by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to rise slightly on Tuesday and the European stock markets, with the exception of Frankfurt, rebound timidly mid-session in a wait-and-see context before the decisions of several major central banks, including the Federal Reserve (Fed) and the Bank of England (BoE). New York index futures signal Wall Street opening up 0.04% for the Dow Jones, 0.09% for the Standard & Poor’s 500 and 0.07% for the Nasdaq. In Paris, the CAC 40, which was shaken in particular the day before by Société Générale, rebounded by 0.17% to 7,288.33 around 12:00 GMT. In Frankfurt, the Dax fell by 0.16%, penalized by industrial stocks. In London, the FTSE nibbles 0.06%.
The pan-European FTSEurofirst 300 index gained 0.01%, the EuroStoxx 50 of the euro zone 0.15% and the Stoxx 600 0.03%.
Hesitation prevails over exchanges as the Fed begins a two-day meeting this Tuesday at the end of which it should give its projections on the evolution of interest rates and the economy. A pause in the rise in federal funds is widely expected by the market but uncertainty remains over peak rates, currently in a range of 5.25-5.50%.
In the United Kingdom, where the Bank of England meets on Thursday, a further increase in the cost of credit is expected, but there too investors are divided as to whether this is the last increase of the cycle. The Swiss and Norwegian central banks also meet on Thursday, while the Bank of Japan (BoJ) will make its decision on Friday.
On the inflation side, the rise in prices in the euro zone stood at 5.2% year-on-year in August, a figure slightly below the first estimate, but which remains more than twice higher than the 2% target of the European Central Bank (ECB).
“We do not expect a rate cut from the Central Bank until at least June 2024,” writes Mark Haefele, chief investment officer at UBS Global Wealth Management.
Inflation data from the UK and Japan is due this week.
In terms of the economy, the OECD has raised its forecast for global growth for this year to 3%, but is more cautious for 2024, counting on a slowdown to 2.7%.
VALUES TO FOLLOW AT WALL STREET
Maplebear, the parent company of the American grocery delivery platform Instacart, a company backed by the Japanese conglomerate Softbank, will make its stock market debut in New York this Tuesday at an indicative price of $30 per share, which values it at $9.9 billion.
VALUES IN EUROPE
The positive trend in Europe is led by energy (0.49%) as the price of Brent approaches $100 per barrel, in a context of concerns about supply. TotalEnergies takes 1.26% and BP 0.55%.
The finance and insurance sectors benefit from tensions on bond yields, gaining 0.80% and 0.58% respectively. UBS advances by 0.17%, its general director being positive about the dynamics of the Swiss bank now at the head of 5,500 billion dollars in assets under management since the takeover of Credit Suisse.
In Paris, Société Générale, which plunged more than 12% on Monday following the presentation of its 2026 strategic plan, lost another 1.39%, HSBC having lowered its recommendation to “keep” on the bank.
The industrial stocks index (-0.54%) is also in the red, for the second consecutive session, with Deutsche Post falling by 5.61%, Barclays having reduced its price target on the messaging group and Delivery.
In company results, SMCP plunged 26.51% and Kingfisher 10.48%, both groups having lowered their forecasts for this year.
TUI, Ocado Group and Marks & Spencer, which on the other hand confirmed their annual outlook, took 5.15%, 2.49% and 2.11% respectively.
RATES Bond yields in the euro zone, which increased on Monday following comments deemed restrictive by several ECB officials, were stable on Tuesday, with the ten-year German Bund showing at 2.712%, close to a peak of 12 years.
The governor of the Bank of France, François Villeroy de Galhau, estimated that the ECB should maintain its deposit rate at 4.0% for as long as necessary, while the money markets predict with a probability of 30% a further increase in the cost of credit in the eurozone by the end of the year.
In the United States, the yield on ten-year Treasuries is also almost unchanged, at 4.3246%, after Monday’s rise, which allowed it to reach a peak since August 22.
EXCHANGES The euro rose to 1.0705 dollars (+0.14%) following information from Reuters according to which the ECB could start a debate next month on excess liquidity in the banking system.
The dollar fell 0.27% against a basket of benchmark currencies but remained close to the six-month high reached last week.
Oil is heading towards a fourth session in a row of increases, the weakness of American production in view of the figures published Monday by the Energy Information Administration (EIA), the American Energy Information Agency, reinforcing fears of a supply deficit on the market. Brent rose 0.31% to $94.72 per barrel and American light crude (West Texas Intermediate, WTI) rose 0.85% to $92.26.
NO MAJOR ECONOMIC INDICATOR ON THE AGENDA FOR SEPTEMBER 19
(Written by Claude Chendjou, edited by Blandine Hénault)
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I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.