A general view shows the Palais Brongniart, the former Paris Stock Exchange
PARIS (Reuters) – Major European stock markets are expected to continue their decline on Friday in the wake of Wall Street’s sharp near-term lows and fresh warnings of worsening global economic conditions, adding to fears ahead of the Federal Reserve.
Index futures suggest a drop of 0.63% for the CAC 40 in Paris, 0.93% for the Dax in Frankfurt, 0.6% for the FTSE 100 in London and 0.85% for the EuroStoxx 50.
The Paris market lost 0.88% in the first four sessions of the week and the broad European Stoxx 600 index fell 1.33%, erasing all its gains from the previous week.
Wall Street extended its losses at the end of Thursday’s session to finish near its lows for the day and the Standard & Poor’s 500 is down 4.08% since the start of the week.
Significantly, after the closing of US markets, FedEx, the package delivery and logistics giant seen as a barometer of general economic activity, lost up to more than 14% after the withdrawal in its earnings statements, citing a marked deterioration in economic conditions.
FedEx’s observation of the evolution of the activity is in line with what was done a few hours earlier by the International Monetary Fund (IMF) and the World Bank (WB): the latter warned of the risk of a global economy in 2023 while the IMF as a further slowdown is expected in the third quarter of this year.
For once, the rare good news of the last few hours came from China, as industrial production and retail sales there beat expectations in August with increases of 4.2% and 5% respectively. .4%
In Great Britain, retail sales on the contrary were disappointing with a drop of 1.6%, more than three times more marked than expected.
ON WALL STREET
The New York Stock Exchange ended sharply lower on Thursday, as a burst of macroeconomic indicators published during the day in the United States did not change expectations of another sharp increase in interest rates from the Federal Reserve this week. . next to fight inflation.
The Dow Jones Industrial Average lost 0.56%, or 173.27 points, to 30,961.82, the S&P-500 fell 44.66 points, or 1.13%, to 3,901.35 and the Nasdaq Composite fell from 167.32 points (-1.2,5% ).
While the rise of bank stocks (+1.54%) with the prospect of further rate hikes helped to limit the decline of the Dow Jones, the decline of digital giants such as Apple (-1.9%) and Microsoft (- 2.7%) however weighted. especially the Nasdaq.
And the decline is expected to continue this Friday after the FedEx warning: index futures currently suggest a decline of 0.6% for the Dow Jones, 0.69% for the Standard & Poor’s 500 and 0.87% for the Nasdaq.
On the Tokyo Stock Exchange, the Nikkei index ended up 1.11%, affecting technology stocks such as Tokyo Electron (-4.33%) and exporters such as Fast Retailing (-1.31%). %). The Japanese market thus showed a weekly decrease of 2.29%.
In China, the day’s good economic indicators were not enough to protect the shares from a general decline: the SSE Composite in Shanghai gave 1.83% and the CSI 300 1.85%.
The dollar rose slightly against other major currencies (+0.15%), with the prospect of a sharp increase in US rates next Wednesday continuing to give it strong support.
The euro traded at $0.9992, down 0.07%. But the yuan suffered more despite the good economic numbers of the day in China, after breaking the threshold of seven for one dollar.
The yen, meanwhile, recovered slightly against the greenback at 143.5, capitalizing on hopes of intervention by Japanese authorities.
In Asian trading, the yield on ten-year US Treasury bonds was almost stable at 3.4689%, but the two-year, more sensitive to expectations of key rates, rose to 3.9137% against 3.873% at the end of trading Thursday on Wall Street. .
In Europe, the ten-year German rose in early exchanges to 1.795%.
The oil market recovered some ground but this only reduced the weekly losses in an economic and monetary context that increased fears of reduced demand.
Brent gained 0.47% to 91.27 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.34% to 85.39 dollars.
Both have lost nearly 1.6% since the start of the week.
(Writing by Marc Angrand, editing by Matthieu Protard and Kate Entringer)