(Paris) Western markets started the week with enthusiasm, with the approach of several corporate results, including the American technology giants, and reassured by the easing of bond rates.
Updated yesterday at 6:03 p.m.
On Wall Street, the Dow Jones gained 1.34% – its highest in a month and a half – the NASDAQ index rose 0.86% and the broader S&P 500 index gained 1.19%.
On the Old Continent, Paris took 1.59%, Frankfurt 1.58%, Milan 2.05%. In London, where the Conservative Rishi Sunak will become the next British Prime Minister following Liz Truss, the flagship index rose 0.64%.
The profile of Rishi Sunak, a 42-year-old ex-banker, “reassures a lot”, underlines Alexandre Baradez, analyst at IG France, noting that “the British pound is relaxing”.
The news of the week will be extremely busy for the markets “and it will weigh very heavily, with the American technological giants which will set the tone for the publications”, according to the French analyst.
Alphabet and Microsoft are expected on Tuesday, followed by Apple and Amazon on Thursday. In total, more than 1,500 companies listed on Wall Street must publish their quarterly accounts by Friday.
Macro-economic news is also rich. The European Central Bank (ECB) is expected to hit hard again on Thursday by raising its interest rates again, despite the risk of a recession which it now accepts in the face of the urgency of stemming inflation.
“We see the market’s interpretation of the ECB’s intentions,” according to Alexandre Baradez, who believes that the guardians of the euro will accompany the brutal rise in rates with a more nuanced speech by noting the slowdown in the economy.
The ECB has already raised its key rates twice since the summer, ending a decade of generous monetary policy: after a 0.50 point increase in July, the pace accelerated to 0.75 point in September , not without sparking internal debates.
After a peak on Friday, the cost of borrowing for states fell sharply in Europe.
On the other side of the Atlantic, with the hope that the American Central Bank (Fed) will slow down its monetary tightening, “we saw rates go down last week”, also underlines the analyst.
However, new concerns have come from Asia, “after a very political Communist Party congress in China with little economic orientation” and where the leader Xi Jinping has further strengthened his power, summarizes Mr. Baradez.
Chinese companies are hurting on Wall Street
Chinese companies listed on Wall Street had a very bad day after Chinese President Xi Jinping’s reappointment on Sunday.
Alibaba fell 12.51% to $63.15, while JD.com (-13.02%) and Pinduoduo (-24.61%) also dipped. Same trajectory for Yum China (-13.96%), which controls the KFC, Taco Bell and Pizza Hut brands in China.
Chinese stock indices had also unscrewed earlier. The tech-heavy Hong Kong Stock Exchange fell more than 6%, falling to its lowest level since 2009.
Tech behemoths have been hit in recent years by Xi’s crackdown on the sector, which has squeezed profits and lost billions of dollars in market valuation.
Tesla garbled by Twitter
Tesla fell (-1.49% to 211.25 dollars), a rare value in the NASDAQ index to end in the red.
Some investors and analysts are worried about the possible sale of new titles by Elon Musk, managing director of the electric vehicle manufacturer, as well as possible interference from the Twitter file in the management of the group.
On the side of currencies and commodities
The euro was up 0.12% at $0.9874 around 11:45 a.m. EDT, after hovering around $0.99, the highest since Oct. 6. The pound lost 0.19% to 1.1281 dollars.
Bitcoin fell 0.65% to $19,361.
The barrel of Brent from the North Sea for delivery in December fell 0.25% to 93.26 dollars and its American counterpart, the barrel of American West Texas Intermediate (WTI) for delivery in the same month, fell by 0, 55% at $85.05.
European natural gas continued to fall, below 100 euros (96.50 euros; -15.03%), the lowest since mid-June. This is due to “warm autumn weather across Europe and high storage levels ahead of the onset of winter”, according to analysts at Energi Danmark.