A trader works at the Frankfurt Stock Exchange
by Claude Chendjou
PARIS (Reuters) – European stock markets ended lower on Friday and Wall Street was also red in the mid-session amid risk aversion linked to a “profit warning” from FedEx, the American logistics and giant shipping parcels, and the warnings of The International Monetary Fund (IMF) and the World Bank (WB) on the evolution of the world economic situation.
In Paris, the CAC 40 ended up 1.31% at 6,077.3 points. The British Footsie lost 0.62% and the German Dax lost 1.66%.
The EuroStoxx 50 index fell by 1.17%, the FTSEurofirst 300 by 1.61% and the Stoxx 600 by 1.58%.
Throughout the week, the Parisian index fell by 2.17% and the pan-European Stoxx 600 by 2.35%.
The WB estimated on Thursday night that a simultaneous increase in interest rates by central banks in the face of persistent inflation could favor a global recession next year, and the IMF said it expects the deeper economic slowdown in the third trimester.
In this poor economic context FedEx announced on Thursday the cancellation of its annual financial forecasts as the American group is considered a reliable barometer of the global economy.
The predictions come as investors set their sights on the US Federal Reserve (Fed) monetary policy meeting, scheduled for Wednesday. An increase in interest rates by 75 basis points is widely expected in the market.
In the euro zone, while inflation for the month of August was confirmed at 9.1% for a year, an unprecedented level since the creation of a currency, the Vice-President of the European Central Bank (ECB ) that Luis de Guindos insisted on Friday. to continue raising rates despite the risk of recession.
This risk increased in the UK with retail sales figures showing a sharper than expected decline in August.
The only positive news of the day came from China, where production and retail sales were stronger than expected in August.
A sign of nervousness in the markets, the volatility index hit a two-month high in the United States at 28.45 points, while in Europe it ended at 4.27% at 26, 43 points.
VALUES IN EUROPE
FedEx’s warning reasonably outweighed its European competitors: the German group Deutsche Post fell by 6.58%, the British Royal Mail by 8.08%, the Swiss Kuehne & Nagel by 4.09% and the Dutch DSV Panalpina by 6.19%.
The European air transport sector (-2.46%) was also mocked by the strike of French controllers: Air France-KLM fell 4.77%, ADP 2.43% and easyJet 3.62%.
Elsewhere, Uniper fell 1.74%, a German government draft seen by Reuters showed the struggling group was unlikely to receive aid until October 31.
In Italy, Banca Monte Dei Paschi Di Siena fell 5.07% after shareholders approved a capital increase project.
ON WALL STREET
At the close in Europe, the Dow Jones fell 0.86%, the Standard & Poor’s 500 1.10% and the Nasdaq 1.38%.
All the main compartments of the S&P-500 are in the red, with the industrial sector (-2.21%) showing one of the biggest declines.
After FedEx’s announcements, which fell 23.20%, the Dow Jones transport index fell 5.11%, to a low since February 2021.
Courier and logistics groups UPS and XPO Logistics yielded 4.42% and 6.78% respectively. Amazon gave 2.62%. Airlines Southwest Airlines and JetBlue lost 4.59% and 1.85% respectively.
In foreign exchange, the dollar is strong against other major currencies and should end the week in positive territory thanks to the expected sharp increase in rates in the United States next Wednesday.
The euro, up 0.09% to $1.0008, rose above parity with the greenback.
The pound sterling, punished by the retail sales statistics in the United Kingdom, fell to a new low of 37 years against the American currency, at 1.1351 dollars.
European bond yields ended higher again, supported by the latest statements from Christine Lagarde and Luis de Guindos, respectively President and Vice-President of the ECB, on the need to step up the fight against inflation despite the risk of recession.
That of the two-year German Bund hit its session peak since 2011 at 1.62% before narrowing its closing gains to 1.549% (+4.7 points). The ten-year gained about three points to 1.764% after rising in the session to 1.817%, the highest since mid-June.
In the United States, the yield on ten-year Treasury bonds fell slightly to 3.451%, but the two-year one increased by more than one point to 3.886%.
Oil prices rose again after their sharp drop in previous sessions, but they had to show their third consecutive weekly decline throughout the week, mainly due to demand fears.
Brent rose 1.14% to 91.88 dollars a barrel and US light crude (West Texas Intermediate, WTI) was up 0.87% to 85.84 dollars.
(Written by Claude Chendjou, edited by Sophie Louet)