The Main Stock Markets in Europe Faced this Tuesday with a Good Tone But…
The main stock markets in Europe faced this Tuesday with a good tone, but the trend has completely changed in the last hours of the session. The ‘red numbers’ have spread to both sides of the Atlantic shortly before the opening of Wall Street with losses exceeding 1% in most Western indices. The fear that the Federal Reserve (Fed) will raise interest rates earlier than expected so far.
The opening of the European market today was bullish, with moderate advances in all markets. The positive ‘macro’ data for April confirmed on Monday in the euro zone and the (apparent) better evolution of the pandemic in Europe and the US supported the good mood of investors.
However, something has happened shortly before the opening bell sounded on Wall Street: there has been a mini-crash due to the massive sale of shares, especially in the main North American technology companies (such as Apple and Tesla).
What happened? At first, the cause was unclear. Some operators consulted by Bloomberg speculated with the growing military tensions between China and Taiwan after learning that the Asian giant has entered the airspace of the latter country. “Geopolitical risks are increasing”
Others, on the other hand, considered that the reason for the shake in the bags could be simpler: the actions have gone too far, in spite of a season of results that is surpassing the expectations of the experts.
But the main cause of the nervousness on Wall Street seems to have a first and last name: Janet Yellen. The Secretary of the Treasury of the United States has assured that, to control the strong growth of the North American economy (the largest in the world), it is possible that the ‘price of money’ will have to rise. “It may be that interest rates have to go up a bit to make sure our economy doesn’t overheat,” she said.
Thus, the losses are even close to three percentage points (after the European close) in the Nasdaq 100, the technological index of the US stock market that, in addition, endangers important supports.
On this side of the Atlantic, the EuroStoxx 50 has fallen by almost 2%. Consequently, the selective continental has moved away from the psychological barrier of 4,000 points that it has tried to reconquer during much of the morning.