THE THREAT OF RECONFINATION IS BURDING THE MORALS OF INVESTORS
by Marc Angrand
(Reuters) – Wall Street is expected in dispersed order Friday and far from the levels hoped for at the start of the day while European stock markets retreat at mid-session after the announcement of a general containment in Austria and the evocation of a measure of the same order in Germany in the face of the new wave of the COVID-19 pandemic.
Futures contracts on the main New York indices foreshadow a decline of 0.56% for the Dow Jones and 0.19% for the Standard & Poor’s 500 but an increase of 0.39% for the Nasdaq, technology stocks keeping the favors of investors.
In Paris, the CAC 40, which had scored a record early in the morning at 7,183.08 points, lost 0.66% to 7,094.87 at 12:05 GMT. In London, the FTSE 100 lost 0.6% and in Frankfurt, the Dax fell 0.26%.
The EuroStoxx 50 index is down 0.71%, the FTSEurofirst 300 0.28% and the Stoxx 600 0.29%.
The latter however progressed at the opening and it took up to 0.43% but the trend was reversed after the announcement by the Austrian government of the entry into force on Monday of a general confinement that could last 20 days.
“With Germany experiencing a similar trend, the question now is whether the region’s largest economy will follow the same path. Its Health Minister Jens Spahn hinted today that nothing can be ruled out and that there is a national emergency, ”explains Craig Erlam, senior analyst in Oanda.
This renewed concern on the health front has largely overshadowed the latest statements by Christine Lagarde, President of the European Central Bank (ECB), stressing that a tightening of monetary policy in the current context would risk jeopardizing the recovery. economic.
RATE
The sudden onset of risk aversion triggered by the Austrian and German statements resulted in a decline in assets deemed to be the safest, including government bonds, with the result of a sharp drop in yields: it is approaching six. basis points for the ten-year German Bund, which fell to -0.336%, its lowest level since September 21.
The movement is hardly less marked on the US bond market: at 1.5309%, the yield on ten-year Treasury bills has lost more than five points.
During the US session, the market will monitor the interventions of Christopher Waller, one of the governors of the Federal Reserve, at 3:45 p.m. GMT, then of its vice-chairman, Richard Clarida, at 5:15 p.m. GMT.
VALUES IN EUROPE
The most marked sectoral decline of the day in Europe is for the European banking sector, which suffers both from its exposure to the economy and the impact of falling bond yields.
In Paris, BNP Paribas drops 3.93%, Société Générale 2.84% and Crédit Agricole 2.2% while in Frankfurt, Deutsche Bank falls 5.01% and in Vienna, Erste Bank sells 3.44 %.
The Austrian reconfinement also penalizes the automobile compartment (-1.74%) and that of transport and leisure (-1.70%). The specialist in airport stores Dufry lost 5.97%, the biggest drop in the Stoxx 600.
In contrast, the health sector grew by 0.93%.
Technologies (+ 0.31%) are also well oriented after the Nasdaq record.
CHANGES
Austrian re-containment and fears over Germany are also penalizing the euro, which depreciates 0.66% against the dollar at 1.1294.
The single currency thus amplifies the downward movement which has dominated the past fortnight: it has so far shown a drop of 1.4% against the greenback over the week after -1% last week.
Against the Swiss franc, it hit a low of more than six years.
The dollar logically benefits from its status as a safe haven: the index which measures its fluctuations against a benchmark basket is up 0.5%, not far from the 16-month high reached on Wednesday.
OIL
The return of the health situation to the forefront of market concerns is also weighing down the oil market by reviving doubts about the recovery in demand.
Brent fell 3.26% to $ 78.59 a barrel, its lowest since early October, and US light crude (West Texas Intermediate, WTI) fell 3.01% to $ 76.63.
Both are heading for a fourth consecutive weekly decline.
(French version Marc Angrand)