(New York) Global stock markets rose on Friday and renewed risk appetite also caused the dollar to pull back a little, but the context of a degraded economic outlook and geopolitical uncertainty has not changed.
Updated yesterday at 5:07 p.m.
In Europe, the Paris Stock Exchange gained 1.41% and Frankfurt 1.43% the day after the European Central Bank (ECB) rate hike. London took 1.23% the day after the death of Queen Elizabeth II, but will be closed on the day of her funeral, which will be a public holiday in the United Kingdom.
Due to this disappearance, the Bank of England announced that its monetary policy meeting, the decision of which was to be published Thursday in the midst of soaring inflation in the United Kingdom, would be postponed by a week.
European indices posted their first weekly increase in four weeks, but remain dependent on the evolution of the war in Ukraine, gas prices, the impact of inflation on growth and on corporate results.
Same trend conducive to the New York Stock Exchange, where the Dow Jones gained 1.19%, the NASDAQ index took 2.11%, and the broader S&P 500 index, 1.53%.
The MSCI global equity index rose over the week, after three successive declines.
In another sign of renewed investor confidence, the dollar, seen as a safe haven, was somewhat neglected after hitting multi-decade highs against many major currencies this week.
Edward Jones’ Angelo Kourkafas sees the market rally as the end of investors’ digestion of a series of offensive statements by members of the Federal Reserve (Fed) and a new wave of rate hikes by several other central banks.
“All of this commentary ended up being absorbed in both the bond market and equities,” the manager said.
The New York market also noted the slowdown in inflation in China in August as well as the downward revision by some economists of their inflation forecasts in the United States.
The “breakeven rate”, the difference between the yield of inflation-indexed bonds and that of ordinary bonds of the same maturity fell again on Friday, to its lowest level for a month and a half.
This difference is supposed to reflect the market’s opinion on the evolution of inflation.
The theme will remain central next week, with the publication on Tuesday of the CPI price index for August, which will provide information on the path of inflation in the United States.
Raw materials in the green
Hopes of recovery in China benefited the raw materials sector: in Paris, ArcelorMittal gained 1.28%. In London, Anglo American advanced by more than 4% like BHP Group in the last exchanges.
The rebound in the prices of black gold and several metals after weeks of depression benefited Wall Street oil stocks such as EOG Resources (+4.27%) or Marathon Oil (+2.89%), as well as to the mining company Freeport-McMoRan (+5.06%) or the steelmaker US Steel (+3.83%).
The banks reap
Already at the top of the bill Thursday, banking stocks continued to reap the benefits of rising rates: Societe Generale took 2.88%, BNP Paribas 2.61% in Paris.
Gas stalls, oil rises
European energy ministers on Friday said they were in favor of a series of emergency measures to stem soaring gas and electricity bills, even mentioning a cap on the price of gas imports from the EU.
In sharp decline since its peak at the end of August, the price of European natural gas on the benchmark market, the Dutch TTF, fell by 6.14% to 207 euros per megawatt hour.
Oil prices followed a second session of strong gains on Friday, thanks to a continued technical rebound, renewed risk appetite, a weaker dollar and supply fears.
The price of a barrel of Brent from the North Sea for delivery in November climbed 4.13%, to close at 92.84 dollars.
As for the barrel of American West Texas Intermediate (WTI), with maturity in October, it took 3.89%, to end at 86.79 dollars.