by Pauline Foret
(Reuters) – Wall Street is expected to fall, like the European stock markets which widen their losses at mid-session, investors showing caution at the approach of a new wave of company results as well as the American presidential election. New York index futures signal Wall Street opening slightly lower, indicating a decline of 0.25% for the Dow Jones, 0.33% for the Standard & Poor’s-500 and 0.58% for the Nasdaq. In Paris, the CAC 40 lost 0.85% to 7,547.96 points around 11:00 GMT. In Frankfurt, the Dax fell by 0.79% and in London, the FTSE by 0.21%.
The pan-European FTSEurofirst 300 index is down 0.48%, the eurozone’s EuroStoxx 50 is down 0.82% and the Stoxx 600 is down 0.49%.
Of the companies in the S&P-500, 114 are scheduled to report quarterly results this week, including International Business Machines, Tesla and Coca-Cola. The microconductor sector will also be the center of attention in the wake of Texas Instruments’ results.
As for those that have already published their results, 83.1% exceeded expectations, compared to an average of 79.1% for the previous four quarters, according to LSEG data.
This strong start to the earnings season, combined with economic data considered reassuring and growing optimism about the possibility that the Fed will cut rates, allowed the S&P-500 to reach record highs last week.
However, the imminent arrival of the presidential elections in the United States is sowing uncertainty, especially since Republican candidate Donald Trump seems to have regained the lead in certain key states.
Donald Trump’s policies on tariffs, taxes and immigration are seen as inflationary, weighing on bonds but strengthening the dollar. Trump is also expected to take a favorable stance towards cryptocurrencies.
VALUES TO FOLLOW AT WALL STREET [L8N3LX0KM]
Boeing proposed a new offer on Saturday that could end a five-week strike, sending the stock higher in pre-market trading. Employees will be able to vote Wednesday on a plan that includes a 35% pay increase over four years. Furthermore, the aircraft manufacturer announced on Sunday the sale of one of its defense units to Thales.
VALUES IN EUROPE
Forvia gains 7.74%, rising to the top of the SBF 120, after declaring that it had been chosen by the Chinese electric vehicle manufacturer BYD for the construction of its second factory in Europe.
RATE
Bond yields rose sharply on Monday, galvanized by speculation around a possible cut in key rates from the Federal Reserve after the latest reduction announced by the European Central Bank.
The yield on ten-year Treasuries rose 5.3 basis points to 4.1282%, and two-year treasuries rose 3.4 basis points to 3.9892%.
The yield on the ten-year German Bund increased by 6.5 basis points to 2.2490%, the two-year by 4.5 basis points to 2.1510%.
CHANGES
Driven by the rise in bond yields and by bets on the possibility of a victory for Donald Trump in the US presidential election on November 4, the dollar strengthened this Monday.
The dollar gained 0.15% against a basket of reference currencies.
The euro lost 0.16% to 1.0848 dollars.
OIL
Oil prices rose on Monday, partly recovering from losses caused last week by concerns over demand in China.
Brent rose 1.75% to $74.34 per barrel and American light crude (West Texas Intermediate, WTI) rose 2.09% to $70.67.
(Written by Pauline Foret, edited by Augustin Turpin)
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