by Claude Chendjou

PARIS (Reuters) – Wall Street is expected to be on a cautious note and European stock markets are falling mid-session due to uncertainties over the trajectory of rates while investors digest the first quarterly results of American financial giants.

Futures on New York indices signal an opening on Wall Street of 0.16% for the Dow Jones, but a drop of 0.06% for the Standard & Poor’s 500 and 0.32% for the Nasdaq the day after ‘a session in the red after consumer prices (CPI) in the United States which posted a surprise increase of 3.7% over one year.

“The market is pricing in a series of rate cuts in the second half of next year. If the US economy remains strong enough, these cuts may not materialize,” says Bimal Patel, fund manager at Canada Life Asset Management.

In Paris, the CAC 40 dropped 0.77% to 7,049.89 points around 11:50 GMT. In Frankfurt, the Dax fell 0.8% and in London, the FTSE fell 0.31%.

The pan-European FTSEurofirst 300 index fell by 0.59%, the Eurozone EuroStoxx 50 by 0.8% and the Stoxx 600 by 0.69%.

Over the week as a whole, the CAC fell by 0.10% at this stage, while the Stoxx 600 rose by 1.27%.

In addition to concerns about rates, investors are analyzing the first contrasting quarterly results of financial companies in the United States, in the hope of detecting clues on the impact of inflation and rates in a context of slowing economic growth.

A sign of a certain nervousness on the market, the index measuring volatility in the United States increased by 3.95%, to 17.35 points, while its European equivalent jumped by 8.39%, to 18.60 points. .

VALUES TO FOLLOW AT WALL STREET

Among the financial publications expected this Friday, BlackRock reported a profit well above expectations for the third quarter, but the asset manager posted a sharp drop in net inflows, which pushed the stock down 1%. pre-stock market.

JPMorgan Chase, the largest US bank, recorded a rise in profit in the third quarter, as rising interest rates boosted its loan revenue. The action gained 0.5% in pre-market trading.

Wells Fargo, for its part, gained 1.9%, the bank’s quarterly profit having also been supported by rising interest rates.

VALUES IN EUROPE

In Europe, practically all the main sectors of the Stoxx 600 are in the red, with the notable exceptions of basic resources (+0.01%) and energy (+1.32%) which benefit from the rise in prices. copper and oil.

In terms of values, Sartorius plunged 13.33% in reaction to a downward revision of its turnover and adjusted margin forecasts for the whole year.

Swiss Re takes 1.31%, Berenberg having gone to “buy” on the reinsurer.

British American Tobacco fell 3.843% after the decision of the Food and Drug Administration, the American health authority, to ban the marketing of six vaping flavors from Vuse Alto, a brand of the group, which represent a large part of its turnover.

RATE

Bond yields, which increased significantly on Thursday after the American CPI, fell on Friday: the American ten-year yield lost 10.3 basis points, to 4.6103%, while its German equivalent dropped around seven points, to 2.711%.

The latter could record its sharpest decline over the entire week since mid-July, with the conflict between Israel and Hamas leading in particular to a retreat towards safe assets, which pushes down their yield.

CHANGES

The dollar is stable (-0.05%) against a basket of reference currencies after climbing 0.8% on Thursday to 106.6 points, its highest level in one session since March 15.

The euro is at $1.0519, down 0.07% and the pound sterling is trading at $1.2172, practically stable (-0.01%).

OIL

Oil prices are jumping on new U.S. sanctions on Russian crude exports, heightening supply concerns in an already tight market, with global crude stocks likely to fall in the fourth quarter.

Brent rose 3.98% to $89.42 per barrel and American light crude (West Texas Intermediate, WTI) rose 4.15% to $86.35.

(Written by Claude Chendjou, edited by Blandine Hénault)

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