by Diana Mandia

(Reuters) – Wall Street is expected to be in disarray and the European stock markets are moving in the green at mid-session, with the exception of a CAC 40 weighed down by luxury, while data on inflation in the euro zone strengthened the case for another interest rate cut this month. Futures on New York indices signal a Wall Street opening down 0.19% for the Dow Jones, while the Standard & Poor’s-500 and the Nasdaq are expected up 0.02% and 0.19%. respectively.

In Paris, the CAC 40 is stable (-0.01%) at 7.6625.25 points around 11:39 GMT. In Frankfurt, the Dax advances by 0.37% and in London, the FTSE 100 gains 0.50%.

The EuroStoxx 50 index is up 0.17%, the FTSEurofirst 300 by 0.36% and the Stoxx 600 by 0.36%.

The Parisian index, which had already closed the day before with a loss of 2% due to the fall in the automobile sector, geopolitical fears and uncertainties linked to the budgetary situation in France, is also lagging behind on Tuesday, hit this time – this by the drop in luxury values ​​after a downgrading of Goldman Sachs’ recommendation on Kering and less than optimistic comments on the impact of economic recovery measures in China.

In a note published Tuesday, Goldman Sachs says the measures announced last week by China, which initially sent luxury stocks soaring, are “unlikely” to have a positive near-term impact on high-end consumer spending. of range. UBS also estimated on Tuesday that Chinese measures may not be enough to trigger a rebound in demand for luxury goods in the Asian giant.

French stocks also remain on alert before Prime Minister Michel Barnier’s general policy speech, scheduled for this Tuesday from 1:00 p.m. GMT, which promises to be high risk in a context of political fragmentation and budgetary scarcity.

Public spending cuts and targeted tax increases will be part of the prime minister’s plans to reduce the country’s budget deficit, government spokeswoman Maud Bregeon said on Tuesday.

The Paris Stock Exchange’s losses contrast with gains in its main European counterparts, supported by falling bond yields, as euro zone inflation fell below 2% for the first time in more than three years. years, fueling hopes of a third rate cut at the ECB meeting this month.

Bank of Finland Governor Olli Rehn said on Tuesday there was now more reason to justify lower borrowing costs in October, especially given the bloc’s recent weakening growth outlook. tilts the scales in the same direction.

The latest activity indicators are not in fact reassuring: manufacturing activity in the euro zone fell in September at its fastest rate since the start of the year, demand having fallen sharply despite price falls for factories, showed a survey published Tuesday.

In the United States, Federal Reserve Chairman Jerome Powell on Monday suggested his preference for a slower rate cut, saying the central bank would likely stick to quarter-point rate cuts. percentage after a 50 basis point reduction last month.

VALUES TO FOLLOW AT WALL STREET

The New York Stock Exchange is expected to be hesitant at the opening on Tuesday, with investors remaining cautious before the publication of the ISM indicator on manufacturing sector activity and a series of data on the labor market.

Markets will closely monitor the impact of a strike by dockworkers on the US East Coast and Gulf of Mexico, which is massively disrupting the flow of shipping in the country.

VALUES IN EUROPE

In Paris, Kering SA lost 0.91% after Goldman Sachs lowered its recommendation to “sell”, while L’Oréal, LVMH and Hermès dropped between 0.7% and 1.8%. The European segment of the sector fell by 0.34%.

The European automobile sector (-0.07%) on the Stoxx 600 is still losing ground after a series of profit warnings, Volkswagen losing 1.1%, Aston Martin 2.9%, Renault 2.4% . Stellantis, however, recovered and advanced 1.1% after Monday’s losses.

The banking sector is in the red (-0.56%), while interest rates could fall more quickly than expected, estimate Morgan Stanley analysts.

In Frankfurt, Covestro gained 3.7% while Abu Dhabi’s public oil company, ADNOC, announced on Tuesday that it had agreed to buy the chemicals giant.

RATE

Euro zone bond yields fell on Tuesday as inflation data strengthened the case for faster rate cuts than market participants expected.

The ten-year German Bund yield fell 8 basis points to 2.0530%, its lowest since January, while two-year lost 3.2 to 2.0420%.

In the United States, the yield on ten-year Treasuries fell by 5.9 basis points to 3.7429%.

CHANGES

The dollar gained 0.31% against a basket of benchmark currencies, with traders believing that the Fed is in no hurry to lower rates.

The euro in turn lost 0.44% to 1.1085 dollars.

OIL

Oil prices retreat on Tuesday as prospects for strong supply and rapid growth in global demand outweigh fears over escalating conflict in the Middle East and its impact on the region’s crude exports .

Brent fell 0.59% to $71.28 per barrel and American light crude (West Texas Intermediate, WTI) lost 0.69% to $67.70.

MAIN ECONOMIC INDICATORS ON THE AGENDA FOR OCTOBER 1:

COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS

USA 2:00 p.m. ISM manufacturing indicator September 47.5 47.2

USA 2:00 p.m. Job offers (August survey 7,655 7,673

JOLTS) million million

THE SITUATION ON THE MARKETS

(Some data may have a slight lag)

(Writing by Diana Mandiá, editing by Kate Entringer)

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