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MARKET REVIEW. Stock markets did not show a clear trend on Thursday, after the publication of disappointing indicators and in a context still weighed down by the risk of recession.
In Europe, the indices fell sharply at the start of the session, but around 8:00 a.m. Quebec time, investors seemed less worried about the economic situation.
After a small dip on Wednesday, Wall Street futures pointed to a higher open.
In Asia, the Shanghai and Hong Kong markets were helped by statements from President Xi Jinping, according to Oanda analyst Jeffrey Halley.
Stock market indices at 8:35 a.m.
In the United States, futures contracts Dow Jones rose 108.00 points (+0.35%) to 30,579.00 points. The futures contracts S&P 500 increased by 21.00 points (+0.56%) to 3,783.75 points. The futures contracts Nasdaq rose by 86.00 points (+0.74%) to 11,651.75 points.
In London, the FTSE 100 retreated 3.80 points (-0.05%) to 7,085.42 points. In Paris, the CAC 40 increased by 19.06 points (+0.32%) to 5,935.69 points. In Frankfurt, the DAX yielded 85.61 points (-0.65%) to 13,058.67 points.
In Asia, the Nikkei Tokyo ended up 21.70 points (+0.08%) at 26,171.25 points. For his part, the Hang Seng Hong Kong rose 265.53 points (+1.26%) to 21,273.87 points.
On the oil side, the price per barrel of WTI trade was down US$0.19 (-0.18%) at US$106.00. The barrel of Brent North Sea was lower by US$0.11 (-0.10%) to US$111.63.
The composite PMI indices of S&P Global revealed a sharp slowdown in economic activity growth in the euro zone in June, to a 16-month low.
In the wake of these publications, the euro lost 0.61% and the pound 0.37% against the dollar, trading respectively at 1.050 5 US dollars for one euro and 1.222 4 $US for one pound.
The statistics come amid growing fears of a global economic recession, and a day after statements by Federal Reserve chief Jerome Powell, who admitted that a soft landing for the US economy was going to be “very difficult” and that a recession was “certainly a possibility”.
“This confirms the cloudy medium to long term outlook for riskier assets,” commented ActivTrades analyst Pierre Veyret.
Jerome Powell’s hearing before the US Congress continues this Thursday.
Other leading economists are banking on a recession, including former New York Fed Chairman Bill Dudley, who said it was “inevitable within the next 12 to 18 months.”
“After Deutsche Bank, Nomura or Goldman Sachs, it is now Citigroup’s turn to predict a recession”, with a probability “close to 50%, as central banks tighten their monetary policy and demand for goods s ‘weakens,’ says John Plassard, investment specialist at Mirabaud.
Last monetary decision to date, the Bank of Norway raised its key rate by 0.5 points on Thursday, to 1.25%, while suggesting an acceleration of monetary tightening in the future.
On the bond market, sovereign interest rates continued to fall, “a sign that bond investors are looking for a little insurance against recession”, deciphers Michael Hewson, analyst at CMC Markets.
The reference price for natural gas in Europe, the TTF Dutch, jumped 6.86% to 136 euros per megawatt hour (MWh) after Germany activated the “alert level” of the plan on Thursday to guarantee its gas supply which brings the country closer to rationing measures, in the wake of the 60% drop in deliveries from Moscow via the Nord Stream gas pipeline.
The Italian bank Monte dei Paschi di Siena (BMPS.MI) has announced the launch of a capital increase of 2.5 billion euros in order to strengthen its equity and finance its new 2022-2026 strategic plan which aims to increase its profitability and reduce its costs. The action yielded 1.02%.
Le bitcoin rose above US$20,000 (+3.83% to US$20,610) around 7:55 a.m. Quebec time.