by Marc Angrand
PARIS (Reuters) – Eurozone stock markets ended higher Thursday for the fourth session in a row and Wall Street set new records on hopes of an agreement in the U.S. Congress on a massive stimulus package and to that, always present, of a compromise between London and Brussels on Brexit.
In Paris, the CAC 40 ended the day with a symbolic gain of 0.03% (1.78 point) to 5,549.46 points while in Frankfurt, the Dax rose 0.75%. In London, the FTSE 100, again hampered by the appreciation of the pound sterling, fell 0.3%.
The EuroStoxx 50 index posted an increase of 0.5%, the FTSEurofirst 300 0.31% and the Stoxx 600 0.3%, their highest since February 26, without however managing to return to 400 points.
At the time of the close in Europe, Wall Street was also upbeat, with the Dow Jones gaining 0.37%, the Standard & Poor’s 500 0.4% and the Nasdaq Composite 0.55%.
The latter and the S & P-500 set records in early trading and the Dow rose to 30,323.78 points, less than three points from Monday’s all-time high.
Investors continue to bank on the upcoming adoption of the $ 900 billion (€ 736 billion) stimulus package that Democratic and Republican officials in Congress continue to discuss.
They also hope that British and EU negotiators will eventually agree on post-Brexit trade relations, even if the European Union does not expect a deal in the coming hours.
To these two factors is added the prospect of the deployment in Europe from December 27 of the first authorized vaccine against the coronavirus.
VALUES
In Europe, risk appetite and confidence in improving the economy primarily benefited the distribution (+ 2.07%), high technology (+ 1.43%) and media sectors (+ 1.23%).
In Paris, the strongest increase in the CAC 40 is for Cap Gemini (+ 3.54%), which benefited from the increase in the annual turnover forecast for the American Accenture (+ 8.45%).
EDF for its part took 1.97% after having revised upwards its objective of annual gross operating surplus (EBITDA).
In London, the WPP advertising group has won 4.19% after saying it plans to return to its 2019 activity levels in 2022.
TODAY’S INDICATORS
In the United States, jobless claims registered an unexpected increase last week to 885,000 while the consensus gave them down to 800,000.
Another sign suggesting that the recovery is running out of steam, the “Philly Fed” activity index fell more than expected, to 11.1 in December against 26.3 the previous month. On the contrary, housing starts and the issuance of building permits have increased, confirming the good health of the real estate market.
In Europe, the INSEE business climate index in France, up one point to 93, confirmed the gradual improvement in business conditions.
CHANGES
The increasingly clear prospect of a stimulus plan synonymous with a widening budget deficit contributed to the dollar’s fall, which fell to its lowest level in more than two and a half years against other major international currencies (-0, 68%).
The euro, on the other hand, hit $ 1.2262, its highest level since April 2018, before falling back to around 1.2250.
The latest news from the post-Brexit negotiations continues to favor the pound sterling, up against the greenback (+ 0.67%) as against the single currency (+ 0.21%). The British currency reduced its gains only slightly after the Bank of England’s decision to leave monetary policy unchanged, as expected.
Note also the six-year peak of the Swiss franc against the dollar after the confirmation by the Swiss National Bank (SNB) of its policy of targeted interventions on the foreign exchange market.
RATE
Spreads are reduced on the interest rate markets in Europe and the United States. The ten-year German Bund yield, at -0.573% at the end of the session, quickly erased the rise caused by the presentation of Germany’s 2021 issuance program, which could reach 471 billion euros.
On the US side, the yield on ten-year Treasury bills fell below 0.9% after today’s economic indicators but then regained almost all of the lost ground.
OIL
The prospect of massive stimulus measures in the United States and the drop in US crude inventories have allowed the market to reach its highest level in nine months.
Brent rose to $ 51.90 per barrel before falling to $ 51.40, up 0.63%, and US light crude (West Texas Intermediate, WTI) rose 0.86% to 48.23 dollars after peaking at 48.59.
(Marc Angrand, edited by Jean-Michel Bélot)
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