by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to rise on Thursday at the opening and the European stock markets are also progressing at mid-session, market sentiment being driven by China which is increasing its announcements of revival of its economy, and forecasts of Micron who fuel optimism about artificial intelligence.
The trend could, however, change with statements from central bankers expected from 1:00 p.m. GMT, including those from Christine Lagarde and Jerome Powell, respectively at the head of the European Central Bank (ECB) and the American Federal Reserve (Fed).
New York index futures signal Wall Street opening up 0.48% for the Dow Jones, 0.80% for the Standard & Poor’s 500 and 1.46% for the Nasdaq.
In Paris, the CAC 40 rose 1.54% to 7,682.5 points around 11:20 GMT. In Frankfurt, the Dax advances by 1.14% and in London, the FTSE gains 0.19%, the potential gain being limited by oil stocks.
The pan-European FTSEurofirst 300 index rose by 0.98% and the eurozone’s EuroStoxx 50 by 1.74%. The Stoxx 600 gained 1.02%, very close to its record of 526.66 points reached on August 30. It is driven in particular by the luxury (+4.95%) and basic resources (+3.88%) compartments, which are particularly sensitive to China.
After a series of measures announced since Monday by the People’s Bank of China (BPC), Chinese leaders committed Thursday to implementing the “necessary budgetary expenditures” to achieve the economic growth target of around 5% planned for this year at the monthly meeting of the Politburo, the governing body of the Chinese Communist Party (CCP).
“There is some optimism that China could offer more stimulus measures in the future,” notes Fiona Cincotta, markets analyst at City Index, adding to anticipate a continuation of the current stock market rally.
The technology sector in Europe (+3.42%) also contributes to the good performance of stock indices, with the American group Micron Technology anticipating higher than expected revenues thanks to demand linked to artificial intelligence (AI), a promising theme on the markets.
Conversely, the energy sector in Europe (-3.10%) is weighed down by information according to which Saudi Arabia is preparing to abandon its unofficial objective of a barrel of oil at 100 dollars to regain share market.
VALUES TO FOLLOW AT WALL STREET
Micron Technology jumps 15.6% in pre-market trading after its current quarter forecast of record Q1 revenue of $8.7 billion, with a margin of error of plus or minus 200 million dollars.
In its wake, Nvidia, Qualcomm, Marvell Technology and Arm Holdings gained 2% to 3% before the opening of the session in New York.
VALUES IN EUROPE
Ubisoft fell by 18.14% after lowering its financial targets for 2024-2025 on Wednesday and delaying the launch of its next game “Assassin’s Creed Shadows”.
Sodexo fell 4.94%, penalized by information from the Bloomberg agency according to which the collective catering group was interested in its American competitor Aramark.
H&M fell 3.67%, the retailer having lowered its margin target and posted third-quarter profit below expectations.
Commerzbank jumped 5.85% as the German bank announced on Thursday that it would hold a first round of discussions with UniCredit on Friday.
RATE
Bond yields in the euro zone fell on Thursday after new announcements from China.
“Risk sentiment is strengthening this morning due to rumors of an additional injection of $142 billion by Chinese authorities into the banking system,” analysts at Danske Bank wrote in a note.
The ten-year German Bund yield fell 4.2 basis points, to 2.146%.
Furthermore, before Christine Lagarde’s intervention (1:30 p.m. GMT), investors are now counting with a probability of around 60% on a reduction in ECB rates next month, while a measure was still excluded last week .
In the United States, where Jerome Powell is due to speak at 1:20 p.m. GMT, the yield on ten-year Treasury bonds lost 1.3 basis points, to 3.7677%.
CHANGES
The dollar nibbles 0.04% against a basket of reference currencies while the market awaits Jerome Powell, the publication of the third estimate of American GDP in the second quarter and the weekly figures of unemployment claims in the country.
The Swiss franc increased by 0.32% against the dollar, to 0.8478, after the decision of the Swiss National Bank to lower its rates by only 25 basis points. Futures markets and some analysts had expected a steeper cut, of 50 basis points, in the wake of the Fed’s announcements last week.
The euro stands at 1.1155 dollars (+0.22%) and the pound sterling at 1.3376 dollars (+0.44%).
OIL
Oil prices are in the red on Thursday, erasing their initial gains, after reports that Saudi Arabia, the world’s largest crude exporter, decided to increase production.
Brent fell by 2.46% to $71.65 per barrel and American light crude (West Texas Intermediate, WTI) by 2.41% to $68.01.
(Written by Claude Chendjou, edited by Blandine Hénault)
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I have over 8 years of experience working in the news industry. I have worked as a reporter, editor, and now managing editor at 247 News Agency. I am responsible for the day-to-day operations of the news website and overseeing all of the content that is published. I also write a column for the website, covering mostly market news.
