London slipped 1.61%, Madrid lost 1.36%, Milan and Paris gave up 1.33%, and Frankfurt barely held up (-1.14%). In Zurich, the SMI sold 0.78%
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European markets all ended up clearly in the red Thursday, the day after a publication by the American Central Bank which underlined “the uncertainty” around the economic recovery in the United States.
London slipped 1.61%, Madrid lost 1.36%, Milan and Paris gave up 1.33%, and Frankfurt barely held up (-1.14%). In Zurich, the SMI lost 0.78%.
In the United States, after an opening into negative territory, the indices recovered to resume their forward march: at 4.30 p.m. GMT, the Nasdaq rose 0.70%, the S&P 500 by 0.16% and the star index , the Dow Jones, by 0.10%.
In European markets, “stocks are tumbling after the Fed’s warnings,” notes David Madden, CMC Markets analyst.
The minutes of the last meeting of the Federal Reserve’s monetary policy committee recalled “the uncertainty surrounding the economic outlook” in the United States. The trajectory of the economy “depends heavily on that of the virus and the response of the public sector to it”, that is to say the adoption of a new aid plan, believes the Fed.
However, the White House and the elected Democrats of Congress have been discussing for several weeks new aid measures for businesses and households, as well as for local communities and schools, without reaching an agreement.
The absence of a compromise “plays even more in the minds of investors” after these comments of the Fed, estimates Mr. Madden.
The minutes were also used “as a pretext to take profits” according to Guillaume Chaloin, head of equity management at Meeschaert AM. The markets have hardly experienced any correction sessions this summer, recalls the specialist, “especially in the United States”, where both the Nasdaq and the S&P 500 broke records at the start of the week.
Prudence
Finally, the Fed has also sent a message of caution about its future monetary policy. On the contrary, “investors hoped that the Fed would put some money back on the table, as the Chinese central bank did,” notes Mr. Chaloin.
In the afternoon, the number of new job seekers in the United States was mixed, with a slight increase from the previous week, and a figure again above one million.
In addition, in Europe, the pandemic confirms its strong rebound in several countries: Germany has returned to the levels of new contaminations at the end of April, a period then still considered the peak of the pandemic, while France recorded on Wednesday its worst daily gain since May.
The sovereign rates of the main euro zone countries hardly changed on Thursday, and eased slightly in France and Germany.
As for values, cyclicals, which are the most subject to the economic situation, suffered the most from the Fed’s publication.
The automobile has returned to the bottom of the ranking, with Renault losing 4.86% to 23.20 euros, and Peugeot 3.08% to 14.66 euros in Paris. In Germany, Daimler lost 2.23% to 41.97 euros, and Volkswagen 2.02% to 136.62 euros.
In Frankfurt, the fast-growing but still loss-making meal delivery company Delivery Hero fell 1.68% to 98.42 euros, the day after the announcement of its promotion in Dax, the flagship index, replacing the bankrupt online payment company Wirecard (-4.56% to 1.28 euro).
Accor took 2.25% to 23.68 euros. According to information from the newspaper Le Figaro, the hotel group has studied a merger project with its British competitor Intercontinental Hotels Group (IHG), without however going further in the discussion. Asked by AFP, the two groups made no comment. IHG rose 0.85% to 4,030 pence.
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