at WisdomTree.
“But I think we are all well aware that the big factor of change will be tomorrow’s data on inflation,” she added, specifying that bond yields remained at the heart of concerns.
The markets are also on alert less than a week before the inauguration of President-elect Donald Trump, while Bloomberg News reported Monday that his administration was considering a gradual implementation of the customs duties promised during the campaign to avoid a spike in inflation.
VALUES
Amundi takes 4.51% while according to the daily Il Messaggero, Crédit Agricole (+1.83%) should decide by May whether it wants Unicredit (+1.36%) to extend its partnership contract with Amundi .
NovoNordisk loses 3.44% after Eli Lilly (-6.5%) lowered its sales forecasts for drugs against obesity in the fourth quarter.
BP lost 2.79% after announcing that the drop in refining margins would reduce its fourth quarter profit by 100 to 300 million dollars (97.47 to 292.40 million euros).
JD Sports Fashion plunges 6.4% after a warning on its annual profit in a market presented by the sporting goods distributor as “difficult”.
A WALL STREET
On Wall Street, the main indices are almost stable despite the data on producer prices, investors being cautious before Wednesday’s indicators and the inauguration of Donald Trump.
At closing time in Europe, the Dow Jones gained 0.07% while the Standard & Poor’s 500 lost 0.06% and the Nasdaq Composite 0.09%.
In values, Eli Lilly plunged more than 7%, its worst fall in four years after announcing that it expected sales of its anti-obesity blockbuster Zepbound to be below expectations in the fourth quarter.
Boeing fell 2.23% after publishing its lowest number of annual deliveries since the COVID-19 pandemic.
CHANGES
The dollar fell against the euro this Tuesday but remains at particularly high levels pending data on consumer prices in the United States.
The greenback lost 0.61% against a basket of reference currencies, while the euro gained 0.49% against the dollar.
The pound sterling, still under pressure amid concerns about the British government’s finances, lost 0.45% against the euro.
RATE
Rates fell after the release of the latest producer price data, as investors were reassured that the Fed could be forced to end its cycle of reductions.
The yield on ten-year Treasuries fell 1.9 basis points (bp) to 4.7862%, and two-year Treasuries fell 3.3 bps to 4.3689%.
The ten-year German Bund yield, on the other hand, gained 3.1 bps to 2.6230% amid concerns about the customs duties promised by Donald Trump. The two-year rose by 2.6 bp to 2.3190%.
The British 30-year Gilt continues to flirt with the highs after reaching its highest level in 27 years on Monday, gaining 1.2 bps to 5.452%.
OIL
The recent surge in oil prices appeared to be calming on Tuesday although investors continued to focus their attention on the impact that new US sanctions on Russian oil will have on two of its main customers, China and India.
Brent lost 0.8% to $80.36 per barrel and American light crude (West Texas Intermediate, WTI) fell 1.17% to $77.90.
TO BE CONTINUED WEDNESDAY JANUARY 15:
Several indicators are expected on Wednesday, such as inflation and producer prices for the month of December in the United Kingdom, German GDP in 2024, industrial production for the month of November in the euro zone and CPI inflation as well as the “Empire State” activity indicator in the United States.
Wednesday will also mark the start of corporate earnings season on Wall Street. The big banks are leading the way with Citigroup, JPMorgan Chase, Blackrock, Wells Fargo, Goldman Sachs and Bank of New York Mellon.
(Some data may have a slight lag)
(Writing by Pauline Foret, edited by Kate Entringer)
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