(Paris) Western stock markets fell on Wednesday, fears about the slowdown in economic activity, even recession, returning to the fore after disappointing economic indicators.
After a session of declines on Tuesday, Wall Street remains mixed: around 12 p.m. EST, the Dow Jones was up 0.19%, the S
In Europe too, the indices are trending down in Paris (-0.39%), Frankfurt (-0.53%) and Milan (-0.59%). London is an exception (0.37%).
After the episode of dread experienced by the banking sector in March, the markets regained strength by betting on the probability of an imminent end to the rate hike cycles of the American central bank (Fed).
But the week’s economic indicators also highlighted the slowdown in economic activity. Private sector companies in the United States added 145,000 jobs in March, down sharply from the previous month.
In other bad news, the Services Activity Index (ISM) has slowed more than analysts expected. In industry, the indicator published on Monday showed a contraction for the fifth month in a row.
In Europe, investors took notice at the start of the session of the slightly weaker than expected recovery in activity in the euro zone in March.
In the bond market, government bond yields turned around after the US private sector job creation report: the US ten-year rate fell to 3.27% from 3.34% on Tuesday evening and its German counterpart (Bund) fell to 2.17% against 2.25%.
“Investors are divided on whether to pay more attention to the expected decline in corporate earnings or the resulting speculation on lower interest rates,” said Konstantin Oldenburger at CMC Markets.
Volvo fell more than 8% on the Stockholm Stock Exchange after its second largest shareholder with 8.2% of the capital and 16% of the voting rights, the Chinese manufacturer Geely, said that if it did not plan to change its participation, “anything is possible” in the future according to comments reported by the Bloomberg news agency. In March, Geely sold its 6.3% stake in Daimler Truck, a competitor of Volvo.
Daimler Truck lost 5.47% on Wednesday, and Renault, which has partnered with Geely, 4.21%, bigger drops than the rest of the sector, which is poorly oriented overall.
Companies in the construction sector suffered in Europe, after the results of the distributor of industrial and electronic products RS Group in London (-6.26%). Its sales continued to grow, but at a slower pace than anticipated in the staggered 4th quarter, ending March 31.
In Paris, Rexel lost 6.72%, Saint-Gobain 4.52%, Legrand 4.55%.
German cream maker Nivea, Beiersdorf (1.57%), raised its annual targets after Wednesday’s first-quarter results beat expectations.
The dollar struggled to regain momentum on Wednesday, as the prospect of a less stringent Federal Reserve (Fed) dampened the greenback and benefited gold, which is approaching its all-time high.
The price of an ounce remained stable at 2020.63 dollars after rising to 2028.44 dollars, a peak since the beginning of 2022. The price of gold is approaching its historic high reached in August 2020 at 2075.47 dollars.
By 11:40 a.m. (ET), the dollar was unable to move away from its low since early February hit the previous day at $1.0973.
By 11:40 a.m. EST, a barrel of North Sea Brent crude for June delivery was down 0.08% at $84.87.
Its American equivalent, a barrel of West Texas Intermediate (WTI), for delivery in May, slipped 0.31% to 80.46 dollars.
Bitcoin fell 0.60% to $28,090.
