by Claude Chendjou
PARIS (Reuters) – The main European stock markets are expected to be down slightly on Wednesday at the opening, as risk aversion is likely to continue in the markets with uncertainties over the US debt ceiling and macroeconomic data deemed disappointing.
Index futures suggest a decline of 0.14% for the CAC 40 in Paris, 0.01% for the Dax in Frankfurt, 0.15% for the FTSE 100 in London and 0.16% for the EuroStoxx 50.
US President Joe Biden and Speaker of the House of Representatives Kevin McCarthy made progress on raising the US debt ceiling on Tuesday, but the White House tenant acknowledged that he remains there is still work to be done, while the Republican “speaker” said the two sides were still far from an agreement.
As the June 1 deadline approaches, “one thing investors can be certain of is that more uncertainty awaits them,” said Saira Malik, chief investment officer at Nuveen. According to her, greater volatility in the equity and bond markets is to be expected until the outcome of the negotiations is clearer.
In terms of macroeconomic indicators, retail sales in the United States rose less than expected in April, by 0.4%, a sign that consumers are beginning to feel the effects of rising prices and interest rates.
In the euro zone, the market will learn at 09:00 GMT of the final inflation figures in the hope of confirmation of the slowdown in price increases.
The publications of Elior, Vallourec, Siemens, Commerzbank and Target should also animate the exchanges.
VALUES TO FOLLOW IN EUROPE:
AT WALL STREET
The New York Stock Exchange ended lower on Tuesday on disappointing Home Depot forecasts and monthly U.S. retail sales below expectations, amid heightened risk of U.S. default.
The Dow Jones index fell 1.01%, or 336.46 points, to 33,012.14 points.
The broader S&P-500 lost 26.38 points, or 0.64%, to 4,109.90 points.
The Nasdaq Composite fell for its part by 22.16 points (0.18%) to 12,343.05 points.
“It feels like people are starting to get a little more sensitive to the success of (the) Fed’s campaign and the ongoing debt ceiling soap opera is causing angst,” Ken Polcari said. Director of Kace Capital Advisors, Florida.
On the stock side, Home Depot fell 2.15% and weighed on the S&P-500 after revising its forecast for annual sales downwards and said it expected a sharper-than-expected decline in profit.
Horizon Therapeutics plunged 14.17% as the US competition regulator is expected to file a lawsuit to block its takeover by Amgen for $27.8 billion.
IN ASIA
On the Tokyo Stock Exchange, the Nikkei index advanced 0.85% to 30,095.46 points and the Topix, larger, took 0.33% to 2,134.29 points as the close approached.
Japan’s economy grew 1.6% year on year in the first quarter as analysts expected growth of just 0.7% year on year, after contracting 0.1% in the previous quarter.
The MSCI index comprising stocks from Asia and the Pacific (excluding Japan) fell by 0.20%.
In China, the Shanghai SSE Composite lost 0.45% and the CSI 300 lost 0.39%.
CHANGES
Risk aversion is favoring a decline in the dollar, which is hovering around a five-week peak (+0.08%) against a basket of benchmark currencies.
Against the Japanese currency, the greenback touched a two-week high at 136.69 yen per dollar, while against the single European currency it broke above its 50-day moving average to trade at 1.0866 dollar for one euro.
RATE
The ten-year US Treasury bond yield fell 2.5 basis points to 3.5245% after recent indicators suggested a slowdown in the US economy.
Atlanta Fed President Raphael Bostic, however, said the Fed will need to stay “super strong” in the fight against inflation, while his Chicago-based counterpart Austan Goolsbee said it was premature to do anything. debate on an interest rate cut.
OIL
Oil prices were virtually unchanged on Wednesday as investors remained cautious after a surprise rise in US crude inventories last week, sources cited figures from the American Petroleum Institute.
Brent fell 0.09% to 74.84 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.17% to 70.74 dollars.
(Written by Claude Chendjou, edited by Matthieu Protard)
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