China and oil push back on Wall Street



Sinéad Carew

NEW YORK (Reuters) – The New York Stock Exchange ended lower at the end of the week, as oil prices worsened after the announcement of US federal reserves, which are still expecting a gradual rise in oil prices. its rates and Chinese indicators were considered worrying.

The Dow Jones Index lost 201.92 points, ie 0.77%, to 25,989.30. The wider S & P-500 lost 25.82 points, or 0.92%, to 2,781.01. The Nasdaq Composite declined by 123.98 points (-1.65%) to 7,406.90 points.

Dow Jones earned 2.8% for the week, S & P-500 2.1%, and Nasdaq Composite 0.7%.

Market moods were quenched by China's announcement of a further deceleration in the producer price index and a drop in car sales that revived fears of the growth of the second world economy,

These signs of slowdown in China, the largest importer of oil, contribute to the decline in raw material because it fears that the world market is in a situation of excessive supply.

"Many investors see oil prices as a general indicator of the global economy, so its weaknesses are not positively assessed," said Scott Brown, Raymond James's Economic Research Director.

In connection with the growing trade tension between Washington and Beijing, official Chinese statistics showed that producer prices fell in October in the fourth month due to weak domestic demand and manufacturing activity, while car sales fell for the fourth time in a row.

The decision by the Fed on Thursday to keep its monetary policy unchanged was not surprising, but for many observers the central bank's claims suggest that it is targeting further rate hikes. the outcome of its next meeting on December 18 and 19, which will be the fourth year.

According to CME's FedWatch barometer, the probability of 25 basis points in the next month to increase base rates is now estimated at 75.8% compared with 71.1% on Thursday.

OIL

Oil prices were penalized by fears of a surplus supply situation on the world market in connection with the expected slowdown in Chinese demand.

The West Texas Intermediate (WTI) rose 0.79% to $ 60.19 for the tenth consecutive day, the longest since July 1984. On a day below $ 60 a barrel, the lowest since the beginning April.

The Brent North Sea lost 0.67% to $ 70.18. At the beginning of April, it fell below seventy dollars, roughly 20% of its four-year high at the beginning of October, reflecting the bear market.

"What's the difference for the month," says Michael Tran, director of commodity strategy at RBC Capital Markets.

"Market sentiment has been developing from the fastest trend in recent years, many of them expecting to even spend $ 100 a few weeks back to the deepest mood since the autumn of 2016."

VALUES

S & P's energy sector index fell 0.37% after it dropped 2.2% y / y and oil prices on Thursday. The main sources industry declined by 1.37%.

The high-tech index fell by 1.66%, while Apple (-1.93%), the sector being weighed against the risk aversion that confiscated investors.

General Electric declined by 5.71% and for the first time since March 2009 it fell below $ 9. JP Morgan lowered its price target from $ 10 to $ 6.

The financial sector also declined (-0.96%), including Citi (-2.98%) following the announcement preceding the day when a group of investors asked 16 big banks, including Citi, to manipulate rates. exchange office.

Power sources including PG & E (-16.49%) and Edison (-12.12%) have fallen, and California fires have left thousands of households without gas or electricity.

Cigarette manufacturers, following a statement from an official, agreed that the Food and Drug Administration (FDA) would prohibit the sale of electronic candy-flavored candies that refer to teens in grocery stores and petrol stations.

INDICATORS DAY

In terms of indicators, producer prices in the United States recorded the largest month-on-month increase in October in six years, but the underlying inflationary pressures remained limited.

The mood of US households worsened in a little less than expected in November, the first results of a monthly survey by the University of Michigan show Friday.

MEETINGS IN EUROPE

European markets also ended on Friday, as the aversion risks rose – oil, China and the Fed – on Wall Street.

In Paris, the CAC 40 lost 0.48% to 5,106.75 points and the British Footsie reached 0.49%, while German Dax finished almost unchanged (+0.02%).

EuroStoxx 50 lost 0.25%, FTSEurofirst 300 0.36% and Stoxx 600 0.37%.

For a full week Stoxx 600 gained 0.46%, but CAC 40 showed only a symbolic 0.09%.

The largest sectoral decline was in the commodity sector (-3.41%), reflecting the drop in industrial metals. The oil sector declined by 1.41%.

The downward revisions to revenue growth in 2018 declined Nexans by 14.85% and German Thyssenkrupp by 9.08%.

RATE

US bond yields have lost the country in the context of aversion to risk. The decade loses almost 5 basis points to 3.18%, equity issues support the return on government debt.

German Bund yields with the same maturity fell below 0.41%. , His Italian equivalent almost stabilized at 3.41% after the peak at 3,461.

EXCHANGE

The dollar index came close to the 16-month maximum against the euro, taking advantage of its safe haven status, and after confirming the Fed's willingness to raise rates.

The euro is also punished by the differences between Europe and Italy over Rome's budget. The single European currency trades around $ 1.1335.

Sterling stabilized after losing almost 0.6% against the dollar and the euro after the resignation of United Kingdom Foreign Minister Jo Johnson. Brother Boris Johnson, on this occasion, condemned the "delirious" Brexita talks under Prime Minister Theresa May.

(Sinead Carew and Sruthi Shankar, Laetitia Volga and Juliette Rouillon for the French service)


Source link