(Reuters) – Wall Street is expected to open higher on Friday while European shares are up mid-session, with optimism prevailing on global markets after encouraging U.S. retail sales data.
New York index futures suggest Wall Street will open in the green, with the Dow Jones up 0.12%, compared to 0.27% for the Nasdaq and 0.12% for the Standard & Poor’s 500. In Paris, the CAC 40 rose 0.43% to 7,455.31 points at around 09:52 GMT. The Dax in Frankfurt strengthened by 0.87%, while the FTSE in London declined by 0.23%.
The pan-European FTSEurofirst 300 index gained 0.5%, the EuroStoxx 50 gained 0.83% and the Stoxx 600 increased by 0.46%.
The Stoxx 600 is set for its best week in more than three months as U.S. retail sales data points to some resilience in consumer spending and eases fears of a looming recession in the world’s largest economy.
Disappointing US jobless claims figures had scared investors in early August.
That sense of optimism is also prevalent on Wall Street, where the VIX stock volatility index has stabilized after hitting record highs last week as investors are confident the Federal Reserve will be able to cut rates in September.
Next week, markets will be looking ahead to the Jackson Hole Symposium, a meeting of global monetary policymakers, where Fed Chairman Jerome Powell is expected to speak.
“Next week will be an important week (…) there are still a lot of expectations around Jackson Hole,” said Julien Lafargue, chief analyst at Barclays Private Bank.
“Barring any data to the contrary, it appears that Jackson Hole will present an opportunity for Powell to anticipate a 25 basis point rate cut in September.” STOCKS TO FOLLOW ON WALL STREET
Applied Materials Corp said it expects fourth-quarter revenue to barely beat consensus, anticipating higher demand for its chipmaking equipment.
Kroger expects to cut costs by $1 billion once its proposed merger with Albertsons is completed.
VALUES IN EUROPE
Bayer jumped 9 percent on the Frankfurt stock exchange on Friday, buoyed by a recent legal victory in its fight to limit the fallout from allegations that its Roundup weedkiller can cause cancer.
UBS gained 1.3% after the Swiss bank said it planned to liquidate a $2 billion (€1.82 billion) real estate investment fund it acquired from its acquisition of Credit Suisse.
RATE
Yields are stabilizing after soaring on Thursday, with U.S. indicators pushing back against a 50bp Fed rate cut in September.
The yield on the German ten-year bond fell by 2.9 bp to 2.234%, while that of the two-year rate lost 1.9 bp to 2.437%.
The 10-year Treasury yield declined 3.2 bps to 3.894%, while the two-year yield dropped 3.2 bps to 4.0686%.
CHANGES
The dollar fell on Friday but remained supported by Thursday’s good figures which demonstrated the resilience of the American economy.
The dollar fell 0.15% against a basket of benchmark currencies, the euro rose 0.16% to $1.0989, and the pound strengthened 0.4% to $1.2902.
OIL
The barrel is eroding but is showing a positive performance over the week after American indicators raised hopes of sustained demand in the world’s largest economy. Negotiations on a ceasefire in Gaza are, however, eroding the barrel’s geopolitical risk premium.
Brent fell by 1.27% to $80.01 per barrel, while US light crude (West Texas Intermediate, WTI) weakened by 1.54% to $76.96.
(Written by Pauline Foret)
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