by Claude Chendjou
PARIS (Reuters) – Wall Street should start to fall again at the opening on Friday pending the publication of an inflation indicator in the United States, while the European stock markets are on a hesitant note at mid-session , penalized in part by the decline in technology and growth stocks, as well as Nike’s warning. New York index futures signal Wall Street opening down 0.29% for the Dow Jones, 0.06% for the Standard & Poor’s 500 and 0.15% for the Nasdaq. In Paris, the CAC 40 nibbled 0.04% to 7,574.32 points around 11:40 GMT. In Frankfurt, the Dax lost 0.02%. In London, the FTSE advanced 0.15%, supported by raw materials.
The pan-European FTSEurofirst 300 index gained 0.02%, while the EuroStoxx 50 in the euro zone lost 0.2%. The Stoxx 600 drops 0.01% but is heading towards a second monthly gain in a row.
Investors are exercising caution while the main indices in Europe and the United States are at record levels or close to their peaks, the S&P-500 having gained nearly 24% since the start of the year and the Stoxx 600 more than 12%.
“We started 2023 on a rather pessimistic footing, but over the course of the year things have not turned out to be as bad as feared. The battle against inflation has largely been won, and if the ECB can start to cut rates next year, we hope the slowdown will not be too deep,” underlines Stuart Cole, chief macroeconomist at Equiti Capital.
The results for 2023 actually show that most of the negative predictions have been thwarted.
Trade this Friday is also relatively calm, many participants having already gone on vacation for the Christmas holidays while the European markets will be closed on Monday.
The day nevertheless remains rich in economic indicators in the United States, where we are notably expecting at 1:30 p.m. GMT the statistics of American household income and expenditure, which includes the PCE price index, the preferred measure of inflation by the US Federal Reserve. The Reuters consensus forecasts a deceleration in prices to 2.8% over one year, which would support market expectations of a Fed rate cut from March.
VALUES TO FOLLOW AT WALL STREET
Nike fell 11% in pre-market trading after announcing a two billion dollar savings plan and lowering its annual sales forecast. Foot Locker lost 6.3% in its wake.
Electronic Arts, Take-Two Interactive Software, Netease, Roblox and Tencent Music Entertainment Group fell 1% to nearly 24% in pre-market trading after China’s announcement of a regulatory project aimed at limiting spending linked to video games.
VALUES IN EUROPE The Dutch technology investment group Prosus (-17.05%), largest shareholder of Tencent (-12.35%), and to a lesser extent Ubisoft (-4.28%), are suffering in reaction to the announcement of restrictions in China on video games.
The new technologies index on the Stoxx 600 fell by 1.56%.
European sports equipment manufacturers and distributors such as Adidas (-5.72%), Puma (-6.1%), JD Sports (-5.0%) are stumbling after Nike lowered its forecasts.
The personal and household consumption goods index fell by 0.65%.
The energy (+0.74%) and basic resources (+0.78%) segments offer some support.
RATE The ten-year German Bund yield rose a little more than one basis point, to 1.965%, but remains below the 2% mark, the lowest since March.
In the United States, the yield on Treasury bills of the same maturity fell by around three basis points, to 3.8652% compared to a peak of more than 5% reached in October.
EXCHANGES The dollar fell 0.27% against a basket of international currencies, to a four-month low. Over the week as a whole, the greenback is expected to lose 0.73% after falling 1.3% the previous week following the Fed’s announcements, which opened the way to a rate cut in 2024.
The euro is trading at $1.1026 (+0.16%) and the pound sterling at $1.274 (+0.41%).
OIL
The oil market rebounded on Friday and was heading towards a weekly gain of almost 5% linked to geopolitical tensions and attacks in the Red Sea.
Brent rose 0.91% to $80.11 per barrel and American light crude (West Texas Intermediate, WTI) rose 1.11% to $74.71.
(Written by Claude Chendjou, edited by Blandine Hénault)
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