by Claude Chendjou

PARIS (Reuters) – Major European stock markets are expected to open on a stable note on Wednesday, with the Stoxx 600 index trading near a 14-month high, as several major companies in Europe and the United States publish their quarterly accounts.

Futures contracts on indices suggest a gain of 0.04% for the CAC 40 in Paris, which registered the day before in session a new record at 7,559.35 points. The Dax in Frankfurt is expected to fall 0.01%, while the FTSE 100 in London could nibble 0.03%. A rise of 0.02% is expected on the EuroStoxx 50.

In the luxury sector, after last week’s results from LVMH and Hermès, L’Oréal will publish its first quarter accounts at the close of the Paris Stock Exchange. Before that, the market will have taken note of the publications in Europe of OVH Groupe, FDJ and of the Dutch ASML, while in the United States those of Morgan Stanley, Tesla, AT&T, IBM or Dow are planned.

With the market pricing in first-quarter S&P-500 company earnings down 4.8% year-on-year, Refinitiv data shows, some pundits fear the slowing economy will also be seen in business results.

“We expect earnings to be really affected. It’s kind of a slowdown that happens in a recession and this earnings recession is really kind of the next cleaver to fall,” said Brandon Pizzurro, director investments at Guidestone Capital Management.

Investors also have their eyes on the US Federal Reserve (Fed) as its Beige Book, which serves as the basis for the work of the Monetary Policy Committee (FOMC) ahead of the May 2-3 meeting, will be released at 6:00 p.m. GMT. In this regard, the last authorized comments from Fed officials will be worth watching before the period of silence scheduled from the weekend ahead of this meeting.

As for economic indicators in Europe, the final data on inflation in the euro zone in March will be published at 09:00 GMT while the chief economist of the European Central Bank (ECB), Philip Lane, defended on Tuesday a further hike in interest rates. interest at the meeting on May 4, stressing that the extent of this increase would depend on the data received, in particular in the survey of euro zone banks.

Goldman Sachs on Tuesday raised the ECB’s peak deposit rate to 3.75% from 3.5% previously, citing ebbing concerns about banks and broadly “hawkish” remarks from ECB officials.

Consumer prices in Britain in March are, for their part, forecast at 06:00 GMT and the Reuters consensus forecasts a slowdown in the rise to 0.5% over one month and 9.8% over one year.

AT WALL STREET

The New York Stock Exchange ended in mixed order on Tuesday, with only the S&P-500 marginally in the green, as gains by big tech stocks were dampened by investor disappointment with Johnson & Johnson and Goldman Sachs.

The Dow Jones Industrial Average fell 0.03%, or 10.55 points, to 33,976.63 points.

The broader S&P-500 gained 3.55 points, or 0.09%, to 4,154.87 points.

The Nasdaq Composite fell for its part by 4.31 points (0.04%) to 12,153.41 points.

Goldman Sachs fell 1.7% after posting quarterly profit down 19%.

Among the major sectors of the S&P-500, technology ended up 0.4%, driven by a jump from Nvidia after HSBC raised its recommendation for the semiconductor maker to “buy”.

The health sector meanwhile declined by 0.7%, weighed down by Johnson & Johnson’s 2.8% decline following the pharmaceutical group’s warning of rising costs caused by inflation.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index fell 0.31% to 28,570.84 points and the wider Topix fell 0.21% to 2,036.64 points as the close approached.

In China, the Shanghai SSE Composite dropped 0.21% and the CSI 300 lost 0.4%.

The MSCI index comprising the values ​​of Asia and the Pacific (excluding Japan) returned from a two-month peak hit on Monday and lost 0.5%.

EXCHANGES/RATES

The dollar is stable (+0.08%) on Wednesday against a basket of reference currencies after a decline of 0.36% the day before, while the euro, down 0.05%, is trading at 1, 0966 dollars.

On the bond market, the yield of three-month Treasuries stands at 5.2079% against 3.5813% for the ten-year while the inversion of the curve between these two maturities reached 160 basis points, the most marked since 1981.

OIL

The oil market was little changed, with investors assessing the impact of an expected Fed rate hike on demand: Brent fell 0.27% to $84.54 a barrel and US light crude (West Texas Intermediate, WTI) 0.22% to $80.68.

(Written by Claude Chendjou, edited by Tangi Salaün)

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