Europe may turn red after publication of PMI indices
PARIS (Reuters) – European stock markets fell again on Tuesday as Wall Street moved into the middle on fears of a recession, with monthly PMI indexes in the euro zone as in the United States pointing to further economic slowdown.
In Paris, the CAC 40 ended down 0.26% at 6,362.02 points. The British Footsie lost 0.61% and the German Dax lost 0.27%.
The EuroStoxx 50 index fell by 0.16%, the FTSEurofirst 300 by 0.48% and the Stoxx 600 by 0.42%.
Economic activity in the eurozone contracted for the second month in a row in August with the group PMI at 49.2, the weakest reading since February 2021, when the UK fell sharply.
In the United States, employment fell this month to the lowest level in 18 months, the PMI series came out at 45.0 against 47.7 in July, in relation to the decline in demand and the strength of money against the history of inflation.
Sales of new homes fell 12.6% in July to 511,000 units, the US Commerce Department announced on Tuesday.
The numbers pushed investors away from risk-taking ahead of US Federal Reserve Chairman Jerome Powell’s much-anticipated annual meeting in Jackson Hole on Friday.
AFFAIRS IN EUROPE
On the pan-European Stoxx 600, fundamentals (+2.55%) and energy (+3.15%) posted the biggest sector gains. Both sectors were supported by supply concerns, with Saudi Arabia reporting oil shortages while the shutdown of the Nord Stream 1 gas pipeline fueled fears of a longer shutdown amid the conflict in Ukraine.
Steel producer ArcelorMittal and oil company TotalEnergies led the CAC 40 with gains of 3.02% and 3.24%.
For reasons, Dassault Systèmes fell 2.4%, due to the decrease in the technology room, affected by the change in interest rates.
Elsewhere in Europe, German group Uniper rose 4.02% after announcing the restart of the Heyden 4 coal-fired power plant in North Rhine-Westphalia in anticipation of the shutdown of Nord Stream 1.
Ryanair achieved a 1.96% increase in passenger growth for the full year.
IN WALL STREET
At the closing time in Europe, the Dow Jones fell 0.38%, the Standard & Poor’s 500 was almost stable and the Nasdaq advanced 0.16% due to buying at a lower price after Monday’s sharpest performance in modern metals.
Amazon and Tesla earn 0.33% and 1.61% respectively.
In corporate news, Macy’s jumped 5.47% as the department store group’s profit beat expectations for the quarter, while Zoom Video Communications fell 15% after downgrading its full-year profitability and revenue management due to lower demand and increased competition.
On the foreign exchange market, the euro rose to 0.9974 dollars (+ 0.33%) after hitting a new 20-year high at 0.99005 per share. The single currency bounced back after new U.S. housing sales data.
The dollar, which has risen to its highest level since mid-July against other major currencies, lost 0.62% after the figures.
The yield on ten-year Treasuries fell nearly four basis points to 2.9961% after a five-week high of 3.039%.
“These numbers show a significant deficit, which shows that the economy has weakened significantly, and opens the way for the Fed to be less aggressive (as expected),” said Edward Moya, an analyst at OANDA.
In Europe, yields consolidated their last gains: the ten-year German Bund took almost two points to 1.32% while the two-year fell to 0.852% after touching on a new increase in the sector. %.
Oil prices are rising, led by the statement of the Ministry of Oil in Saudi Arabia, which recalled that OPEC had the means to raise prices by reducing its production.
Brent barrels rose 3.15% to 99.52 dollars a barrel and American light crude (West Texas Intermediate, WTI) 3.41% to 93.44 dollars.
(Written by Claude Chendjou, edited by Bertrand Boucey)