Europe ends in green after mixed statistics
By Claude Chenjou
PARIS (Reuters) – European stock markets outside London managed to close in the green for a fifth straight session on Tuesday, defying a late-morning drop in the Dow Jones and mixed Chinese economic statistics in New York. showing a slowdown in the country’s growth, especially in the fourth quarter.
In Paris, the CAC 40 ended with an increase of 0.48% to 7,077.16 points. The German Dax gained 0.35%. On the other hand, the British Footsie fell 0.12%, penalized by consumer values.
The EuroStoxx 50 index rose by 0.42%, and the FTSEurofirst 300 rose by 0.31%. The Stoxx 600, which has been carried since the beginning of the year on the hope of a calm in interest rates, gained 0.40%, marking its fifth consecutive session of gains.
China’s gross domestic product (GDP) growth of 3.0% in 2022 was one of the weakest in nearly 50 years amid health restrictions and a crisis in the real estate market, according to today’s statistics, but this growth is expected to rise to 4.9%. can rise. A year since the “zero COVID” policy ended, according to a Reuters poll.
Industrial production in China, in turn, slowed to 1.3% year-on-year in December, while retail sales in the country fell 1.8% last month after -5.9% in November.
“The economy was initially expected to take a big hit, but December’s numbers (…) show a more modest impact,” wrote Craig Erlam, market analyst at OANDA.
“This may give hope that the first few months of the new year will not be as bad as we initially feared,” he added.
VALUES IN EUROPE
In Europe, the basic resources sector exposed to China topped the Stoxx 600 with a gain of 1.13%. The transport and leisure sector (+0.83%) was also searched.
In individual values, LVMH, whose market capitalization briefly crossed the 400 billion euro mark for the first time during the session, gained 0.59% at the close.
Engie fell 5.47% as Bank of America downgraded its recommendation on the stock to “underperform” from “buy.”
Ocado (-9.28%) weighed on Britain’s Footsie as the online supermarket joint venture with Marks & Spencer reported slowing demand amid rising living costs in the run-up to Christmas.
ON WALL STREET
At the close in Europe, the Dow Jones lost 0.99%, the Standard & Poor’s 500 lost 0.065% and the Nasdaq lost 0.08% in a volatile session marked by mixed corporate earnings and economic data.
“I think it’s a combination of some small profit taking after a really big rally last week and the news coming out of China,” said Peter Cardillo, chief economist at Spartan Capital Securities.
The stock market fell 6.95% after Goldman Sachs posted lower-than-expected quarterly earnings, weighing on the Dow Jones. Morgan Stanley limited losses, rising 6.28% in response to better-than-expected fourth-quarter earnings.
Elsewhere, Microsoft, in the red, is dragging down the Nasdaq as Guggenheim cut the stock from “neutral” to “sell” after warning of disappointing full-year profit forecasts.
According to data from Refinitiv, profits of S&P-500 companies are expected to decline by an average of 2.4% in the fourth quarter.
Apple (+0.84%), which announced new Mac computers equipped with M2 chips on Tuesday, and Tesla, which rose 5.49%, offer some support for the indices.
SHOWS OF THE DAY
Manufacturing activity in the New York area registered a sharper-than-expected decline in January, with the Empire State index at -32.90 after -11.2 in December.
In Germany, German investor sentiment returned to positive territory for the first time since February, with the ZEW index at 16.9 in January after -23.3 in December. German employers’ federation BDI, however, forecasts a contraction of 0.3% in the gross domestic product of the first economy in the euro zone.
UK wage growth experienced one of the strongest accelerations in the three months to the end of November, up 6.4% over the year, according to official data.
The pound is trading at a five-week high against the dollar at $1.22615, up 0.54% after UK payrolls statistics.
The Japanese currency, which has gained nearly 5% since January 6th, is moving towards a seven-month high against the US currency on expectations that the Bank of Japan (BoJ) will adjust its monetary policy after its meeting on Wednesday. It sells for 128.18 yen per dollar.
In turn, the euro fell by 0.24% to $1,079, and the dollar rose by 0.13% against a basket of 6 reference currencies.
European bond yields fell sharply after Bloomberg reported that a rate hike of just 25 basis points was on the table in March after the European Central Bank (ECB) had expected a 50 basis point hike in February.
The ten-year German Bund yield eventually lost 10.7 basis points to 2.08%, and the two-year fell 11.1 points to 2.46%.
In the US, the yield on ten-year US Treasuries was flat at 3.51%.
Oil prices, which rose to a two-week high, were supported by hopes that demand in China would pick up again despite the day’s readings.
Brent rose by 1.63% to $85.84 a barrel, while American light oil (West Texas Intermediate, WTI) increased by 0.49% to $80.25.
(Written by Claude Chendjou)