by Claude Chendjou

PARIS (Reuters) – Wall Street is expected to open higher on Friday and European stock markets are also rebounding at mid-session amid renewed risk appetite after a week of turbulence, particularly in the technology sector, as the corporate results season continues.

New York index futures point to a 0.60% opening gain for the Dow Jones, 0.78% for the Standard & Poor’s 500 and 1.06% for the Nasdaq.

In Paris, the CAC 40 rebounded by 0.83% to 7,488.42 points at around 11:45 GMT the day after a 1.15% decline. In Frankfurt, the Dax advanced by 0.25% and in London, the FTSE gained 0.55%.

The pan-European FTSEurofirst 300 index rose by 0.41% and the EuroStoxx 50 of the eurozone by 0.91%. The Stoxx 600, driven in particular by new technologies (+0.83%) and luxury (+2.45%), gained 0.52%.

Over the week as a whole, the CAC 40 is however heading towards a loss of 0.61%, while the Stoxx 600 could narrowly return to green, avoiding a second consecutive weekly decline.

The rebound in European stocks on Friday comes in the wake of a recovery in US technology stocks after a week of massive selling in the sector, linked in particular to the results considered disappointing by Alphabet and Tesla, two of the “Magnificent Seven” which have fuelled the market rally since the start of the year.

The market is regaining its colour as investors await the monthly indicator of PCE prices in the United States at 12:30 GMT, the preferred measure of inflation by the American Federal Reserve, which meets on July 30 and 31.

Traders, who are expecting the Fed to make its first rate cut in September, are hoping the indicator will confirm the decline in inflationary pressures, as the second-quarter core PCE price index showed a slowdown to 2.9% on Thursday from 3.7% in the first quarter.

In a sign of the ebb of fear on the markets, the volatility index on Wall Street fell by 5.25% to 17.49 points after having climbed the previous day to a 14-week peak.

VALUES TO FOLLOW ON WALL STREET

Megacaps Apple, Nvidia, Alphabet, Microsoft, Meta Platforms, Amazon.com and Tesla are up 0.7% to 2.2% in pre-market trading.

Chip giants Intel, Broadcom, Qualcomm, Micron Technology and Arm Holdings are each up about 2%.

VALUES IN EUROPE

Many results are livening up trading in Europe, with Hermès in particular outperforming its peers in the second quarter, increasing sales by 13.3%. The luxury handbag maker’s stock gained 3.08%, while Kering and LVMH rebounded by 1.33% and 1.14% respectively.

In other notable releases in Paris, Capgemini plunged 6.92% after lowering its annual revenue target, while Bureau Veritas climbed 5.98% after better-than-expected first-half financial results.

EssilorLuxottica jumped 7.85% after the CEO confirmed that Facebook parent company Meta would eventually take a stake in its capital.

The results of Air Liquide (+1.11%), Spie (+1.62%), Amundi (+2.04%) and Vallourec (+0.52%) were welcomed, while Bouygues disappointed (-0.24%).

Elsewhere in Europe, Mercedes-Benz recovered 0.10% after an initial fall linked to the reduction of its profit margin forecast for its main automobile division.

Holcim fell 0.50% as the group lowered its full-year sales forecast after reporting slightly lower-than-expected second-quarter sales.

BASF fell 2.41% despite the group’s commitment to regain its pricing power in order to accelerate its profit growth in the second half.

CHANGES

The dollar rose 0.04% against a basket of benchmark currencies ahead of US inflation figures.

The euro gained 0.11% to 1.0856 dollars.

The yen, trading at 154.6 to the dollar, headed for its best weekly performance in nearly three months on Friday as traders backed away from bets that the Japanese currency would weaken amid concerns that Japanese authorities would intervene in the currency markets.

RATE

The yield on 10-year U.S. Treasury notes fell about two basis points (bps) to 4.2348%, after falling 6.5 bps on Thursday.

The yield on the German Bund of the same maturity rose by around three basis points to 2.439% with the return of risk appetite in Europe.

OIL

Oil prices fell on Friday and are on track for a third straight weekly decline, driven by subdued demand in China and the prospect of a ceasefire deal in Gaza that could ease tensions in the Middle East and the resulting supply problems.

Brent fell by 0.5% to $81.96 per barrel and US light crude (West Texas Intermediate, WTI) by 0.43% to $77.94.

(Written by Claude Chendjou, edited by Blandine Hénault)

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