(Paris) Global stock markets were moving higher on Thursday after a speech by the chairman of the US Federal Reserve (Fed) in which investors saw signs of a slowdown in the rise in the institution’s key rates.
Posted at 7:16 a.m.
In Europe, stock markets engulfed a wave of corporate results. Paris rose by 0.51%, London by 0.18%, Frankfurt by 0.15% and Milan by 1.03% around 3:30 a.m.
Asian stock markets were less buoyant. Tokyo ended up a small 0.36%, Shanghai 0.21% and Hong Kong lost 0.19% in the latest trade.
The New York Stock Exchange ended broadly in the green on Wednesday, notably the highly interest rate-sensitive NASDAQ technology index, which gained more than 4%.
As expected, the Fed’s Monetary Committee (FOMC) raised its key rates by three quarters of a percentage point on Wednesday evening and “anticipates that further key rate hikes will be appropriate”.
“It was what Mr. Powell said afterwards that gave a boost” to the rise in Wall Street stocks, comments Jeffrey Halley, analyst at Oanda.
Fed Chairman Jerome Powell said that “at some point it will be appropriate to slow down” rate hikes. “The decision on this subject would be taken from one meeting to another, which would have the effect of ruling out the forecasts”, adds Jeffrey Halley.
Pressed by reporters to determine if GDP in the world’s largest economy was on the verge of contraction, Jerome Powell said the Fed believes “there is a way to bring inflation down while supporting a strong labor market”.
Later this Thursday, the first estimate of US GDP in the second quarter will be released. It could be very slightly positive, after a negative first quarter (-1.6%).
This news overshadowed the results of Meta (Facebook, -4.65% in electronic trading between trading sessions) which reported a drop in profit and declining turnover for the first time in its history.
Investors will also take notice of inflation figures for Germany in July.
A higher-than-expected figure risks tensing up investors who will be anticipating key interest rate hikes from the European Central Bank, believes Jeffrey Halley, who adds that “on the whole, the fate of Germany and Europe is much more closely linked to the Russian natural gas situation and, to a lesser extent, to Italian politics”.
The price of European natural gas eased by 3.57%, just below 200 euros per megawatt hour, around 3:25 a.m. On Wednesday, it had exceeded 225 euros and it has climbed almost 25% since the start of the week.
Black gold always pays more… but not enough
The British oil giant Shell announced a net profit multiplied by five in the second quarter, to 18 billion dollars, and the French group TotalEnergies saw its net profit double and reach 5.7 billion dollars in the second quarter.
Both benefited from the surge in oil and gas prices following Russia’s invasion of Ukraine.
Around 3:25 a.m., Shell shares only gained 1.09% and TotalEnergies shares fell 1.86%. Royal Bank of Canada analysts point out in a note “decent results, but no fireworks”, concerning TotalEnergies.
Oil prices rose on Thursday. The barrel of Brent from the North Sea for delivery in September took 0.94%, to 107.62 dollars.
The barrel of American West Texas Intermediate (WTI) for delivery the same month rose by 1.70%, to 98.30 dollars.
On the side of currencies and bitcoin
Against the yen, the dollar fell 0.65% to 135.68 dollars per yen, its lowest level since July 6.
The euro lost 0.06% against the dollar at $1.0192.
Bitcoin was up 0.96% at $23,000.