by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected on a cautious note at the opening on Friday after three consecutive sessions of gains while next week will be marked by the monetary policy meetings of three major central banks and several macroeconomic indicators, including the PMI indices in Europe and the American GDP.

According to the first indications available, the Parisian CAC 40 should nibble 0.05% at the opening. The Dax in Frankfurt could lose 0.5%, while the FTSE 100 in London should gain 0.03%. The EuroStoxx 50 index is expected to fall by 0.34%.

The wait-and-see attitude should dominate for the last session of the week in the absence of new catalysts, with retail sales in the United Kingdom, which came out stronger than expected in June (+0.7%), being the only major indicator of the day.

Investors will take note on Monday of the first figures of activity in Europe for the month of July with the publication of the PMI indices, while the first estimate of the American gross domestic product for the second quarter is expected on Thursday.

Meanwhile, the US Federal Reserve (Fed) will begin a two-day meeting on Tuesday that is expected to culminate in a final hike in interest rates on Wednesday after rising 500 basis points since March 2022, according to money market forecasts.

The European Central Bank (ECB), it will meet the next day and should also opt for a 25 basis point hike in its rates, without this being the last, according to a Reuters survey.

After the Fed and the ECB, the week will then end with the decisions of the Bank of Japan (BoJ), which could opt for the status quo despite core inflation in June (+3.3% over one year) which emerged above its target on Friday.

In addition to macroeconomic concerns, the results of companies (Thales, Sartorius Stedim, American Express or even Schlumberger) should continue to animate the exchanges, after the disappointment recorded in new technologies. The Refinitiv consensus forecasts a 6.4% decline in earnings for S&P-500 companies and a 9.2% decline in earnings for Stoxx 600 companies over the April-June period, year-on-year.

VALUES TO FOLLOW IN EUROPE:

Thales revised its growth target for 2023 upwards on Friday, while Dassault Aviation left its outlook for this year unchanged on Thursday evening despite a decline in adjusted revenue in the first half.

AT WALL STREET

The New York Stock Exchange ended in disarray on Thursday, with the Nasdaq suffering from poor results from Tesla and Netflix while the Dow benefited from the good performance of Johnson & Johnson.

The Dow Jones Industrial Average gained 0.47%, or 163.97 points, to 35,225.18 points.

The broader S&P-500 fell 30.85 points, or 0.68%, to 4,534.87 points.

The Nasdaq Composite fell for its part by 294.71 points (-2.05%) to 14,063.31 points.

Tesla’s quarterly results, released on Wednesday, disappointed, as its chief executive, Elon Musk, spoke of continued price cuts for its electric cars.

Netflix also fell after a performance below market expectations in the second quarter.

Johnson & Johnson ended in the green after raising its 2023 profit forecast and posting second-quarter earnings per share above analysts’ expectations.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index ended down 0.57% at 32,304.25 points and the broader Topix lost 0.06% at 2,262.2 points. The Nikkei, weighed down by values ​​linked to semiconductors such as Screen Holdings (-4.87%) and Renesas Electronics (-2.52%), thus posted a second consecutive session in the red.

The MSCI index comprising stocks from Asia and the Pacific (excluding Japan) fell 0.5%, heading for a weekly loss of 1.8%.

In China, the Shanghai SSE Composite lost 0.11% and the CSI 300 lost 0.13%.

EXCHANGES/RATES

The dollar is stable (-0.04%) against a basket of reference currencies and is heading for a gain of 1% over the week as a whole.

The Japanese currency strengthens to 139.97 yen per dollar after a reacceleration in consumer prices in June in Japan.

The euro, up 0.12%, is trading at 1.1141 dollars.

The pound rose 0.28% to 1.2904 dollars after the release of retail sales in Britain.

The yield on ten-year US Treasuries was virtually stable at 3.8388%.

The yield on the ten German Bund is at 2.439, down just over a basis point.

OIL

Oil prices are heading for a fourth week in a row in the green as investors digest the prospect of economic stimulus measures in China and the drop in crude inventories in the United States last week.

Brent gained 1% to 80.44 dollars a barrel and US light crude (West Texas Intermediate, WTI) 1.04% to 76.44 dollars.

(Written by Claude Chendjou, edited by Kate Entringer)

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