Stocks are suffering from rates and recession fears
By Claude Chenjou
PARIS (Reuters) – Wall Street is expected to open lower on Wednesday and European stocks are also expected to be in the red mid-session, the trend remaining cautious for a fourth straight session amid fears of a quick recovery in interest rates and interest rates. economic deterioration after two major American banks warned that the US economy would contract next year.
New York index futures showed Wall Street down 0.27% for the Dow Jones, 0.48% for the Standard & Poor’s 500 and 0.76% for the Nasdaq.
In Paris, the CAC 40 fell 0.48% to 6,655.47 around 12:20 GMT. In Frankfurt, the Dax index lost 0.45%, and in London, the FTSE lost 0.05%.
Pan-European FTSEurofirst 300 index fell by 0.6%, EuroStoxx 50 by 0.49% and Stoxx 600 by 0.64% in the euro area.
Bank of America on Tuesday estimated that the US economy could record a three-quarter contraction next year, and JPMorgan Chase, for its part, expects a recession that could be “soft” or “open”.
The forecasts come on top of ten new measures to ease health restrictions introduced by China this Wednesday after unprecedented demonstrations against its “zero COVID” policy.
“There’s a sense of nervousness in the markets today. Last night’s sell-off on Wall Street (stocks) has spread to markets around the world,” said Victoria Scholar, chief investment officer at Interactive Investor. the end of the year.
“The markets are not yet out of the woods with adverse elements such as the gas crisis, inflation, monetary tightening and the threat of recession,” he adds.
Investors are also gearing up for a series of central bank decisions from the US Federal Reserve (Fed) and the European Central Bank (ECB) next week, starting at 15:00 GMT with the Bank of Canada. .
According to today’s economic data, China’s imports and exports fell more sharply than expected in November amid weaker global demand and the COVID-19 outbreak.
In Europe, France’s trade deficit reached -12.15 billion euros in October, while in Germany, German industrial production fell by 0.1% in October.
Eurozone economic growth in the third quarter was slightly stronger than previously announced, up 0.3% from the second quarter and 2.3% over the year, according to data published by Eurostat.
VALUES IN EUROPE
Up 0.55%, the healthcare sector offered some support to stocks in Europe, while basic resources (-2.03%) and energy (-1.90%) posted some of the biggest declines in the Stoxx 600 on fears about the global economy.
Oil companies TotalEnergies, BP and Eni fell from 1.28% to 1.57%, while mining groups Anglo American, Glencore, Rio Tinto and Eramet fell from 1.49% to 2.73%.
Sanofi (+5.62%) and GSK (+7.52%) are shining in the stock market after a favorable court ruling on Zantac, a stomach acid treatment accused of being carcinogenic.
The cancellation of Airbus delivery forecasts for this year was sanctioned, with the move down 2.86%.
RATE
Bond yields lack a clear direction after a new ECB survey showed consumer inflation expectations in the Eurozone 12 months ahead were revised up again to 5.4% in October.
Eurozone interbank lending rate (ESTR) futures contracts point to a peak of around 2.75% in June 2023, versus 2.9% in late November-August 2023.
The yield on the ten-year German Bund, the benchmark for the entire eurozone, fell nearly a basis point to 1.80%, while the two-year yield fell three basis points to 2.02%.
The yield on ten-year US Treasuries rose nearly three points to 3.54%, while the two-year yield was unchanged at 4.35%.
CHANGES
The dollar is almost stable against a basket of reference currencies (-0.08%).
The euro rose to $1.0501 (+0.31%) after falling in early trade.
The “offshore” yuan rose 0.25% to 6.978 per dollar in reaction to the announcement of an easing of health restrictions in China, but disappointing foreign trade figures capped gains.
OIL
Oil prices are nearing year-lows on recession fears: Brent fell 0.05% to $79.31 a barrel, US West Texas Intermediate (WTI) rose 0.03% to $74.27 a barrel.
(Writing by Claude Chendjou, Editing by Kate Entringer)
