by Claude Chendjou

PARIS (Reuters) – Wall Street is expected to open slightly higher on Tuesday ahead of a key U.S. economic indicator, while European stock markets are down mid-session, weighed down in particular by the luxury sector.

New York index futures point to a stable opening on Wall Street (-0.01%) for the Dow Jones, up 0.13% for the Standard & Poor’s 500 and 0.20% for the Nasdaq.

In Paris, the CAC 40 fell by 0.78% to 7,573.12 points at around 11:05 GMT. In Frankfurt, the Dax fell by 0.47% and in London, the FTSE fell by 0.31%.

The pan-European FTSEurofirst 300 index fell by 0.50%, the EuroStoxx 50 of the eurozone by 0.60% and the Stoxx 600 by 0.44%.

In the United States, investors are trying to assess the prospects of a victory for Donald Trump in the US presidential election in November after the assassination attempt that boosted his popularity and allowed him to make a triumphant entrance at the Republican convention on Monday with Ohio Senator JD Vance as his running mate. In the eyes of some market participants, Donald Trump’s return to the White House could translate into an expansionist trade policy and more relaxed regulations.

A new presidency under Donald Trump could, however, also revive the specter of a tariff war.

“The idea that Trump could win a second term is being interpreted as negative for European stocks – mainly because of the protectionist policies that Trump could implement,” writes Fiona Cincotta, markets analyst at City Index.

In addition to the economic implications of a Donald Trump victory, investors are also keeping an eye on macroeconomic data, including monthly retail sales in the United States. This indicator will be published at 1230 GMT and will help gauge how consumers are responding to inflation as the US Federal Reserve (Fed) is expected to cut rates in September.

VALUES TO FOLLOW ON WALL STREET

Shares of companies linked to Donald Trump, such as Trump Media & Technology Group (-8.5%) and Rumble (-1.4%), fell in pre-market trading on Tuesday, victims of profit-taking after having risen sharply on Monday.

Tesla gained 1.6% in premarket trading after news that CEO Elon Musk plans to commit about $45 million a month to a new pro-Trump political action super committee.

VALUES IN EUROPE

Hugo Boss fell 8.25% after lowering its sales forecast for the year amid weakening global demand, particularly in China and the UK. The European luxury sector fell 0.95%, while Kering (-3.0%), Burberry (-3.60%), LVMH (-1.19%) were also in the red.

Scor fell by 24.48% after warning that its life and health (L&H) activities are expected to record a loss in the second quarter. The European insurance sector fell by 1.41%.

Ocado jumped 12.19% as the British group raised its full-year forecast, citing improved profitability at its warehouse technology business.

RATE

The yield on 10-year U.S. Treasury notes fell about five basis points to 4.1808% as traders now expect an interest rate cut by September, with a nearly 86% chance of a 25 basis point cut, according to CME’s FedWatch Barometer.

The yield on the German Bund of the same maturity fell 3.2 basis points to 2.432%, the second decline in two days, ahead of the European Central Bank’s (ECB) monetary policy meeting on Thursday.

CHANGES

The dollar edged up 0.02% against a basket of benchmark currencies on Tuesday after hitting a one-month low of 104.6 points on Monday.

The euro is at 1.0898 dollars (+0.04%) and the pound sterling at 1.2968 dollars (+0.02%).

OIL

Oil prices fell on Tuesday on fears of a slowdown in China’s economy as GDP growth fell short of expectations in the second quarter.

Brent fell by 0.92% to $84.07 per barrel and light American crude (West Texas Intermediate, WTI) lost 1.01% to $81.08.

(Written by Claude Chendjou, edited by Blandine Hénault)

Copyright © 2024 Thomson Reuters