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Rebound in Europe following Wall Street – 16/11/2018 10:31:50

Plots in Europe are opened

By Blandin Hanault

Europe's main stock markets rallied on Friday after suffering a day before the political turmoil surrounding Brexit, backed by a Wall Street rally with hopes of a relaxation on the trade front between Washington and Beijing.

In Paris, the CAC 40 index rose 0.39% to 5.053.26 points a day. In Frankfurt, the DAX rose by 0.44% and in London, the FTSE index rose by 0.38%.

The EuroStoxx 50 index rose 0.31%, the FTSEurofirst 300 index rose 0.38% and the Stoxx 600 rose 0.31%.

On Wall Street, the three main indexes ended after reports from the Financial Times that US Trade Representative Robert Leitzer told business leaders that the next round of import tariffs was frozen while bilateral negotiations continued.

Robert Leitizer's services denied the information, but hopes of escalation have not weakened, especially since Beijing has approved an earlier resumption of negotiations after a three-month suspension.

European investors also remain alert to the storm surrounding Brexit. The agreement on the departure of Britain from the European Union by Theresa May on Thursday caused a political crisis in London, with the resignation of several ministers on the trigger by the euroseptic conservative deputies of the procedure to achieve a vote of no confidence.

According to the Daily Telegraph, the Northern Ireland Union Party (DUP) is ready to end the agreement with the Conservative Party if it leaves British Prime Minister Theresa May in her head.


Led the CAC 40, and Vivendi climbed 5.28% after reporting quarterly results above market expectations. Several analysts note that the group's performance is higher than the highest expectations in the market.

Following it, Bollor, Vivendi's largest shareholder, rose 3.44%.

On the other hand, Wallach was heavily punished and dropped almost 20% after its third quarter results. Cash consumption is a special concern for many analysts.

Warnings of Nevada and Applied Materials after Wall Street closed the European semiconductor producers' sanctions, such as STMicroelectronics (-0.16%) and AMS (-0.62%). However, Apple's 2.5% recovery on Thursday on Wall Street limits the impact of alerts on the sector.

In Asia

The decline in Asian semiconductor manufacturers, on the other hand, punished Tokyo's stock market more sharply, ending at 0.57%. The Japanese index fell by 2.56% during the week, mainly due to the decline in technology shares following the publication of Apple and its suppliers.

In China, the trend was more positive with renewed hope on the trade front. China's central bank has also called on banks in the country to make full use of existing incentives to develop loans to private companies, mainly small and medium-sized companies.

The CSI 300 index on the mainland increased by 0.47%.

Wall Street

The Dow Jones Industrial Average ended Thursday with a gain of 0.83%. Optimism on the trading front benefited from industrial advantages such as Caterpillar (+ 3.45%) and 3M (+ 3.46%), but Boeing (-0.91%) remained at the top of the list. Gap, punished by safety issues around his 737 Max.

The S & P 500 index returned 1.06% and the NASDAQ gained its 1.72% gain, supported by rebound in technology stocks, including Apple which recovered 2.5%.

Nasdaq futures contract fell 0.7% on Friday after disappointing announcements by Novidia and Applied Materials, which fell sharply in deals after closing.


The 10-year German Bund returned to a level of more than 0.37% following Mario Draghi's speech at the European Banking Congress.

President of the European Central Bank (ECB) said he sees a "temporary" slowdown in growth, but said the economic cycle is resilient, and the labor market is already showing signs of tension.

The yield on 10-year bonds remained unchanged at around 3.11%.


Mario Draghi's speech has a small impact on the euro, which rose 0.2% against the dollar, 1.1350.

However, the Japanese currency weakened against the pound, which is trying to regain its color after suffering its biggest decline on Thursday since October 2016. The British currency is also rising against the dollar, but tends to erase its gains against a possible no-confidence vote.

"The political turmoil is never good for one currency, but in the case of Britain, the pound could fall to $ 1.25 against the dollar, according to Brixitt's prospect without an agreement, a change in the prime minister and a slowdown in growth," says Kathy Lane, BK Asset Management.

The dollar index, which measures the development of the dollar against a basket of reference currencies, yields 0.1%.


Oil prices rose significantly after falling at the beginning of the week, investors are now expecting a cut in OPEC production due to the threat of oversupply in the market.

Brent's barrel returns to more than $ 67.50 and the barrel of US crude light (WTI) evolves to more than $ 57. One and the other are still far from the peak reached at the beginning of October, at 86.74 dollars and 76.90 dollars, respectively.

(Edited by Mark Angran)

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