by Claude Chendjou

PARIS (Reuters) – Wall Street is expected to fall on Tuesday and European stocks, except for London, continued their mid-session decline amid risk aversion fueled by uncertainties over the U.S. debt ceiling, the publication said. mixed PMI indices in Europe and by the rise in bond yields and the dollar.

Futures on New York indices signal an opening on Wall Street down 0.13% for the Dow Jones, 0.14% for the Standard & Poor’s 500 and 0.12% for the Nasdaq.

In Paris, the CAC 40 fell by 0.85% to 7,414.49 around 11:35 GMT, penalized mainly by luxury stocks and Vivendi. In Frankfurt, the Dax drops 0.22%. In London, the FTSE advances by 0.27%, driven by the real estate and energy compartments.

The pan-European FTSEurofirst 300 index fell by 0.27%, the EuroStoxx 50 in the euro zone by 0.52% and the Stoxx 600 by 0.27%.

As the specter of a US default grows as the June 1 date approaches, Joe Biden and House of Representatives speaker Republican Kevin McCarthy said Monday having had a “productive” meeting but failed to reach an agreement on raising the country’s debt ceiling.

“Debt ceiling negotiations are progressing slowly (…) and with the uncertainty looming, gains in equity markets are being held back,” said Susannah Streeter, head of foreign exchange and financial markets at Hargreaves Lansdown, in a note.

Regarding economic indicators, the PMI for the month of May in the United States are expected at 1:45 p.m. GMT. In the euro zone, they showed that growth in activity was running out of steam with a composite PMI index falling this month to 53.3 against 54.1 in April. In the United Kingdom, activity in services also slowed in May to 55.1 from 55.9, while that of industry contracted again, to 46.9 from 47.8. The IMF, however, estimates that the UK should escape a recession this year.

Lowe’s fell about 2% in pre-market trading after the group lowered its annual forecasts for like-for-like sales and profit.

VALUES IN EUROPE

Vivendi fell 6.78%, posting the largest drop in the CAC 40, due to the sale of shares in the media group by businessman Vincent Bolloré, according to traders.

Luxury stocks like LVMH, Hermès and Kering, sensitive to changes in interest rates, fell from 2.10% to 4.37% as government bond yields in the euro zone tightened.

Rallye (-1.75%), the parent company of Casino, whose action is suspended, is abandoned despite the announcement of the opening of a conciliation procedure with its creditors.

Elsewhere in Europe, Swiss bank Julius Baer plunged 8.44%, heading for its worst session in three years, due to disappointment on its capital flows in the first four months of the year.

BT Group is in the red as Patrick Drahi, the founder of Altice, announced on Tuesday that it had increased its stake in the telecom operator to 24.5% and reaffirmed that it had no intention of proceeding with a takeover. group total.

RATE

The yield on the 10-year German Bund, a benchmark for the whole of the euro zone, takes more than four basis points to 2.494% as money markets are pricing in at least two more rate hikes from the European Central Bank this year , which would raise its deposit rate to 3.75%.

In the United States, the yield of ten-year Treasuries advanced by around three points to 3.7476%, several Fed officials, like James Bullard and Neel Kashkari, having pleaded the day before for a continuation of the monetary tightening, even in the event of a pause in June.

CHANGES

The dollar appreciated for the second consecutive session, by 0.3%, against a basket of reference currencies, carried by the “hawkish” remarks of several Fed officials. The greenback is approaching its two-month peak hit last week at 103.63 points.

The euro is trading at 1.0783 dollars (-0.26%) and is at this stage down more than 2% since the start of the month.

OIL

Oil prices are supported by an increase in demand for gasoline in the United States and the drop in production from OPEC+, which helps to relegate concerns about the American debt ceiling to the background.

Brent gained 0.79% to 76.59 dollars a barrel and US light crude (West Texas Intermediate, WTI) 0.82% to 72.64 dollars.

(Written by Claude Chendjou, edited by Kate Entringer)

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