Strong rebound in global stock markets pending the Fed

Posted Jan 26, 2022, 5:19 PMUpdated on Jan 26, 2022 at 6:22 p.m.

At the heart of a particularly volatile week, global stock markets rebounded sharply on Wednesday pending monetary policy decisions from the US Federal Reserve tonight at 8 p.m. In Paris, the CAC 40 rose above 7,000 points before falling back to close up 2.11%, at 6,981.9 points. While the Dax in Frankfurt ended the session up 2.22%, the FTSE in London up 1.33% and the EuroStoxx50 up 2.12%.

Buoyed by strong results from Microsoft, Wall Street also started the session in the green. At the end of the European session, the Dow Jones gained 0.85%, the S & P 500 1.51% and the Nasdaq, the index of technology stocks, 2.09%. A rebound after two turbulent sessions during which technology stocks had suffered particularly.

Posting results that exceeded analysts’ and projects’ expectations in video games and the metaverse, Microsoft started the session very strongly and was still gaining almost 4% at the end of the European session. The group, which represents the second largest market capitalization in the world, has brought in its wake the other giants Apple, Amazon and Alphabet (Google), with increases of between 1.5% and 4%.

Cyclical stocks on the rise

Pending the publication of its results after the stock market, the automotive giant Tesla was also at the party at the start of the session and was still evolving at + 3% at the end of the afternoon. In recent days, global markets have been destabilized by speculation on the evolution of the Fed’s monetary policy and geopolitical tensions in Eastern Europe.

The US central bank could announce tonight its intention to proceed in the coming months – probably in March – with its first rate hike since 2018, in order to contain inflation at its highest in nearly 40 years. Investors are also awaiting indications on the timetable for the reduction of its balance sheet (quantitative tightening).

In Europe, it was more cyclical stocks that led the way. The tourism sector benefited from the renewed enthusiasm of investors, with a gain of nearly 4% for Air France-KLM and the Accor group, and a rise of 4.7% for the German airline Lufthansa. The car manufacturer Renault also posted a gain of nearly 6%. While Airbus took nearly 5.5% thanks to good results in 2021 on its helicopter sales.

Tensions around Ukraine posing a threat to supply in an already tight market propelled oil higher. The price of a barrel of Brent crossed the threshold of 90 dollars for the first time since October 2014.

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