by Marc Angrand
PARIS (Reuters) – European stock markets finished in the green but below their highs of the day on Friday and Wall Street was evolving below its records at mid-session, after the announcement of a deterioration in US consumer sentiment, which favors the fall in bond yields and the dollar.
In Paris, the CAC 40 gained 0.2% (13.57 points) to 6,896.04 points after peaking at 6,913.67. In London, the FTSE 100 gained 0.39% and in Frankfurt, the Dax gained 0.25%.
The EuroStoxx 50 index ended with a symbolic increase of 0.08%, the FTSEurofirst 300 rose 0.2% and the Stoxx 600 added 0.21% to 475.83 points after registering in the morning a record at 476.16. It now shows ten consecutive sessions of increase, an unprecedented series since December 2006.
On Wall Street, the Dow Jones and the Standard & Poor’s 500 reached new historic highs at the very start of the session before giving up a little ground: at the time of the close in Europe, the Dow was grabbing 0.12%, the S&P -500 0.08% and the Nasdaq Composite 0.05%.
The University of Michigan consumer confidence index fell to 70.2 in August as an initial estimate, the lowest since December 2011, while the Reuters consensus gave it unchanged at 81.2.
“Consumers rightly conclude that economic performance will decline over the next few months, but the extraordinary rise in negative judgments about the economy also reflects an emotional response, mainly due to the disappointed hopes of a quick end to the pandemic,” explains Richard Curtin, head of the investigation.
In Europe, the stock market trend nevertheless remains supported by the stronger-than-expected rebound in listed company profits and the recovery in the mergers and acquisitions (M&A) market.
For the week as a whole, the Stoxx 600 gained 1.25% and the CAC 40 1.16%, their fourth consecutive positive weekly performance.
VALUES
Most of the major sectors of the European stock market rose during the day, the only notable drops being for technology, for which the Stoxx index lost 0.47%, and energy (-0.08%).
In Paris, Bouygues (+ 3.55%) finished at the top of the CAC 40 after JPMorgan raised its price target while Atos (-1.16%) is the red lantern of the index.
Elsewhere in Europe, M&A once again animated the session: the online pet store Zooplus jumped 41.12% after the announcement of its takeover by the American fund Hellman & Friedman for three billion euros and Adidas has took 2.34% the day after the sale of Reebok.
On the downside, Ipsen fell 12.71%, by far the worst performance of the Stoxx 600, after its US license application was withdrawn for its experimental treatment for progressive fibrodysplasia ossificans.
TODAY’S INDICATORS
In Europe, French inflation stands at 1.5% year-on-year in July according to final figures from INSEE, against 1.6% in first estimate.
Still in France, the unemployment rate as defined by the International Labor Office (BIT) remained stable in the second quarter at 8.0%
CHANGES
The unexpected drop in the Michigan confidence index weighed on the dollar, which fell 0.52% against a basket of benchmark currencies, to its lowest since last Friday.
The euro took the opportunity to rise to $ 1.1794 and now shows a positive weekly performance after falling on Wednesday close to its lowest level of the year (1.1704).
RATE
The disappointment of the Michigan survey triggered a sharp decline in US bond yields, the ten-year falling to 1.3018%, against more than 1.36% before the publication of the index.
Eurozone benchmark yields followed suit, with that of the ten-year German Bund ending the day at -0.465% after peaking at -0.44% at midday.
OIL
Hesitant for a long time, the oil market is not immune to doubts about the confidence of American households, which is fueling questions about the evolution of demand in the months to come.
Brent dropped 0.6% to $ 70.88 a barrel and US light crude (West Texas Intermediate, WTI) 0.49% to $ 68.75.
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