by Claude Chendjou

PARIS (Reuters) – Wall Street is expected to rise slightly on Friday at the opening and the European stock markets are also in the green at mid-session before the publication of the monthly report on American employment.

New York index futures signal Wall Street opening up 0.23% for the Dow Jones, 0.13% for the Standard & Poor’s 500 and 0.14% for the Nasdaq.

In Paris, the CAC 40 continues its rebound, gaining 0.75% to 7,050.88 points around 11:30 GMT, thanks in particular to finance stocks, whose index is up 1.77% against a backdrop of expectations of further increases. interest rates. In Frankfurt, the Dax started to rise again the day after its decline, gaining 0.81%. In London, the FTSE advances by 0.37%.

The pan-European FTSEurofirst 300 index increased by 0.65% and the EuroStoxx 50 of the euro zone by 0.89%. The Stoxx 600, which hit a six-month low during the week due to a jump in bond yields in Europe and the United States, gained 0.70%.

Over the entire week, the CAC 40 nevertheless shows a decline of 1.21% at this stage and the Stoxx 600 a drop of 1.31%.

The main indicator of the week, the employment report from the US Department of Labor will be released at 12:30 GMT. The Reuters consensus forecasts a slowdown in job creation to 170,000, a slight decline in the unemployment rate to 3.7% but an acceleration in the growth of average hourly wages to 0.3% over one month.

Despite an accelerated rise in rates in the United States, the labor market, against all expectations, continues to show resilience, which could encourage the American Federal Reserve (Fed) to maintain a restrictive policy for longer than expected, analysts explain.

Russ Mould, investment director at AJ Bell, believes that even with the unemployment rate at 3.7%, the market could consider that the economy is still resilient and that rates will remain high.

“Unless the employment figures surprise on the downside, I think the job market continues to be strong,” adds Michele Morganti, equity strategist at Generali Investments.

For the moment, traders continue to expect a status quo on Fed rates for the November and December meetings with probabilities of 82% and 64% respectively, according to CME’s FedWatch barometer.

VALUES TO FOLLOW AT WALL STREET

Tesla fell 1.5% in pre-market trading after lowering the prices of its Model 3 and Y in the United States, a few days after missing the consensus on its third quarter deliveries.

Exxonmobil lost 1.5% in pre-market trading and Pioneer Natural Resources jumped 10.4%, with the two groups in advanced discussions regarding a merger, according to sources.

Levi Strauss & Co dropped 5.3% in after-hours trading after a downward revision of its annual forecasts.

VALUES IN EUROPE

Aviva jumped 7.64% following information from The Times according to which the British insurer could be bought by a foreign group.

Philips plunged 6.91%, the Food and Drug Administration (FDA), the American health authority, having judged the recall procedure for the group’s respiratory devices to be unsatisfactory.

In Paris, Alstom has not recovered from its collapse the day before, linked to the lowering of its free cash flow forecast. The group drops another 3.73%, while financial stocks like BNP Paribas (+1.39%) or Société Générale (+1.70%) are in demand.

On a sectoral level, non-cyclical consumption (-1.27%) is among the rare Stoxx 600 indices in the red, alongside defensive compartments such as “utilities” (community services). Nestle and Unilever lost 2.6% and 1.77% respectively while some traders highlighted the risks linked to changing food consumption habits due to the use of anti-obesity drugs such as Wegovy.

RATE

Bond yields remain high despite a rebound in the equity markets, with that of the ten-year German Bund rising two basis points to 2.902%. However, it is below the 3% mark reached on Wednesday, which brought it to a 12-year high.

In the United States, the yield on Treasuries of the same maturity rose by around three basis points, to 4.7464%, close to a 16-year high.

CHANGES

The dollar is stalling (+0.02%) against a basket of reference currencies before the American employment report.

The euro is stable on Friday (+0.03%) against the dollar, at 1.0551, but is heading towards a twelfth week of decline against the greenback, the longest series in this sense since the entry into circulation of the single European currency in 1999.

OIL

The oil market is stable but heading towards a decline over the whole week due to fears about demand: Brent gains 0.07% to 84.13 dollars per barrel and American light crude (West Texas Intermediate, WTI) 0.1% to $82.39.

(Written by Claude Chendjou, edited by Blandine Hénault)

Copyright © 2023 Thomson Reuters