PARIS (Reuters) – Wall Street is expected to fall at the opening on Wednesday, while European stock markets decline mid-session, worried about the escalation of tensions in the Middle East despite the rebound in activity in China and good business results.
Futures on New York indices suggest Wall Street opening in the red, with the Dow Jones dropping 0.3%, while the Standard & Poor’s 500 drops 0.44% and the Nasdaq 0.56%.
In Paris, the CAC 40 declined by 0.58% to 6,988.97 points around 10:33 GMT, compared to 0.45% for the FTSE in London, and 0.6% for the Dax in Frankfurt.
The pan-European FTSEurofirst 300 index lost 0.4%, compared to 0.66% for the EuroStoxx 50 and 0.61% for the Stoxx 600.
The strike against a Gaza hospital overnight from Tuesday to Wednesday revived concerns about a possible escalation of the conflict between Israel and Hamas, while American President Joe Biden arrived in Israel on Wednesday to try to ease tensions. .
Joe Biden was due to attend a summit bringing together Israel’s neighbors, which was canceled after the strike, while Iran promised a “tough response” to the hospital bombing and Hezbollah a “day of anger without precedent”, bringing crude prices to a two-week high.
The good Chinese figures fail to reassure the markets, the gross domestic product (GDP) having progressed in the third quarter more strongly than expected, at 4.9% at an annual rate, while retail sales for the month of September were up 5.5%, compared to a consensus of 4.9%.
Complicating the situation, the American economy is proving robust and raising fears of a restrictive monetary policy lasting longer than expected, while corporate results in the United States are surprising with their solidity.
“Between macro solidity, tensions on rates, extreme geopolitical risk and positive micro results for the moment, risky assets continue to hesitate in consolidation mode,” summarize Natixis strategists.
“(Wednesday) morning, the publication of stronger-than-expected Chinese growth failed to push risky assets up against a backdrop of strengthening tensions in the Middle East.”
Six members of the Board of Governors of the Federal Reserve will speak on Wednesday before Jerome Powell, president of the institution, while the Fed’s Beige Book and data on housing construction in the United States are expected during the day.
OIL
Crude is up sharply, worried about rising tensions in Israel and supported by good Chinese economic figures.
Brent rose 3% to $92.6 per barrel, with light American crude (West Texas Intermediate, WTI) nibbling 3.16% to $89.4.
VALUES TO FOLLOW IN WALL STREET
Semiconductor stocks continue to decline, with Nvidia warning on Tuesday that it could be forced to move certain operations out of countries that are within the scope of US export restrictions.
Amazon.com will become a customer of Microsoft’s office productivity tools in a deal worth more than $1 billion, news site Insider reported Tuesday.
Aviation stocks are declining after United Airline lowered its fourth-quarter profit forecast.
VALUES TO FOLLOW IN EUROPE
Nexi jumped 9.87% to the top of the Stoxx 600 after press information according to which CVC Capital Partners would consider a potential offer for the payments company. Its French competitor Worldline takes 3.96%, leading the CAC 40, with investors expecting that an offer will eventually be made for Worldline.
Air France drops 4.48% after saying it would stop operating most domestic flights from Paris-Orly airport by summer 2026, to cope with falling demand for domestic flights.
In Europe, ASML dropped 1.62%, the semiconductor equipment manufacturer having announced that it anticipates almost stable turnover for 2024, which weighs on the sector. The new technologies index lost 1.42%.
Energy posted the best performance of the Stoxx 600 sectors, up 0.76%, supported by the progression of oil which is worried about the escalation in the Middle East.
The German sports equipment manufacturer Adidas gained 4.75% thanks to the increase on Tuesday evening of its turnover forecast for the whole year.
RATE
Yields are falling after jumping at the start of the week on concerns about the resilience of the US economy, with investors seeking safe assets amid escalating tensions in the Middle East.
The ten-year Treasury yield fell 1.5 bps to 4.8322%, with the two-year yield falling 3.2 bps to 5.1819%.
The German ten-year yield is stable at 2.882%, with that of the two-year rate eroding by 1.3 bp to 3.233%.
CHANGES
A wait-and-see attitude remains on the foreign exchange markets, which are awaiting numerous comments from members of the Fed’s board of governors and the publication of the Beige Book. The dollar is standing still against a basket of reference currencies, the euro loses 0.18% to 1.0556 dollars and the pound sterling is immobile at 1.2177 dollars.
NO MORE MAJOR ECONOMIC INDICATOR EXPECTED THIS DAY
(Written by Corentin Chappron, edited by Kate Entringer)
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