by Laetitia Volga

PARIS (Reuters) – The main European stock markets are expected to open in dispersed order on Thursday, between fears of a recession in the United States, the expected continuation of monetary tightening by the Federal Reserve and sales of LVMH above expectations in the first quarter.

The first indications available suggest an increase of 0.54% for the Parisian CAC 40 – possibly driven by the good results of LVMH – a decline of 0.08% for the Dax in Frankfurt and the FTSE in London.

Several Federal Reserve officials last month considered suspending the cycle of interest rate hikes, but the still too high level of inflation finally convinced them to opt for a quarter-point increase, shows the minutes of the meeting of March 21 and 22.

Although Fed staff tasked with assessing the potential fallout from strains in the banking sector predicted a “mild recession” from the end of this year, a majority of observers believe the central bank will have no no choice but to opt for another rate hike in three weeks.

Indeed, the rise in core inflation, which excludes food and energy, accelerated slightly in March to stand at 5.6% over one year, against 5.5% in February. .

“We expect inflation to decline gradually but remain elevated through the end of 2023,” said Ryan Sweet, chief economist at Oxford Economics. “As a result, the Fed is likely to keep rates high through the end of the year, bucking market expectations of a rate cut.”

Investor caution is bolstered by the approaching US corporate earnings season for the first quarter, which begins Friday with banks JPMorgan, Citi and Wells Fargo.

VALUES TO FOLLOW:

In Europe, the results will gradually start to rain down as well. The global giant of the luxury industry LVMH opened the ball on Wednesday evening by publishing sales growth more than twice as high as expected, thanks to the rebound in activity in China.

AT WALL STREET

The New York Stock Exchange ended lower on Wednesday after the publication of “minutes” from the Fed showing that several of its officials expressed their concerns about the banking sector.

The Dow Jones index fell 0.11%, or 38.29 points, to 33,646.50 points, the S&P-500 lost 16.99 points, or 0.41%, to 4,091.95 points and the Nasdaq Composite fell 102.54 points (-0.85%) to 11,929.34 points.

Of the 11 major sectors in the S&P-500, seven ended in negative territory, with the consumer discretionary sector suffering the largest loss (-1.54%).

American Airlines fell 9.2% after reporting lower-than-expected first-quarter profit.

IN ASIA

The Nikkei in Tokyo is relatively stable (+0.24%) after hitting a one-week high on Wednesday.

In Hong Kong, the Hang Seng lost 0.43% after information from the Financial Times that the investment company SoftBank decided to sell almost all of its shares in Alibaba, down 2.34%.

As a result, the CSI300, the Chinese benchmark index, dropped 0.56% despite the unexpected rise in exports in March and the less marked drop in imports.

EXCHANGES/RATES

The dollar was unchanged against a basket of benchmark currencies and the euro was at 1.0985 dollars (-0.04%).

In the bond market, the yield on ten-year US Treasury bills fell slightly to 3.413% in Asian trading.

OIL

Oil prices fall a bit as investors tread cautiously amid lingering concerns over a possible US recession and falling demand for crude.

Brent fell 0.32% to 87.05 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.25% to 83.05 dollars.

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