by Claude Chendjou

PARIS (Reuters) – The main European stock markets could open on a cautious note for the first session of February, in a consolidation movement, after a generally positive month of January for stocks and recent record highs for the indices.

Investors must also digest for today’s session the announcements the day before from the Federal Reserve (Fed), several indicators, a significant burst of company results and the monetary policy decision of the Bank of England (BoE) to 12:00 GMT.

According to the first available indications, the Parisian CAC 40 should lose 0.78% at the opening, after a record level on Wednesday at 7,702.95 points. The Dax in Frankfurt could fall by 0.66% and the FTSE 100 in London should drop 0.49%. The EuroStoxx 50 index is expected to fall by 0.71%, after having approached its historic peak at 487.45 points the day before.

After the status quo on rates observed by the European Central Bank (ECB) and the American Federal Reserve (Fed), the market expects the BoE to leave the interest rate unchanged. But investors will especially be on the lookout for signs allowing them to anticipate the timing of the rate cut.

Fed Chairman Jerome Powell suggested on Wednesday that the US central bank’s rates would not fall in March, saying he did not have enough certainty about inflation.

On the results side, new technology giants like Apple, Amazon and Meta are expected after the close of Wall Street, while in Europe, BNP Paribas, Sanofi, Dassault Systemes, Deutsche Bank, Shell and Roche should liven up trading.

Today’s macroeconomic indicators include final figures for manufacturing activity in Europe and the United States, the first estimate of inflation in January in the euro zone and the unemployment rate in the currency bloc.

A WALL STREET

The New York Stock Exchange ended sharply lower on Wednesday after the end of the Fed meeting, which dashed hopes of a more accommodating turn in its monetary policy from March.

The Dow Jones index fell 0.82%, or 317.01 points, to 38,150.30 points.

The broader S&P-500 lost 79.32 points, or 1.61%, to 4,845.65 points.

The Nasdaq Composite fell 345.88 points (2.23%) to 15,164.01 points.

The three main indices on Wall Street were already in decline before the press release from the American central bank, due to the weakness of large technology stocks and other securities in the sector following the disappointing results published the previous evening by Alphabet.

They continued to decline as the Fed boss’s press conference progressed.

In terms of company publications, analysts now anticipate growth in the results of S&P-500 companies of 6.1% over one year, compared to 4.7% initially.

In values ​​Alphabet declined by 7.5% due to its advertising revenues and Microsoft rose by 2.7% after reporting quarterly results better than expectations.

IN ASIA

On the Tokyo Stock Exchange, the Nikkei index ended down 0.76% at 36,011.46 points, after recording its best performance in 26 years for the month of January the day before. The broader Topix lost 0.67% to 2,534.04 points at the close.

In China, the Shanghai SSE Composite fell by 0.64%, while the CSI 300 gained 0.07%, in a volatile session where the indices benefited for a time from the publication of the manufacturing PMI index calculated by Caixin/S&P Global. This shows that activity in China increased in January against a backdrop of stabilizing production growth, acceleration in logistics and an increase in new export orders.

VALUES TO FOLLOW IN EUROPE:

EXCHANGES/RATES

The dollar advances 0.16% against a basket of reference currencies

The euro lost 0.28%, to 1.0786 dollars, while the pound sterling stood at 1.2644 dollars (-0.32%).

On the bond market, the yield on ten-year US Treasury bonds was practically stable on Thursday, at 3.9576%, after a decline of 12 points the day before.

The yield on the German Bund of the same maturity stands at 2.199%, up 3.5 basis points, the day after a drop of more than nine points.

OIL

The oil market is progressing slightly with the hope of a rate cut from the Fed in the coming months, even if its president has ruled out a reduction in March. Indicators from China and the real estate stimulus measures unveiled on Thursday also support crude oil prices.

Brent nibbles 0.07% to $80.61 per barrel and American light crude (West Texas Intermediate, WTI) by 0.08% to $75.91.

(Written by Claude Chendjou, edited by Blandine Hénault)

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