by Claude Chendjou

PARIS (Reuters) – The main European stock markets should try on Friday to confirm their recent rebound fueled by luxury and new technologies but the session could be volatile with many economic indicators expected and the expiry of contracts and options in the framework of the “three witches”.

According to the first available indications, the Parisian CAC 40 should gain 0.35% at the opening, the Dax in Frankfurt 0.29% and the FTSE 100 in London 0.25%. The EuroStoxx 50 index is expected to increase by 0.38%.

In today’s indicators, the market in Europe will learn about producer prices in Germany and retail sales in Great Britain, while in the United States the preliminary confidence index from the University of Michigan is expected. and housing resales.

Investors should also digest the latest economic indicators for clues on the timing of central bank rate cuts, notably that of the European Central Bank (ECB), which meets next week.

The latest Reuters survey of economists shows that an ECB rate cut could occur in June and not in April as expected by the markets. In the report of the December meeting of the ECB, published Thursday, the Frankfurt institution estimated that it would still be necessary to be patient with a possible reduction in rates, judging it premature to believe that its fight against inflation is finished.

In the United States, the probability of a first rate cut in March is now assessed by traders at 56% compared to a probability of 80% a month ago, according to the FedWatch barometer.

A WALL STREET

The New York Stock Exchange ended sharply higher on Thursday, driven by investor enthusiasm about artificial intelligence that contributed to gains for Nvidia and other semiconductor makers, even as uncertainty over interest rate weighed particularly on the real estate sector.

The Dow Jones index gained 0.54% to 37,468.61 points.

The broader S&P-500 gained 0.88% to 4,780.94 points.

The Nasdaq Composite advanced 1.35% to 15,055.65 points.

The S&P-500 resumed its ascent on Thursday, coming within 0.3% of its January 2022 closing record.

Among the major sectors of the S&P-500, those particularly sensitive to interest rates, such as real estate (-0.6%) and utilities (-1.05%), ended the session in the red.

Taiwan Semiconductor Manufacturing (TSMC) jumped nearly 10% after forecasting revenue growth of more than 20% in 2024, amid soaring demand for cutting-edge chips used for services of AI.

In the wake of TSMC, Nvidia rose 1.9% to reach a record, with an unprecedented trading volume – almost $28 billion in shares. Its competitor Advanced Micro Devices, up 1.6%, also stood at a peak.

Apple rose 3.3% after BofA Global Research raised its recommendation for the Apple firm to “buy”.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index ended with a gain of 1.4% to 35,963.27 points, while the broader Topix gained 0.72% to 2,510.03 points at the close.

The Japanese indices were driven by the semiconductor compartment, notably Tokyo Electron (+6.03%) and Advantest (+8.2%).

Data today showed that core inflation in Japan slowed for a second straight month in December, reinforcing speculation that the Bank of Japan (BoJ) is not ready to tighten its current monetary policy, which is ultra accommodating.

The MSCI index bringing together stocks from Asia and the Pacific (excluding Japan) gained 0.90% but is heading towards a decline of 2.9% over the whole week, its most marked weekly decline since the mid August.

In China, the Shanghai SSE Composite fell by 0.38% and the CSI 300 lost 0.15%.

VALUES TO FOLLOW IN EUROPE:

EXCHANGES/RATES

The dollar advances 0.09% against a basket of reference currencies.

The euro is stable (+0.02%), at 1.0876 dollars, while the pound sterling stands at 1.2694 dollars (-0.09%).

On the bond market, the yield on ten-year US Treasury bonds increased by three basis points, to 4.1706%, after a gain of four points the day before.

OIL

The oil market is falling again on profit taking after a gain of around 2% on Thursday linked to the expectations of the International Energy Agency (IEA) and OPEC for robust growth in demand this year.

Brent fell 0.15% to $78.98 per barrel and American light crude (West Texas Intermediate, WTI) fell 0.12% to $74.17.

MAIN ECONOMIC INDICATORS ON THE AGENDA FOR JANUARY 19:

COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS

GB 07:00 Retail sales December -0.5% +1.3%

– over one year +1.1% +0.1%

FROM 07:00 December producer prices -0.5% -0.5%

– over one year -8.0% -7.9%

USA 3:00 p.m. January confidence index 70.0 69.7

Michigan (1st estimate)

(Written by Claude Chendjou, edited by Blandine Hénault)

Copyright © 2024 Thomson Reuters