by Claude Chendjou

PARIS (Reuters) – The main European stock markets are expected to rise cautiously on Thursday before the publication of numerous economic indicators, including inflation figures in the euro zone and the United States.

According to the first available indications, the Parisian CAC 40, which has gained 5.54% at this stage since the start of the month, should gain 0.22% at the opening on Thursday. The Dax in Frankfurt could gain 0.33%, while the FTSE 100 in London should advance 0.14%. The EuroStoxx 50 index is expected to increase by 0.25%.

Optimism on stocks has been fueled in recent sessions by a clear easing in the bond compartment, with money markets counting on a 110 basis point (bps) cut in European Central Bank (ECB) rates in 2024.

In the United States, several officials of the American Federal Reserve (Fed) like Christopher Waller have even suggested that the central bank will reduce its borrowing costs in the months to come.

The Fed’s Beige Book, which serves as a working basis for the FOMC, the central bank’s monetary policy committee, also reported a modest slowdown in economic activity in recent weeks, reinforcing the scenario of a soft landing of the economy.

The Fed will meet on December 12 and 13, on the eve of decisions by the ECB and the Bank of England (BoE).

The stock market indices being at high levels throughout the month, the session should however be cautious until the publication at 10:00 GMT of consumer price figures in the euro zone and at 1:30 p.m. GMT of the PCE price index in the United States, a statistic included in the indicator of American household income and expenditure.

A WALL STREET

The New York Stock Exchange ended in disarray on Wednesday, comments from Fed officials having fueled uncertainty over the duration of its monetary tightening.

The Dow Jones index gained 0.04%, or 13.44 points, to 35,430.42 points.

The broader S&P-500 lost 4.31 points, or 0.09%, to 4,550.58 points.

The Nasdaq Composite fell 23.27 points (-0.16%) to 14,258.49 points.

While they had recorded gains at the start of the session, the S&P-500 and the Nasdaq finally fell into the red, with only the Dow Jones remaining slightly in the green, after the president of the Richmond Fed, Thomas Barkin , expressed skepticism that the US central bank had completed its cycle of monetary tightening.

“The market had made significant gains, so there was some profit taking and repositioning. There is some form of consolidation happening,” commented Tim Ghriskey, strategist at Ingalls & Snyder in New York. Humana and Cigna Group fell 5.5% and 8.1%, respectively, after the Wall Street Journal reported merger talks. General Motors jumped 9.4% following the announcement of a $10 billion share buyback program.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index ended with a gain of 0.31% to 33,423.65 points, and the broader Topix gained 0.44% to 2,374.93 points.

In terms of economic indicators, retail sales in Japan increased in October by 4.2% year-on-year, the twentieth consecutive month of increase, while industrial production increased in October by 1.0% compared to the previous month.

The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) rose 0.1%. It is on track to close the month with a gain of 6.9%, its best monthly performance since January.

In China, the Shanghai SSE Composite fell by 0.16% and the CSI 300 fell by 0.06% while manufacturing activity contracted in November to 49.4, according to the official PMI index, a sign that more stimulus measures are needed.

VALUES TO FOLLOW IN EUROPE:

EXCHANGES/RATES

The dollar, still close to a trough of more than three months, was down 0.03% on Thursday against a basket of reference currencies. Over the month as a whole, the greenback is heading towards a decline of 3.7%, its biggest monthly decline in a year.

The euro is trading at $1.0973 (+0.05%) and the pound sterling at $1.2701 (+0.06%).

On the bond market, the yield on ten-year US Treasury bonds rose a little more than one basis point, to 4.2859%. Over the month as a whole, however, it has lost more than 60 points at this stage, its sharpest monthly fall since the end of 2008.

OIL

The oil market is progressing slightly as OPEC+ meets this Thursday and could decide on further cuts in its production for next year.

Brent rose 0.45% to $83.47 per barrel and American light crude (West Texas Intermediate, WTI) rose 0.51% to $78.26.

MAIN ECONOMIC INDICATORS ON THE AGENDA FOR NOVEMBER 30

COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS

FROM 07:00 Retail sales October +0.4% -0.8%

– over one year -2.0% -4.3%

FROM 08:55 Unemployment rate November 5.8% 5.8%

FR 07:45 October consumer spending -0.2% +0.2%

households

FR 07:45 Gross domestic product (GDP) Q3 +0.1% +0.1%

final

FR 07:45 HICP consumer prices November +0.0% +0.2%

(1st estimate)

– over one year +4.1% +4.5%

FR 07:45 Producer prices October na +0.7%

– over one year nd -1.7%

EZ 10:00 Consumer prices HICP November +2.7% +2.9%

(1st estimate)

USA 1:30 p.m. Unemployment registrations week. to 25 220,000 209,000

november

USA 1:30 p.m. Household income October +0.2% +0.3%

Consumer spending n/a +0.4%

PCE price index +0.1% +0.4%

– over one year +3.0% +3.4%

(Written by Claude Chendjou, edited by Blandine Hénault)

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