(Paris) Global markets retreated on Tuesday as headwinds blowing across global economic activity got the better of Monday’s rebound.
Posted at 8:42
The European stock markets were down: Paris yielded 0.83%, London 0.15% and Frankfurt 0.63% around 7:45 a.m.
In New York, the futures contracts of the main indices of Wall Street suggested an opening down between 0.5% for the Dow Jones and 1.4% for the NASDAQ, penalized by the collapse of Snap.
In Asia, the indices also suffered: Tokyo lost 0.94%, Shanghai 2.41% and Hong Kong 1.75%. Investors seemed unconvinced by Beijing’s new support measures for an economy weakened by health restrictions in the face of COVID-19, such as tax credits.
The confinements in China are only one of the many factors to weigh down global growth, with the war in Ukraine, the rise in the price of raw materials or even inflation and the measures of central banks to combat it.
In this context, the BlackRock Investment Institute downgraded the outlook for developed market equities to “neutral” on Tuesday, from “overweight” previously, “in the face of the risk of a sharp tightening of US Federal Reserve policy and a further deterioration of the global outlook under the effect of the Chinese slowdown”.
If certain indices have reached their lowest level in 2022, it will be necessary to wait “several months” to reach “a less gloomy future” according to the BBI.
Growth in economic activity in the euro zone slowed slightly in May in the private sector while remaining solid despite the war in Ukraine and high inflation, according to the composite PMI index from S&P Global.
Clues on US activity are expected before US markets open.
Snap dives, technology driven
The American group Snap, parent company of the social network Snapchat, issued a profit warning on Monday, considering that “the macroeconomic environment had deteriorated faster and more strongly than expected” compared to forecasts at the end of April. The price fell by nearly 30% in pre-session electronic trading.
Other big names in technology were affected such as Meta (-7%), Alphabet (-3.5%) or Amazon (-1.7%).
The hypothesis of an exceptional tax weighs down British energy companies
British energy companies fell on the prospect of a tax on windfall profits to help households deal with inflation.
The energy companies Drax (-15.95%), SSE (-7.49%) and Centrica (-10.90%) unscrewed. Elsewhere in Europe, the German RWE (-5.36%), the Dane Orsted (-4.11%) or the French EDF (-2.65%) were also affected.
In addition, Shell (-1.15%) suspended the general meeting of the company in London on Tuesday, about half an hour after its opening, due to the irruption of climate activists singing and apostrophizing the shareholders.
Capital increase at Air France-KLM
The title of the airline Air France-KLM fell by more than 10%, after the announcement of the launch of a capital increase of 2.26 billion euros. The entire sector was down, from equipment maker Safran (-2.15%) to airline Deutsche Lufthansa (-1.88%).
On the side of currencies and oil
After its gains the day before, stimulated by statements by Christine Lagarde, the euro confirmed against the dollar (+0.23% to 1.0716 dollars) around 7:40 a.m.
After having exceeded 58 dollars, the highest in four years, the ruble fell by more than 5% to 55.60 dollars.
Bitcoin fell 0.19% to $29,260.
Oil prices rose after the start of the session in the red: a barrel of Brent from the North Sea for delivery in July gained 0.41%, to 113.89 dollars.
A barrel of US West Texas Intermediate (WTI) for delivery the same month fell 0.40% to 110.73 dollars.