London (-0.61%), Frankfurt (-0.48%), Paris (-0.26%) and Milan (-0.03%) finished lower. Madrid advanced 0.60%. In Zurich, the SMI lost 0.74%.
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European markets generally ended lower on Friday, with no very clear direction due to lack of interesting news since the Fed’s announcements which had not surprised investors the day before.
London (-0.61%), Frankfurt (-0.48%), Paris (-0.26%) finished lower. Milan failed close to breakeven (-0.03%) and Madrid advanced 0.60%. In Zurich, the SMI lost 0.74%.
Wall Street, on the other hand, was more positive: at 6:45 p.m. %.
“Things were a bit hazy today, in part because there was little information,” CMC Markets analyst David Madden said.
The resignation of the Japanese Prime Minister for health reasons did not have a “big impact” on the meeting according to him.
The markets therefore remained on the announcements of the US Federal Reserve (Fed) Thursday, which had already not surprised them.
Fed President Jerome Powell has reinforced his monetary support, which is vital for the markets to cope with the crisis caused by the spread of Covid-19. “The modification of the inflation target”, which allows the Fed to let the price increase exceed 2% without acting immediately by raising its rates “implies an accommodative monetary policy for a long time” summarizes Vincent Boy, analyst at IG.
The Fed prefers to redirect its efforts towards employment, which is still badly damaged in the United States.
Concerns about consumers
Side indicators, “the figures of American activity show a sustained recovery, driven by the manufacturing and the real estate sector”, note analysts at Edmond de Rothschild Asset Management. However, they point to concerns about consumption due to the lack of agreement on a fiscal stimulus plan in Congress.
The economic recovery is slower in Europe, and the continent is also suffering in recent days from a sharp increase in new Covid-19 contaminations. In Germany, consumer sentiment is expected to deteriorate again in September after several months of growth, due to fears of further restrictive measures, according to the Gfk barometer.
“The European economies are unable to take their heads out of the water and find the path to strong and sustainable growth”, judges Marc Touati, chairman of the Acdefi cabinet.
Interest rates for the debts of the main 10-year euro area countries have remained stable.
Bank and gold shaped
In terms of values, the banking sector dominated the Parisian rating the day after the Fed’s policy change: Crédit Agricole took 3.25% to 8.90 euros, BNP Paribas 3.60% to 37.81 euros, and Societe Generale 3.09% to 14.15 euros.
Gold producers have benefited from the rise in the precious metal linked to a dollar under pressure and comments by Jerome Powell. In London, the Fresnillo mining group took 2.85% to 1,262.50 pence and its counterpart Polymetal International 4.54% to 2,028.00 pence.
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