(Paris) Global stock markets were flat ahead of US inflation and corporate earnings indicators, a backdrop for higher rates and lower equities.
Posted at 12:31 p.m.
Down sharply in early trading, Wall Street caught up around 11:55 a.m. with gains of 0.85% for the Dow Jones, 0.16% for the S&P 500 while the NASDAQ was stable.
The European indices continued to decline: Paris lost 0.13%, Frankfurt 0.43%, Milan 0.87% and London 1.06%.
The geopolitical environment weighed in particular on the stock market trend after the Kremlin said on Tuesday that it expected more “confrontation” with the West, before an emergency virtual G7 summit scheduled for the day and devoted to the Russian bombardments of large scale in Ukraine.
Separately, “my investors are nervous ahead of this week’s inflation data, calls for monetary policy tightening from the U.S. Central Bank will lead to more aggressive hikes beyond November” in the benchmark rate. institution, estimates Craig Erlam, analyst of Oanda, for which “we could attend a new cycle of important sales. »
This mood is reinforced by the autumn report of the International Monetary Fund (IMF) on the world economy. It maintained its growth forecast for 2022 at 3.2%, already revised three times this year, but again lowered that expected for 2023, this time to 2.7%, i.e. 0.2 points less than the previous revision. in July.
Crucial data of the week, the consumer price index (CPI) expected Thursday in the United States, which should rise again above 8% year-on-year for the seventh consecutive month.
Since March, the US Federal Reserve has vigorously raised its key rate to tighten financial conditions in order to compress demand and curb inflation. In its report, the IMF also encouraged central banks to “act resolutely” to lower inflation.
The market is starting to see signs of some price reduction, but given the robustness of the US job market, it expects a further rise in rates in November in the United States.
On the monetary front, the Bank of England intervened again on Tuesday in the face of the “dysfunctions” of the markets and the risks of “financial instability”, but without succeeding in reassuring investors and significantly lowering the rate of interest on long-term British debt.
In France, the rate of the 10-year loan exceeded its previous peak of the year in session, at the end of September, to reach a new high for 10 years, before falling again. The US rate touched 3.97% in early US trading before falling to 3.89% around 11:50 a.m.
Givaudan results not by perfume
Shares of Swiss group Givaudan fell 6.80% in Zurich, weighed down by disappointment in its third-quarter flavor sales despite a sharp rise in fine fragrances thanks to price increases.
Other chemical values have also unscrewed, such as Solvay (-5.40%) or Arkema (-4.89%).
Technology still struggling
The technology sector was still badly oriented in the context of rising rates, but some companies suffered more such as Uber (-8.26%) and its competitor Lyft (-7.52%) in the face of legislative threats in the United States, or Meta, while Russia has classified the social media group as a “terrorist”.
On the side of currencies and oil
The pound recovered against the dollar, after a further drop in the British unemployment rate and action by the Bank of England (BoE) on the bond market. Around 11:50 a.m., the pound took 0.78% to 1.1142 dollars.
The European currency rose (+0.33%) against the dollar, trading at one euro for 0.9735 dollars.
Oil prices fell again, with concerns about a recession that would weigh on global demand taking over. Around 11:40 a.m., a barrel of Brent from the North Sea for delivery in December yielded 1.78% to 94.48 dollars and that of West Texas Intermediate (WTI) for delivery in November lost 2.07% to 89.24 dollars.