Sharp decline in equities, lower yields

Sharp decline in equities, lower yields
Sharp decline in equities, lower yields

EUROPEAN SCHOLARSHIPS END IN RED

(Reuters) – European stock markets ended in the red on Tuesday and Wall Street widened its losses at mid-session against a backdrop of sharp decline in bond yields after mixed economic indicators.

In Paris, the CAC 40 finished down 0.91% to 6,507.48 points. The British Footsie lost 0.98% and the German Dax 0.96%.

The EuroStoxx 50 index fell by 1.01%, the FTSEurofirst 300 by 0.8% and the Stoxx 600 by 0.52%.

At the time of the close in Europe, Wall Street was moving lower, with the Dow Jones yielding 0.92%, the Standard & Poor’s 500 0.54% and the Nasdaq Composite .IXIC 0.13%.

The S & P-500 and the Nasdaq had set records in early trading but the trend quickly reversed, with caution picking up on the eve of the publication of the minutes of the last Federal Reserve meeting.

TODAY’S INDICATORS

In the United States, growth in activity in the service sector in the United States slowed more markedly than expected in June. The ISM services index fell to 60.1 from 64.0 in May, its highest level since the survey was created.

In the euro area, retail sales in the euro area in May exceeded expectations with a rebound of 4.6% on a month and 9% on a year and the ZEW index of investor sentiment in Germany, although that in decline, still foreshadows a solid recovery, but orders to German industry posted an unexpected drop in May.

VALUES

The unexpected drop in industrial orders in Germany penalized the automotive sector, whose Stoxx index fell 2.9%, its largest drop since May 4.

In Paris, Renault lost 2.9% and Stellantis 1.58% while in Frankfurt, Daimler, Volkswagen and BMW gave up between 3.7% and 4%.

The marked decline in bond yields also penalized bank stocks (-2.59%), such as BNP Paribas (-3.52%), ING (-3.46%) or Santander (-3.46%).

The most marked drop in the Stoxx 600 is for Alstom (-8.61%), which experienced its worst session since March 2020 after forecasts poorly received by analysts.

On the upside, the defensive sectors performed well: that of real estate took 0.78%, that of health 0.55%, that of utilities 0.36%.

CHANGES

The dollar is regaining ground against the other major currencies on the eve of the publication of the Fed’s report: it appreciates 0.4% against a benchmark basket and the euro falls back below 1.1820 dollars.

RATE

Eurozone benchmark yields fell to their lowest level in at least three weeks amid cautious global economic outlook.

That of the ten-year German Bund fell by nearly seven basis points to -0.274% in the wake of those of US Treasuries: that of ten-year Treasuries fell 6.9 points to 1.363%.

OIL

Oil prices fall, penalized by profit taking after the highest recorded in reaction to the postponement of discussions between OPEC + countries.

Brent lost 3.08% to 74.77 dollars a barrel and American light crude (West Texas Intermediate, WTI) lost 2.2% to 73.52 dollars.

Brent previously climbed to $ 77.84, the highest since October 2018, and WTI at 76.98, the highest since November 2014.

(Written by Kate Entringer, edited by Marc Angrand)

 
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