by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to open slightly higher on Monday and European stock markets are mixed at the midpoint in a session marked by a wait-and-see attitude, particularly with data on US inflation.
New York index futures point to a 0.09% opening gain for the Dow Jones, 0.16% for the Standard & Poor’s 500 and 0.13% for the Nasdaq.
In Paris, the CAC 40 rose 0.11% to 7,585.58 points at around 10:45 GMT. In Frankfurt, the Dax fell 0.19%, despite the morale of German entrepreneurs (Ifo index) having eroded less sharply than expected in August. In London, the stock market is closed for a public holiday.
The pan-European FTSEurofirst 300 index fell by 0.02%, the Eurozone’s EuroStoxx 50 by 0.14% and the Stoxx 600 by 0.01%.
The weakness of the movements in Europe on Monday reflects a certain caution while the Stoxx 600 touched a three-week high last Friday after three weekly gains in a row.
“The financial markets are running out of steam after the rebound,” summarizes Jeanne Asseraf-Bitton, head of research and strategy at BFT Investment Managers.
Interest rate-sensitive sectors such as real estate (+0.69%) and new technologies (-0.54%) are at the opposite end of the scale on the Stoxx 600.
Investors are awaiting the eurozone inflation figures for August and the US PCE price index for July on Friday. Before that, they will have seen the second estimate of US gross domestic product (GDP) for the second quarter on Thursday, while the results of Nvidia, the flagship artificial intelligence stock, will liven up the technology sector on Wednesday.
These data are essential to support the prospect of a September 18 drop in interest rates in the United States following the comments to this effect on Friday by Jerome Powell, the chairman of the American Federal Reserve (Fed), at the Jackson Hole symposium.
At the annual meeting of top central bankers, Philip Lane, chief economist at the European Central Bank (ECB), noted that eurozone inflation had made “good progress” towards the 2% target, but that success was not yet assured and that tight monetary policy was therefore still needed. The ECB’s next monetary policy decision is expected on September 12.
VALUES TO FOLLOW ON WALL STREET
Nvidia is up nearly 1% in pre-market trading on Monday as the group is due to publish its second-quarter results on Wednesday evening. The semiconductor giant’s financial statements will be particularly closely watched, as its stock has gained more than 160% since the start of the year, which propelled it to second place in market capitalization on Wall Street on Friday, behind Apple.
VALUES IN EUROPE
Telecom Italia rose 2.71% after reports that Italian banker Claudio Costamagna is working on a plan to bring together a group of investors who may be interested in buying Vivendi’s stake (+0.42%) in the Italian telecoms group.
RATE
The yield on 10-year US Treasury notes fell 2.1 basis points to 3.7857%, after a 6.1-point decline on Friday, continuing to react to Jerome Powell’s comments on a September rate cut.
The yield on the German Bund of the same maturity is practically stable, at 2.231%, after the cautious tone adopted by Philip Lane.
The French OAT rate is up 1.2 basis points, at 2.942% as Emmanuel Macron continues his consultations with a view to appointing a Prime Minister, while the head of Medef, Patrick Martin, notes concern among business leaders about the political situation in France.
CHANGES
The dollar rose 0.10% against a basket of benchmark currencies on Monday, after hitting a 13-month low of 100.6 points at the end of last week.
The euro is now down 0.14% at $1.1174 from a session high of $1.1205, its highest level since July 2023. Sources have told Reuters that ECB officials are leaning towards another rate cut in September after the one decided in June.
OIL
The oil market is rising on fears of escalating tensions in the Middle East, which could disrupt supplies.
No agreement on a ceasefire in the Gaza Strip was reached during the round of indirect negotiations between Israel and Hamas which ended on Sunday in Cairo.
Brent rose 1.89% to $80.52 per barrel and US light crude (West Texas Intermediate, WTI) rose 1.92% to $76.27.
(Written by Claude Chendjou, edited by Sophie Louet)
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