LAST UPDATE: 12.20
European stock markets lost ground on Tuesday, with investors glancing at the corporate results announced these days on both sides of the Atlantic as well as the next moves of the US Federal Reserve, as government bond yields return. U.S. are launching pre-pandemic levels pushing the tech industry.
In particular, the 10-year US government bond adds 5 basis points to 1.83%, while the 2nd strengthens by 9 basis points to 1.04%. Both bonds have been at a two-year high since early 2020, before the pandemic began. Futures on the Wall are falling, with the Nasdaq recording losses of 2%.
Meanwhile, global markets have recently weighed in on the possible acceleration of interest rate hikes by the Fed and the more aggressive tightening of its monetary policy.
Today, The Bank of Japan kept its key interest rate unchanged at -0.1%, exactly as analysts had predicted, while stating that it will proceed to the necessary purchases of Japanese government bonds so that the 10-year yield remains close to 0%.
At the same time, a barrage of announcements for the corporate results of the fourth quarter of 2021 has started, with Goldman Sachs and PNC Financial being among the big names that will announce results on Tuesday.
In Europe, Hugo Boss announced on Tuesday that Revenues and profits were higher than expected in 2021 after a strong start to the year, according to preliminary data. The German company of high quality clothing, announced that sales for the quarter were 1.2% higher in fixed currency, compared to the corresponding period of 2019, and 51% higher on an annual basis, at 906 million Euros.
In addition, the Economic and Financial Affairs Council is meeting today in Brussels. The meeting comes a day after German Chancellor Olaf Solz and Spanish Prime Minister Pedro Sanchez pledged to work more closely on European policy, despite differences over easing EU fiscal rules.
In this climate, the pan-European index Stoxx 600 falls 1.4% to 477 points, the lowest level in more than a week. The technology sector recorded the largest losses with a fall of 2.5%, while the energy sector recorded marginal gains.
In the individual dashboards, the German index DAX slides by 1.38% to 15,715 points, the French CAC 40 loses 1.28% to 7,110 points and the British FTSE 100 records losses of 0.92% at 7,540 points.
On the periphery, the Italian FTSE MIB falls by 1.1% to 27,385 points and the Spanish IBEX 35 loses 0.74% at 8,775 points.
In the individual shares, the German IT company Bechtle and the Swedish cloud computing company Sinch “dip” more than 5% each, while at the top of the European blue chip index is the Swedish Lundin Energy with an increase of 2.2%.
In macro of the day, British companies added a record 184,000 to their staff in December, showing little sign of being hit by Omicron, and raising the total staff about 1.4% above the pre-pandemic level of February 2020. The broader unemployment rate for the quarter to the end of November fell to 4.1%, according to the statistical service, lower than economists’ estimates for 4.2%.
They are moving towards the loss of the upward momentum stock indices in the Asia-Pacific region, “erasing” the gains that showed earlier in Tuesday’s session, with oil – at the same time – continuing its upward trend.