by Claude Chendjou
PARIS (Reuters) – Wall Street is expected to fall slightly on Wednesday before the publication of numerous macroeconomic indicators and European stock markets are in the red at mid-session, still affected by the threat of an increase in customs duties in the United States . Futures on New York indices signal an opening on Wall Street down 0.10% for the Dow Jones, 0.21% for the Standard & Poor’s 500 and 0.39% for the Nasdaq in a context of wait-and-see attitude.
The market is awaiting, among other things, the second estimate of American GDP in the third quarter and the statistics of household income and expenditure, which includes the PCE inflation indicator, particularly followed by the American Federal Reserve (Fed).
In Paris, the CAC 40 lost 1.31%, to 7,100.52 points, around 11:40 GMT, in a context of political uncertainty, the government of Michel Barnier being threatened by a vote of censure as part of the parliamentary debate on the 2025 budget. In Frankfurt, the Dax fell by 0.74% and in London, the FTSE lost 0.03%.
The pan-European FTSEurofirst 300 index lost 0.61%, the EuroStoxx 50 of the euro zone 1.01% and the Stoxx 600 0.53%.
Market sentiment in Europe is primarily affected by export values, particularly in the automobile sector (-1.1%), which could suffer from customs surcharges announced under the future administration of Donald Trump.
The American president-elect also appointed lawyer Jamieson Greer, who participated in the trade war between Washington and Beijing during his first term, to the post of Trade Representative on Tuesday evening. VALUES TO FOLLOW AT WALL STREET
Dell fell 11.5% in pre-market trading after announcing Tuesday evening that it expected fourth-quarter sales to be lower than Wall Street expectations.
HP Inc plunged 8.1% in pre-market trading after publishing Tuesday evening a profit lower than Wall Street’s expectations for its first fiscal quarter.
VALUES IN EUROPE French banks, BNP Paribas, Société Générale and Crédit Agricole fell from 2.29% to 4.02%, the risk premium required by investors to hold French debt having reached its highest level in 12 years , a sign of concern about the fate of the government and the 2025 budget.
Teleperformance fell 3.82%, the group having announced the acquisition of ZP Better Together for $490 million. RBC notes that some investors might question the choice of a potentially risky acquisition over stock buybacks.
EasyJet advances by more than 1% after announcing that it anticipates a 3% increase in its capacity during the 2024-2025 fiscal year.
Anglo American rose 2.12% after announcing the sale of new shares in its South African platinum subsidiary, the group accelerating its split plans.
Grifols plunges 11.59% after information according to which the Canadian investment fund Brookfield plans to abandon its plan to buy the Spanish pharmaceutical group.
RATE
The yield spread between French and German ten-year bonds rose to 90 basis points (bps) on Tuesday, the highest level in more than 12 years, before falling to around 85 bps. The National Rally (RN) has promised to censure Michel Barnier’s government if the Prime Minister’s finance bill (PLF) for 2025 reduces the purchasing power of the French.
“Investors remain concerned about political developments in France, particularly due to the government’s difficulties in approving next year’s budget,” UniCredit analysts underlined in a note on Wednesday.
“The situation remains unstable and a further widening of the OAT-Bund spread cannot be ruled out,” they added.
The ten-year German Bund yield stood at 2.154%, down 4.5 basis points, following the trend on US bonds, with the ten-year Treasuries yield losing 3.3 bps to 4.2692. %.
EXCHANGES The US dollar fell to its lowest level in a week against a basket of six benchmark currencies on Wednesday, as investors became more cautious about President-elect Donald Trump’s promises, while rebalancing their portfolios ahead of from the end of the month.
Some analysts believe that the inflation risks linked to Donald Trump’s promises should prevent him from implementing certain measures.
“We think Trump realizes that his victory is almost entirely down to the 3i’s – inflation, inequality and immigration – with price (control) being the key,” said Viktor Shvets, a strategist at Macquarie Capital.
The dollar index lost 0.29%, to 106.53 points, after falling to 106.33, to a low since November 20. However, it has gained around 30% since November 6, the day after the American presidential election.
The euro advanced by 0.26%, to $1.0514, and the pound sterling by 0.25%, to $1.2602.
OIL
Oil prices are rising again after falling on Tuesday following the ceasefire agreement between Israel and Hezbollah. Investors are now turning to the OPEC+ meeting scheduled for Sunday.
Brent rose 0.49% to $73.11 per barrel and American light crude (West Texas Intermediate, WTI) rose 0.45% to $69.07.
(Written by Claude Chendjou, edited by Blandine Hénault)
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