(New York) Stock markets experienced contrasting trajectories on Tuesday, caught between concerns about the pandemic and the rise in US bond rates, which sorted out sectors.
The European stock markets lost ground: Paris lost 0.85%, Frankfurt 1.11% and Milan 1.62%, while London (+ 0.15%) was pulled by oil stocks.
In New York, the Dow Jones gained 0.55% and the broader S&P 500 index, 0.17%, while the NASDAQ lost 0.50%.
“Skepticism about the evolution of the COVID-19 pandemic and the resulting restrictions, and the consequences for the global economy is growing […] a path, ”commented Andreas Lipkow, for Comdirect.
With the upsurge in cases, the World Health Organization (WHO) has expressed alarm at the “grip” of COVID-19 in Europe, where new health restrictions are sparking anger.
On the other hand, the markets are looking more and more precisely at the tightening of monetary policy in the United States, after 18 months of massive support from the US Federal Reserve (Fed).
President Joe Biden on Monday decided to renew Jerome Powell as its head. The latter assured that the Fed would act so that inflation does not “take root”.
Even if the appointment of Mr. Powell was expected by the markets, according to Philippe Cohen, portfolio manager of Kiplink Finance, he notes that “rates are tight because everyone anticipates a rise in rates in the United States.”
Following the trend observed the day before on US yields, European rates rose sharply: the German 10-year now stood at -0.22% against -0.30% at Monday’s close. And the French ten-year debt rate took seven basis points.
Tech in pain
Penalized by this rise in rates, “tech” stocks fell. Meta (ex-Facebook), dropped 1.10% to 337.25 dollars, Microsoft 0.63% to 337.69 dollars, and the dematerialized customer relations platform Salesforce 1.83% to 291.42 dollars.
In Paris, Capgemini dropped 2.89% and STMicroelectronics 3.96%.
In a context of rising interest rates, investors normally shy away from technology stocks, because they need to borrow at low rates to generate the growth on which their stock market valuation is based.
Conversely, banks have done well.
Oil rises despite Biden
Oil prices have paradoxically jumped after the announcement by US President Joe Biden of the coordinated use of strategic reserves between the United States and other countries consuming black gold, which was intended to lower prices.
The price of a barrel of Brent from the North Sea for delivery in January jumped 3.27% to 82.31 dollars.
In New York, a barrel of West Texas Intermediate (WTI) for the same month gained 2.22% to 78.50 dollars.
Sector stocks surged, as did BP (+ 1.50%) and Royal Dutch Shell (+ 1.41%) in London. In Paris, TotalEnergies gained 1.16%.
In New York, ExxonMobil (+ 2.63% to 63.13 dollars), ConocoPhillips (+ 2.63% to 73.78 dollars) or Chevron (+ 2.10% to 116.30 dollars) all had a session removed
Eon invests in green
The German energy company Eon (-4.23% to 10.63 euros) has announced that it wants to invest 27 billion euros in the green transition in Europe over the next five years. A large part of this sum must be devoted to the extension of the energy network.
On the currency and bitcoin side
The European currency rose 0.15%, after a low since July 3, 2020: around 9:45 p.m. GMT, the euro was worth $ 1.1254.
The Turkish lira has taken another historic plunge, losing 13% of its value in a few hours against the dollar and approaching 13 pounds for a greenback, a level never before reached.
As of 9.45 p.m. GMT, it was worth $ 12,8476, down 13.55% from the previous day’s close.
Bitcoin took 2.85% to $ 57,690.