The whole of the Old Continent has ended up in the red. Paris fell 1.86%, Frankfurt 1.82%, London 2.47% and Milan 1.64%.
(Paris) Fears over inflation, which could push interest rates up faster than expected, disrupted equity markets on Tuesday, from Asia to Europe to the United States.
The whole of the Old Continent has ended up in the red. Paris fell 1.86%, Frankfurt 1.82%, London 2.47% and Milan 1.64%.
At the time of the European close, the New York Stock Exchange remained weak: the Dow Jones Industrial Average lost 1.66%, the extended S&P 500 index lost 1.09% and the NASDAQ 0.57%.
“Stock markets have been rocked by rising inflation expectations, although the bond market does not appear to be showing signs of distress,” said Michael Hewson, analyst at CMC Markets UK.
Ten-year sovereign lending rates rose but did not fall into the panic of March-April 2020. The US Treasury bill stood at 1.62% against 1.60% on Monday evening.
Sharp increases in commodity prices are rekindling fears of inflation in the minds of investors.
“Yes, inflation is bound to be a spoiler in the recovery cycle. A quick glance at the evolution of materials since January is enough to understand this, “said a note from Fidelity.
A runaway inflation could push the American Central Bank, the Fed, to review its currently very accommodating monetary policy, and to decide to limit its support to the economy by reducing its asset purchases, or even by increasing its key rate. .
“The market is currently worried that sooner or later at least the US Federal Reserve will have to take its foot off the monetary accelerator and step on the brakes,” said Jochen Stanzl, analyst at CMC Markets.
These concerns grew after the release of the China Producer Price Index, which rose in April to its highest level in nearly four years.
Despite reassuring statements from central bankers, the markets sense that a slowdown in the rate of asset buybacks is under discussion and are waiting to see how and when it will be formalized.
In this context, the US consumer price index will be scrutinized by investors on Wednesday.
AstraZeneca in court
The stock lost 1.1% to 7,632 pence. The European Union is demanding before the Belgian courts that the laboratory deliver by the end of June to the Twenty-Seven the 90 million doses of its anti-COVID-19 vaccine which were not in the first quarter, on pain of financial constraints. A summary hearing will take place on May 26 before a Brussels court.
Virgin Galactic comes back to earth
Space tourism company Virgin Galactic fell 3.79% after quarterly results below analysts’ expectations. The company has also announced that it has not set a date for its next test flight, initially scheduled for May.
The steel creaks
In Frankfurt, the title of steelmaker Thyssenkrupp (-10.24% to 10.48 euros) hardly benefited from the results forecasts noted for 2020/2021, after a net loss divided by more than four over one year at second trimester.
In Paris, ArcelorMittal fell 2.10% to 27.06 euros. Environmental associations claimed on Tuesday before the French justice 110,000 euros in damages from the steel giant, for having for several years violated the law on pollutant emissions in its factory in Fos-sur-Mer, near Marseille (South).
Oil stabilizes, euro and bitcoin rise
Crude prices stabilized on Tuesday evening. OPEC on Tuesday maintained its forecast for rising global oil demand this year, cautious after raising it last month, when it plans to reopen the floodgates from May.
Around 12:40 p.m., a barrel of Brent from the North Sea for delivery in July stabilized (-0.01%) at 68.31 dollars in London.
In New York, WTI’s US barrel for the month of June advanced 0.09% to $ 64.98.
At the same time, the euro rose 0.26% against the greenback to $ 1.2165.
Bitcoin rose 1.21% to around $ 55,975.