PARIS (Reuters) – Wall Street is expected to decline on Wednesday and European stock markets are falling mid-session as company results, concerns about growth and the American elections put pressure on risky assets. New York index futures suggest Wall Street opening in the red, with the Dow Jones down 0.51%, while the Standard & Poor’s 500 declines 0.28% and the Nasdaq falls 0. .42%.
In Paris, the CAC 40 fell by 0.78% to 7,476.4 points around 11:00 GMT. The Dax in Frankfurt lost 0.38%, while the FTSE in London declined by 0.4%.
The pan-European FTSEurofirst 300 index lost 0.36%, the EuroStoxx 50 fell by 0.58% and the Stoxx 600 declined by 0.38%.
The results season continues on both sides of the Atlantic, and investors remain cautious after a series of disappointing figures.
L’Oréal, Deutsche Bank and Volvo Cars reported results that were less good than expected.
Added to the results are concerns about the European economic trajectory: officials at the European Central Bank (ECB) are reportedly starting to consider lowering rates below the neutral rate, in order to support the activity of the monetary bloc.
The PMI indicators expected on Thursday will allow investors to clarify their monetary policy outlook: monetary markets now estimate a 50 basis point cut in December to be 20% likely.
In the United States, the publication of the Federal Reserve’s “Beige Book” will provide more information on current economic conditions and could confirm that a soft landing in activity remains possible.
Finally, uncertainty over the outcome of the American elections weighs heavily, even though each of the candidates has a very distinct project.
A victory for Kamala Harris, the Democratic candidate, would have limited impacts on global assets, as investors believe it would be a continuation of Joe Biden, the current president.
Conversely, a victory for Donald Trump would have much greater impacts, because the Republican candidate proposes in particular to increase customs duties, lower taxes or even limit the independence of the Fed.
“The markets have started to price in (the prospect of a Donald Trump victory) which would result in a more inflationary economic policy and a more aggressive trade policy,” note Natixis analysts.
“Also, we are witnessing a “depricing” of the Fed’s rate cuts, an increase in US long-term rates, a rebound in the dollar and gold prices, and emerging currencies in sharp decline due to fears of strong trade tensions.
VALUES TO FOLLOW AT WALL STREET
Tesla results are expected after the close. Figures from Boeing and Coca-Cola are notably expected before the opening.
Texas Instruments announced on Tuesday that it expects fourth-quarter sales to be lower than analysts’ estimates as its customers limit their orders.
VALUES IN EUROPE
L’Oréal fell by 3.7%, the red lantern of the CAC 40, the French cosmetics giant having published on Tuesday a quarterly turnover lower than expectations, marked by the deterioration of demand in China and less growth for its products dermatological.
Verallia reported on Tuesday a drop in its turnover in the third quarter but maintained its Ebitda target for 2024 and takes 8.9%.
ID Logistics reported on Tuesday a growth of 20.1% in its turnover on a comparable basis and is up 9.7%.
Deutsche Bank raised its provisions for non-performing loans on Wednesday amid a deterioration in the German economy, sending the stock down 1.9% despite profit growth.
The British advertising group WPP announced on Wednesday that it had returned to organic growth in the third quarter, and climbed 4.7%. Heineken announced quarterly turnover above expectations on Wednesday, gaining 2.2%.
Paint maker AkzoNobel reported third-quarter revenue and profit below consensus and declined 4.6%.
RATE
Eurozone short yields are falling as investors believe the ECB could cut rates by 50 basis points in December to support a slowing European economy.
The German ten-year yield fell by 1.2 bp to 2.305%, that of the two-year rate lost 6.8 bp to 2.131%.
The yield on the ten-year Treasury increased by 1.4 bps to 4.2197%, while the yield on the two-year security increased by 0.9 bps to 4.0459%.
CHANGES
Investor nervousness benefits the dollar, a safe haven asset, and puts pressure on the euro. The dollar gained 0.31% against a basket of reference currencies, the euro eroded by 0.18% to 1.0778 dollars, and the pound sterling lost 0.06% to 1.2975 dollars.
OIL
Oil is showing a sharp decline, figures from the American Petroleum Institute having shown a stronger than expected increase in crude inventories in the United States last week.
Brent fell by 1.67% to $74.77 per barrel, American light crude (West Texas Intermediate, WTI) weakened by 1.78% to $70.46.
MAIN ECONOMIC INDICATOR ON THE AGENDA OF OCTOBER 23:
COUNTRY GMT INDICATOR PERIOD PREVIOUS CONSENSUS
Zone 2:00 p.m. consumer confidence October -12.5 -12.9
euro
(Written by Corentin Chappron, edited by Kate Entringer)
Copyright © 2024 Thomson Reuters
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.
