by Claude Chendjou

PARIS (Reuters) – European scholarships finished in green Thursday and Wall Street was also on a positive note at mid -session after the American Federal Reserve (Fed) said new drops in guiding rate by the end of the year.

In Paris, the CAC 40 ended on a gain of 0.87% to 7,854.61 points. The British footsie advanced 0.29% and the German Dax increased by 1.33%.

The Eurostoxx 50 index won 1.61%, the FTSEUROFirst 300 0.85%and the Stoxx 600 0.79%, mainly pulled by the new technology compartment (+4.09%).

At the time of the fence in Europe, the Dow Jones advances 0.34%, the Standard & Poor’s 500 of 0.65%and the NASDAQ of 1.10%, these last two indices registered records. They are carried in particular by Intel which flies away 28.69% thanks to the announcement of an investment in Nvidia (+3.26%) in the semiconductor manufacturer in difficulty. The semiconductor compartment with Wall Street jumped almost 4%.

Beyond Intel, the appetite for the risk to Wall Street is mainly powered by the Fed forecasts on the evolution of borrowing costs. Intermediaries, like Citigroup, Wells Fargo, Goldman Sachs, JPMorgan or Nomura, believe Thursday that the American central bank will reduce its rates of at least 50 base points in total in October and December after the drop in a quarter of a point decided on Wednesday.

Still monetary plan, pending the decision on Friday of the Bank of Japan (BOJ) on Friday, the Bank of Norway (Norges Bank) followed on Thursday the PAS of the Fed with a drop of 25 basis points, while the Bank of England (BOE) chose the status quo.

A sign of market enthusiasm in Europe, the volatility index on the Euro Stoxx 50, the VSTOXX, ended more than 8%, to around 15 points.

Values ​​in Europe

Bolloré fell 2.97% after publishing a turnover down 3% at constant perimeter and changes under the first half.

Next reflected by 3.54%, the British fashion distributor having said to expect a slowdown in the growth of its sales in the United Kingdom in the second half.

Continental plunged 21.98% while the German tire manufacturer saw himself with his car division, baptized Aumovio, who made his entry on the Frankfurt Stock Exchange at 35 euros per share.

Novo Nordisk climbed 6.22%, the Danish laboratory ensuring that its Wegovy pill allows weight loss comparable to the injectable version.

The Swiss Packaging Group GIS Group won 22.77% after a warning on its annual results and the suspension of the dividend.

Mediobanca advanced 0.24% while Alberto Nagel, its longtime director general, resigned Thursday after taking control by Monte Dei Paschi (MPS) (+0.47%) of the Italian bank.

The indicators of the day

The conditions of activity in the Philadelphia region improved much more than scheduled in September with a “Philly Fed” index at 23.2 after -0.3 in August, shows the monthly investigation of the local antenna of the Federal Reserve.

Unemployed registration decreased in the United States last week, to 231,000 against 264,000 (revised) the previous week, according to the Department of Labor.

Changes

The dollar has strengthened, by 0.51%, faced with a basket of reference currencies, after having dropped the day before a hollow since February 2022 immediately after the Fed decision, the causants diverging on the interpretation of the message of the American Central Bank.

“In the coming months, it risks being increasingly difficult for the Fed to reconcile its two objectives, with the risk of stagflation which is looming for the American economy,” writes Sylvain Bersinger, economist and founder of Bersingéco.

The euro fell 0.22%, to 1.1786 dollars, after touching a summit the day before since June 2021 to 1,19185.

The Sterling book is exchanged at 1.3556 dollars, withdrawn by 0.51%, after the Boe’s decision. The British currency had reached its highest level on Wednesday since July 2, at 1.3726 dollars.

RATE

The yield of American treasury bills at ten years rises from 3.6 basic points (PB), to 4.1121%, after the figures for weekly unemployed registrations, while investors continue to assess the rate trajectory across the Atlantic.

That of the German Bund, the same -term, ended up 3.8 basic points, to 2.7155%, while the Bundestag approved the 2025 budget on Thursday which opens the way to new expenses aimed at stimulating the economy and strengthening the defense.

In France, where a massive mobilization at the call of the unions caused some clashes, the yield of the OAT at ten years took almost four points at the end, at 3.5254%, after being briefly established at the same level as that of Italy, at 3.4755%.

The Spread between the Bund and the OAT remained above 80 base points, close to the six-month summit when it had reached 84 bp.

The British Gilt yield at ten years has advanced about four base points to 4.665%, after the Bank of England’s decision to maintain its rates and slow down the pace of its quantitative tightening program.

OIL

The oil market is withdraw against the background of concern for the American economy, the drop in Fed rates is not enough to calm the fears while the labor market is weakening and the construction of housing in the United States has dropped in August at its lowest level in almost two and a half years.

The Brent refused 0.53% to 67.56 dollars per barrel and light American crude (West Texas Intermediate, WTI) from 0.64% to $ 63.62.

To be continued Friday:

The situation on the markets

(Some data may accuse a slight offset)

(Written by Claude Chendjou, edited by Blandine Hénault)

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