PARIS, April 15 (Reuters) – European stock markets ended Wednesday without much conviction, while Wall Street was in disarray at mid-session, as investors tried to balance geopolitics and the many corporate results.
In Paris, the CAC 40 ended with a loss of 0.64% at 8,274.57 points, weighed down by the dominant luxury sector. The FTSE 100 fell by 0.47%, while the German DAX rose by 0.18%.
The EuroStoxx 50 index lost 0.74%, the FTSEurofirst 300 by 0.51%, and the Stoxx 600 by 0.43%.
At the close in Europe, the Dow Jones fell by 0.48%, but the S&P 500 rose by 0.43% and the Nasdaq by 1.10%. The results of Bank of America (+1.75%) and Morgan Stanley (+4.35%) were praised, while the S&P 500 and Nasdaq erased all losses since the beginning of the war in Iran.
In Europe, stocks showed little variation for much of the session, with some indices briefly turning green before mostly ending in the red.
Caution eventually prevailed amidst uncertainty, with U.S. President Donald Trump stating that the conflict could end soon and the Strait of Hormuz might reopen shortly. However, Iranian Revolutionary Guards declared that they would block imports and exports in the Persian Gulf and the Gulf of Oman if the U.S. maintained their blockade on Iranian vessels. Meanwhile, Axios, citing two U.S. officials, reported that Washington and Tehran were approaching a framework agreement to end the war.
“The market is cautiously optimistic that we can restore peace with Iran,” summarized Art Hogan, chief market strategist at B. Riley Wealth.
As a sign of investor confidence, the volatility index on Wall Street eased slightly at close, around 18 points, in Europe, while the dollar, a reserve currency, depreciated and gold, a safe haven asset, declined.
Besides geopolitical developments, investors focused on corporate earnings season, particularly in the luxury sector in Europe, which disappointed, and in the American finance industry, which continued to prosper.
EUROPEAN STOCKS
Hermès tumbled by 8.21% after reporting sales below forecasts for the first quarter, impacted by the Iran war affecting spending in the Middle East and France.
Kering plunged by 9.28%, as Gucci sales showed a year-on-year decline in the first quarter.
Stellantis gained nearly 2% due to a 12% increase in deliveries in the first quarter.
ASML dropped by 4.25% after its revenue forecast for the year, while Aixtron soared by 20.23% with its annual outlook.
KEY INDICATORS OF THE DAY
Manufacturing activity in the New York region unexpectedly rose in April, with the “Empire State” index at +11.0 after -0.2 in March, according to the monthly survey from the regional arm of the Federal Reserve.
Its “Empire State” index rose to +11.0 after -0.2 in March.
Industrial production in the Eurozone grew more than expected in February, by 0.4%, according to data published by Eurostat.
In France, the harmonized inflation rate according to European standards (HICP) came in at 2.0% year-on-year in March, slightly higher than the initial estimate, according to final data from INSEE.
EXCHANGE RATES
The dollar fell by 0.07% against a basket of international currencies, almost reverting to pre-war levels after gaining up to 3% in early March.
The euro traded at 1.17799 dollar (+0.03%), almost stable, while the pound sterling was at 1.3565 dollar (+0.01%).
RATES
The yield on the U.S. ten-year Treasury bonds rose by 2.7 basis points to 4.28%, as several Fed officials spoke on Wednesday. Austan Goolsbee stated that rising oil prices could increase consumer inflation expectations, while Beth Hammack believed the Fed should keep interest rates unchanged “for a while”. President Donald Trump, on the other hand, once again threatened to dismiss Fed Chairman Jerome Powell if he did not resign from the Board of Governors.
In the Eurozone, the yield on the German ten-year Bund rose by 1.5 basis points to 3.04% at the close, while the two-year DE2YT=RR finished virtually unchanged at 2.54%.
CRUDE OIL
The oil market saw little change on Wednesday. American forces turned back ships leaving Iranian ports.
At the close of trading in Europe, Brent rose by 0.76% to 95.52 dollars per barrel and West Texas Intermediate (WTI) by 0.92% to 92.11 dollars.
UPCOMING ON THURSDAY:
(Reporting by Claude Chendjou, Editing by Sophie Louet)
by Claude Chendjou
